Madison Realty Company v. City of Detroit

• Decision Date: 09 July 1970
• Docket Number: Civ. A. No. 25682.
• Citation: 315 F. Supp. 367
• Parties: MADISON REALTY COMPANY, a Michigan Corporation, Plaintiff, v. The CITY OF DETROIT, a Municipal Corporation of the State of Michigan, Defendant.
• Court: U.S. District Court — Western District of Michigan

315 F. Supp. 367

MADISON REALTY COMPANY, a Michigan Corporation, Plaintiff, v. The CITY OF DETROIT, a Municipal Corporation of the State of Michigan, Defendant.

Civ. A. No. 25682.

United States District Court, E. D. Michigan, S. D.

July 9, 1970.

Gellert A. Seel, Detroit, Mich., for plaintiff.

Solomon Bienenfeld, Detroit, Mich., for Board of Governors of Wayne State University.

Robert Reese, Detroit, Mich., for City of Detroit.

KEITH, District Judge.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Plaintiff, Madison Realty Company, a Michigan Corporation, brings this action against the City of Detroit under Title 28 U.S.C. § 1331 and pursuant to the Constitution of the United States, Article XIV, § 1, claiming that the activities of defendant City in initiating certain condemnation proceedings as early as 1952 and in advancing said proceedings until the time of acquisition of plaintiff's property in 1965 resulted in a "taking" by Defendant City of plaintiff's property without due process of law.

As it relates to the history of plaintiff's property, it is either stipulated or undisputed by the parties:

That on July 15, 1947, plaintiff acquired a four-story apartment building then consisting of 47 units located at 5427-47 Fourth Street in the City of Detroit;

That, in 1951 and 1952 the number of rental units in the subject property was increased to 53 units;

That, sometime early in the 1950's Wayne State University inaugurated a vast expansion program and set about drafting and proposing various expansion plans;

That, beginning November 2, 1952 and thereafter various articles and diagrams appeared in published news media indicating the area to be acquired for said expansion program;

That, said publications made it readily apparent that plaintiff's property was included in the expansion area and was subject to acquisition;

That, on August 13, 1956, upon petition of Wayne State University, the Common Council for the City of Detroit passed a resolution authorizing and directing the Department of Buildings and Safety for the City to defer the issuance of any building permit for improvement in the Wayne State University Campus Extension area, and to notify the Secretary of the Board of Governors of Wayne State University of the filing of such application for improvement;

That, in 1957, plaintiff met with certain representatives of the Housing Commission for the City of Detroit who officially alerted plaintiff that they had been informed that Wayne State University would take the property in question within a short period of time;

That, beginning April, 1957 and continuing thereafter, property surrounding plaintiff's property was acquired, buildings razed, and the land converted into parking facilities for Wayne State University;

That, on December 23, 1960, the Housing Commission for the City of Detroit requested authority from Common Council to submit a General Neighborhood Renewal Application to the Federal Government;

That, on January 17, 1961, the Housing Commission for the City of Detroit requested authority from Common Council to submit to the Federal Government an Application for Survey and Planning Funds for "University City, Project No. 1";

That, on February 21, 1962, the Survey and Planning Application as submitted by the Housing Commission for the City of Detroit was approved by the Federal Government;

That, on March 30, 1962, a contract was entered into between the Federal Government and the City of Detroit;

That, on June 25, 1963, after a public hearing, a development plan for "University City, Project No. 1" was adopted by the Common Council;

That, until the adoption of that plan, the City of Detroit, through its Housing Commission, had taken no action toward the acquisition of any property within the "University-City" area;

That, in February, 1964, the City of Detroit entered into a loan and grant contract with the Federal Government to finance the acquisition of said property within the "University-City" area;

That, on or about July 27, 1964, the City of Detroit initiated eminent domain proceedings for the acquisition of the subject property;

That, said property was acquired by the City prior to any trial for the sum of Sixty-Six Thousand ($66,000.00) Dollars.

As to the appraisal and tax assessment of plaintiff's property, it is either stipulated or undisputed by the parties:

That, between the years 1954 to 1960, the defendant City maintained an assessed valuation on the subject property in the amount of One Hundred Eight Thousand Fifty ($108,050.00) Dollars, between the years 1961 through 1963, an assessed valuation of One Hundred Three Thousand, Seven Hundred Thirty ($103,730.00) Dollars, and in 1964 an assessed valuation of Ninety-Eight Thousand One Hundred Forty ($98,140.00) Dollars;

That, between the years 1962 through 1965, plaintiff paid an average of over Five Thousand ($5,000.00) Dollars per year in real and personal property taxes on the subject property;

That, a request by plaintiff dated February 22, 1962 for a reduction in the tax assessment of the subject property was denied;

That, on or about June 1, 1962, a real estate appraiser was hired by the City of Detroit to appraise the subject property for purposes of acquisition by said City, and, on or about July 9, 1962 said appraiser returned an opinion of value of the subject property in the amount of Seventy-Nine Thousand Five Hundred ($79,500.00) Dollars;

That, on or about February 1, 1964, a second real estate appraiser was retained by the City of Detroit to appraise the subject property, and, on or about March 3, 1964, said appraiser returned an opinion of value of the subject property in the amount of Forty-Nine Thousand ($49,000.00) Dollars.

This Court finds, from the uncontroverted testimony introduced by plaintiff, that plaintiff's property was originally located in a primarily residential area within short distances from commercial shopping, restaurants, gas stations, and local business establishments. The subject property was easily accessible by way of two freeways. Beginning April, 1957, the property surrounding plaintiff's building, especially the commercial establishments such as stores and shops, etc., were systematically demolished in accord with the expansion plans of Wayne State University. As demolition proceeded, the area lost its residential characteristics, and people began moving away from plaintiff's building; such exodus was augmented by information and circulars made available through official sources to the remaining residents informing that the area was subject to eventual condemnation. Plaintiff, himself, was repeatedly informed that his property was shortly to be acquired. Beginning 1957, there was general deterioration of the entire area and in particular of the subject property; access to plaintiff's building was impeded by the blocking of streets thereby requiring awkward maneuvering and circuitous routes to be taken in reaching said property. The property became the object for vandals, and despite repeated requests to the Police Department for additional protection, no safeguards were forthcoming. The president of plaintiff's corporation, Samuel Barak, was, on one occasion, robbed and physically assaulted on the subject premises. Money for improvements became completely unavailable to plaintiffs. As a result of the foregoing, by June, 1962, plaintiff's property had become a complete financial loss. Upon institution of the condemnation proceedings in 1965, plaintiff was provided an offer by Defendant City of Sixty-Six Thousand ($66,000.00) Dollars for the property, and it was implied that if such was not accepted the City would discontinue its acquisition of said property allowing plaintiff to retain ownership of a then deteriorated item.

In addition to this the Court finds from uncontroverted and undisputed testimony of plaintiff's highly qualified real estate expert,^* who upon occasion is employed by the City of Detroit for appraisal purposes, that the value of the subject property in 1962 was One Hundred Six Thousand ($106,000.00) Dollars. This expert explained the varying methods employed by him in arriving at a fair evaluation of the...