The Michigan Court of Appeals recently dismissed a case between the city of Mount Pleasant, Michigan Attorney General Dana Nessel and Michelle Lange, the director for the Michigan Department of Technology, Management & Budget. The case revolved around a public use restriction placed on the city’s largest undeveloped area that dates back to a years-long legal dispute beginning in 2019.
Currently the property is a vacant field that's closed off to the public. This wasn’t the city’s intention when they purchased the land from the state in 2011 for $1.
Mount Pleasant City Manager Aaron Desentz said the had hoped to develop this area with residential facilities and commercial buildings to bring jobs to the community, build more taxable revenue for the city’s budget and expand the city.
“The purchase of this property was a method of trying to extend the boundaries past where the city's initial limits had previously existed,” Desentz said. “This was proposed to be a mixed or commercial use along Pickard Street with the back portions of the property being residential use.”
One of the agreements attached to the deed was that the land had to be used for public purpose or it could trigger a reverter clause, which allows the state to repossess the land if it used outside the scope of public purpose.
According to court documents, the state said “business or otherwise private purposes” doesn’t constitute as public purpose. However, the city won a 2007 Michigan Supreme Court case, arguing that economic development can be considered land for public purpose.
“This is what the language was in the initial act in 2010 that the state had passed in order to sell the property to the city,” Desentz explained.
In 2019, the city contacted the DTMB, offering alternative options to remove this reverter clause.
The DTMB limited the city to either purchasing the property for its fair market value of $1.8 million, which was evaluated in 2009, or draft new legislation for the deed. After spending $5.6 million to demolish and remove a previously state-owned psychiatric facility from the grounds, the city argued that they had already exceeded the market value.
The DTMB said in court documents the matter was “closed” unless new legislation was drafted.
In 2023, the city filed a complaint against Nessel and Lange, asking for reformation of the deed and a declaratory judgment from the courts on whether public purpose includes economic development.
The Court of Claims sided with the city stating that the proposed economic development fell within the public purpose requirements that the deed was agreed upon in 2010. However, the case was dismissed by the court of appeals after the city didn’t meet the time restriction to properly file a claim against the state.
Desentz said city commissioners have discussed this issue in closed session and hope to return to the matter in 2025.
The attorney general’s office and DTMB could not be reached for comment.
