The 25-acre redevelopment project, which is bounded by East Grand River Avenue, Stoddard Avenue, Bogue Street and the Red Cedar River, calls for the acquisition of Cedar Village apartments and other student housing units and businesses to allow for construction of more retail, restaurants, entertainment venues and housing units.

But with no properties acquired and time ticking to complete the project, property owners are concerned the city might be attempting to use a recent environmental assessment as a way to acquire the lands through eminent domain.

Eminent domain is a tool cities use to take private property if it’s deemed necessary for a public use.

Concern among residents stems from the city’s 2004 declaration that the area of land is blighted, which some property owners see as a way for the city to potentially seize their land.

“We have vigorously opposed the process from the start, that the entire area is blighted,” said Joe Maguire, president of Wolverine Development Corporation, which owns the McDonald’s restaurant at 1024 E. Grand River Ave. “We continue to hold that it is a veiled effort to use eminent domain.”

Additional concern was raised late last year when the city began assessing the history of the area for any suspicion of environmental contamination, which is the first phase in declaring a site as a brownfield, said Tim Dempsey, a community and economic development administrator for East Lansing.

The next phase would be testing on the site to declare it as an environmentally contaminated area.

A brownfield designation could call for an environmental cleanup of the area and make it possible for the city to use eminent domain.

Eminent domain use and abuse

Amid the renewed debate over East Village, property rights activist Susette Kelo came to campus last month to address students about property rights and government attempts to restrict those rights.

“Students hold the key to the future of this city … but I think they need to be aware of eminent domain abuse,” Kelo said.

Kelo lost a 2005 Supreme Court battle to prevent the city of New London, Conn., from using eminent domain to seize her house for development, but her case led several states to adopt measures that prevent similar seizures.

Michigan law prohibits municipalities from taking privately owned property to give to another private owner, but eminent domain is legal when the area of land is public land, East Lansing City Manager Ted Staton said.

“It is still clear that for a public property, eminent domain is legal, but it has been the city’s long-standing policy not to use it,” Staton said.

The city has used eminent domain only a handful of times, but property owners agreed to most cases because they received tax benefits from the deal, Staton said.

The city received a grant from the Environmental Protection Agency in 2006 and has designated 11 areas throughout East Lansing as brownfield sites, Dempsey said.

Staton said the city’s other brownfield sites have never been threatened by eminent domain, and he doesn’t expect the East Village area to be any different.

Red Cedar runoff

City officials said the East Village site is a source of contaminated Red Cedar runoff, and the timing of the brownfield consideration coincides both with the timing of the EPA grant and negotiations for the redevelopment.

Dempsey said the developer has been in negotiations with property owners and if owners agree to give up their land, the site assessment could come in handy. But at this point, Pierce has not acquired any properties on the site.

Theresa Nakata, vice president of marketing for the company, said it was premature to speculate about what would happen if the company does not complete land acquisition within the 30-month time frame, but the company will continue to evaluate whether to proceed as planned or make changes.

“We’ve reached out with every property owner and are working on that,” Nakata said.

Nakata said the project will create at least as much student housing as is already available and will create close to 2,000 retail jobs, most of which would be filled by students.

Property owners, however, said they’re not interested in selling their land.

“We’re not engaging in negotiations at all because our land is not for sale,” said Nancy Kurdziel, president of Prime Housing Group, a company that owns student housing units on the proposed East Village site.

Kurdziel said Prime Housing Group plans to redevelop on its own when the time is right.

Colin Cronin, area director of student properties for DTN Management Co., which owns Cedar Village apartments, said his company also is not interested in selling.

“At this point, we’re not really entertaining any options to sell,” Cronin said. “We love the area and we love student housing.”