Proposal 4's passing eases some property owners' fears

| The State News Vakis Nicolaou, owner of Georgio's Gourmet Pizzeria II, jokes with customers on Tuesday as he serves pizza at his restaurant, 1010 E. Grand River Ave. The recently passed proposal to limit uses of eminent domain gives small-business owners like Nicolaou additional security.

The reason for their proverbial happy dance is Proposal 4, which was overwhelmingly passed by Michigan voters on Nov. 7 and further restricts the government's power to take private property.

"It restores the natural order of what our nation's founders intended," said Joe Maguire, president of Wolverine Development Corp., which owns the McDonald's restaurant at 1024 E. Grand River Ave. in the East Village. "This protects our interests."

Now the city of East Lansing, which is planning a massive overhaul of the area that houses Cedar Village apartments, can't take private property for certain aspects of the project. City officials aim to convert the 35-acre area into a haven for businesses, students and permanent residents, though it will likely take several years.

Property owners who resist the changes in East Village will either convert the project's specifications over time — because of changes in the zoning code — or face having new buildings constructed around their holdings.

Proposal 4 specifically prohibits the government from taking private property and turning it over to another private entity. It also requires the government to demonstrate a greater need for taking a property and preserves the rights of existing property owners.

East Lansing City Manager Ted Staton said Proposal 4 doesn't impact the East Village project because the city never planned on forcefully taking properties, adding that worries about the use of eminent domain are irrational. The land is bounded by Grand River Avenue, the Red Cedar River, Hagadorn Road and Bogue Street.

"It's going to make it more difficult for the rehabilitation of deteriorated neighborhoods around the state," Staton said. "It's going to make eminent domain for the purpose of eliminating blight more difficult."

But during a July 26 planning commission meeting, Bob Owen, East Lansing's planning and zoning administrator, contradicted Staton and said eminent domain could be used when redeveloping the East Village if a single-property owner refused to sell.

"I don't think that was ever the case," said Lori Mullins, the senior project manager heading the project. "We hadn't ever intended to use the blighted designation as a way of acquiring properties in the East Village."

East Village property owners have remained worried since December 2004, when the City Council blighted the East Village, making it easier for the city to acquire properties. Demolishing condemned buildings is one thing a municipality can use to justify eminent domain.

And although it makes it easier for the city to take properties in the area, East Lansing officials have repeatedly said using eminent domain isn't an option.

If the project does come to fruition and city officials can work with property owners, it will be an improvement to the area, said Vakis Nicolaou, the owner of Georgio's Gourmet Pizzeria II, 1010 E. Grand River Ave. But taking anyone's property to complete the project would be a completely unacceptable practice, and Proposal 4 is an added protection against that, he said.

"The government should not force property owners out," Nicolaou said.

The East Village could one day be comprised of high-rise buildings with businesses on the lower levels and renters or owner occupants on the top.

With the East Village, there is a lot of leeway for things to turn out badly for the property owners involved, said Nancy Kurdziel, the owner of Prime Housing Group, which has seven buildings in the village.

"I don't think eminent domain should be used as a possibility," she said. "We don't know if it is specifically going to help us. People are making a lot of decisions about our properties without our involvement."

Proposal 4 hasn't been tested in the court system, so it's unclear how far it reaches, Kurdziel said. Only after Dec. 22, when Proposal 4 becomes a law, will Michiganians know what is protected and what is not, she added.

"A lot of it boils down to case law," Kurdziel said. "It's based on interpretation."

Predicting how Proposal 4 will change economic development in Michigan is nearly impossible and can't be determined until more time has passed, said John Avery, executive director of the Michigan Economic Developers Association.

Historically, the practice of taking private property for private development hasn't been a problem in the state, Avery said.

With the city's ability to use eminent domain legally bound by Proposal 4, area property owners are resting a little easier, knowing they are protected from improper economic development, Maguire said.

"The East Village is 35 acres and consists entirely of private-property owners," he said. "We are very grateful for Proposal 4's passage."

Kris Turner can be reached at turne112@msu.edu.