America’s economic footprint as a manufacturing and industrial engine dates back to our formative days as a nation. Industrial properties are as likely to fall prey to condemnation as residential and commercial properties, especially in cities experiencing an urban renaissance, where aging industrial plants might not be consistent with the modern vision of a city. When a government desires a property for “public use”, it does not concern itself with what it is acquiring, but takes what is needed in the eyes of the government. Airports, roadways, stadiums, public buildings, utilities and water navigation are critical to the fabric of Public Use.
National Block and Ready Mix: This leader in the concrete block market was built over a span of 25 years with its office building near the front of the property and parking in front of the building. When a road commission acquired land in front of the property, the acquisition substantially modified access to the entrance of the company and limited movement. The road commission simply deemed the property as a taking on a per-square foot basis of industrial land. National Block and Ready Mix claimed the acquisition interfered with parking and access into the property, with an offer of less than $30,000. A jury awarded $147,000.00 in Just Compensation.
Poletown, Mistele Oil: In one of the most significant Poletown acquisitions which reshaped the footprint of Metro Detroit, an oil and coal company received an offer of $355,000 for its 70-year-old facility. The City of Detroit wanted to pay for nothing more than the value of the building but the owner properly explained to a jury that fair market value was relevant because the business could not be moved. A jury entered a judgment in the amount of $5,100,000, and the case was subsequently settled for the amount plus interest.
Mistele Oil was one of 33 eminent domain cases to arise out of Poletown which were defended by Ackerman & Ackerman. The City of Detroit acquired parcels in Poletown as part of a highly controversial and legally-debated land grab in order to pave the way for the construction of a GM Cadillac Plant.
Drive All: Drive All Manufacturing company maintained two locations 70 miles apart. Their Detroit location did the less intensive work, while the second location in Harbor Beach, Michigan prepared final manufacturing product. The Company produced heavy-duty industrial transmissions. The City of Detroit acquired the Detroit portion of the manufacturing operation as a part of the Chrysler Plant eminent domain proceeding.
The owner appropriately proved that the acquisition destroyed the potential to maintain much of the inventory where required and severely affected the totality of the operation.
An offer was made for approximately $450,000 was originally made for the plant. Settlement was reached for $7.6 million after more than three years of government municipalities fighting the filing of the condemnation complaint.