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Home / Commercial Construction / Lawyer warns Foxconn blight designation could lead to lawsuit (UPDATE)

Lawyer warns Foxconn blight designation could lead to lawsuit (UPDATE)

Mount Pleasant officials slapped a blighted designation Monday on thousands of acres of land near the site of Foxconn Technology Group’s new $10 billion factory, a step that could allow the village to use eminent domain to obtain property from holdout landowners.

The village of Mount Pleasant Board voted 6-1 on Monday to designate some 2,800 acres of land in the village blighted. Local officials say the decision could save the village millions of dollars.

“Tonight’s approval of the redevelopment plan is one more sign of progress toward Foxconn’s $10 billion, 22 million-square-foot advanced manufacturing campus,” David DeGroot, president of the village of Mount Pleasant, said in a statement.

He added that deeming the properties blighted could allow the village’s development authority to issue double tax-exempt bonds. Those sorts of bonds are not subject to state and federal taxes and would save the village millions of dollars, according to a news release.

But the board’s vote didn’t sit well with many residents. Some expressed fears the village could use eminent domain to acquire land from anyone who refuses to sell. Matthew Fleming, an attorney at Madison-based firm Murphy Desmond, warned the decision might even lead to further legal battles.

A group of Mount Pleasant property owners sued the village in January in federal court, arguing the village had made use of eminent domain for private, rather than public, benefit when it acquired 18 acres from landowners to clear the way for Foxconn’s plant. Property owners also said the village’s offering price for land — at 140 percent of the market value — was too low.

Judge Lynn Adelman dismissed the suit in May, calling it “not cognizable.” The group appealed the ruling on May 29.

The designation of “blight,” when used, is typically placed on properties that are dilapidated, underused or unsafe, Fleming said. Mount Pleasant officials, however, chose to lean on another phrase in state law, one that allows properties to be deemed blighted if they are largely open or “substantially” impair the “sound growth of the community.”

The Wisconsin Legislature passed a law tightening the state’s blight requirements one year after the U.S. Supreme Court handed down a landmark decision in 2005 in the case Kelo vs. New London. The court then found that governments were within their rights to use eminent domain as part of a plan that would cause private property to be transferred from one private owner to another.

Dan Biersdorf, founder and president of Minneapolis-based Biersdorf & Associates, a firm that specializes in eminent-domain law, said Wisconsin’s “loosey goosey” blight law puts few restrictions on local governments and has discouraged courts from scrutinizing decisions. States like Minnesota have stricter standards that prohibit agencies from declaring land blighted without first meeting a long set of criteria.

“How can farmland be blighted? Does that mean all of our land in the whole state of Wisconsin is blighted?” Biersdorf said. “When you try to make sense of it, you realize there is no sense to be made. “It’s a vehicle of using the process to abuse the process. Maybe the legislature will wake up and do something about it.”

Even though blight designations have been applied broadly since then, they are still mostly used to clean up city neighborhoods, not rural farmland, Fleming said. Both Biersdorf and Fleming said they could not recall an instance in which a government placed a blighted designation on an area as big as the Foxconn site.

With a project so large, the village of Mount Pleasant could well end up testing the limits of Wisconsin’s blight laws, Fleming said.

“I certainly think this would be a good test to see if this much discretion is allowed,” he said. “If this doesn’t create some law, I don’t know what larger more stark example of this you’re going to find in the state.”

Mount Pleasant officials meanwhile said they have so far acquired about 100 properties for the Foxconn project. That’s about 80 percent of the land the village needs. Officials said Monday’s decision concerning the blight designation won’t change their land-acquisition plans. Further approvals will be needed if property is to be obtained using eminent domain.

“The approved redevelopment plan will not change the village’s approach to property acquisition,” said Alan Marcuvitz, an attorney for the Village of Mount Pleasant who could not be reached for comment on Tuesday.  “As it has done since the beginning of this process, the Village will continue its efforts to acquire all property needed for the Foxconn development through voluntary agreements with property owners.”

About Nate Beck, [email protected]

Nate Beck is The Daily Reporter's construction staff writer. He can be reached at (414) 225-1814 (office) or 414-388-5635 (mobile).

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