This Week in Michigan Real Estate History
A weekly series highlighting a significant event in Michigan history that impacted real estate.
The Impact of the “Poletown” Plant on Michigan Law
The “Poletown” Groundbreaking
On May 1, 1981, General Motors broke ground for a new assembly plant in Hamtramck and Detroit, Michigan. Because of the new plant’s footprint, the City of Detroit filed condemnation actions. The City condemned 1,400 homes (with 4,200 residents), 140 businesses, and several churches. The takings were in an area of Hamtramck known as “Poletown” (so named for its Polish population).
The Poletown Decision
Numerous residents challenged the City’s condemnation litigation. Those challenges resulted in a ruling by the Michigan Supreme Court. Poletown Neighborhood Council v City of Detroit, 410 Mich 616, 304 NW2d 455 (1981). The Poletown ruling upheld the City’s eminent domain power. The Court upheld the City’s power to take private property for conveyance to a private business for economic development purposes. However, the parishioners of Immaculate Conception Roman Catholic Church staged a sit-in, resulting in the arrest of 12 in July 1981.
The Hathcock Decision
Twenty-three years later, the Michigan Supreme Court overturned the Poletown decision in County of Wayne v Hathcock, 471 Mich 445, 684 NW2d 765 (2004). The Michigan Supreme Court based its decision in Hathcock upon the Michigan Constitution. However, the United States Supreme Court in Kelo v City of New London 545 US 469 (2005), ruled that a similar taking of private property for economic development purposes was not prohibited by the United States Constitution.
A Constitutional Solution
In 2006, in response to Hathcock and Kelo, Michigan’s voters passed a constitutional amendment enshrining the prohibition on the use of eminent domain for economic development purposes in the Article X, Section 2 of the Michigan Constitution. Although it took 35 years, the full impact of the Poletown plant on Michigan real estate history had finally been realized.
David Nykanen has over 22 years experience as a real estate lawyer. He is the former Chair of the Real Property Law Section of the State Bar of Michigan. Dave has represented property owners of virtually every type, including retail, multi-family, industrial, office, hotel, and high-end residential.
