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Sunday, July 22, 2007

Sports Arena Hat Trick Penalizes Property Owner

The Detroit government low balled a local landowner for the sale of her property that it deceitfully said would be developed into a parking lot. As it turns out, the land was wanted for a hockey arena - a far more valuable project than a parking lot. The government also acquired the land on behalf of a private businessman, and it then tried to transfer the land to that businessman's firm to build the arena.

Sports Arena Hat Trick Penalizes Property Owner

Detroit property owner Freda Alibri received an offer she couldn't refuse. The Detroit/Wayne County Stadium Authority, a public entity, approached her in 1997 wanting to purchase land she owned. The stadium authority wanted the land for two new sports stadiums and parking lots.

Alibri gladly sold the government the property, but later discovered that some of the parking lot land, which she sold to them at a parking lot price, was instead intended to be the site of a third sports venue that made the land worth a whole lot more. Furthermore, the third venue wasn't even a public project presided over by the Stadium Authority, but rather a private venture. When Alibri protested, she was told to be happy with what she got, but she considers the transaction to be an abuse of the government's power of eminent domain.

The taxpayer-funded Stadium Authority was reportedly acquiring land so new stadiums could be built for both the Detroit Tigers baseball team and the Detroit Lions football team. In addition to property Alibri owned directly on the site of the planned stadiums, she also owned a one-acre parking lot located several blocks away. While the Stadium Authority bought the property she owned directly where the stadiums were to be built for more than $6 million, they also said they needed her parking lot, ostensibly for stadium parking. Alibri sold the lot to the Stadium Authority for $268,498.

It was later discovered that the money the Stadium Authority used to buy Alibri's parking lot was "borrowed" from Mike Ilitch, the owner of the Detroit Tigers and the Detroit Red Wings hockey team. Ilitch owned several properties close to Alibri's parking lot. He was considering building a new hockey arena on the site of the property the Stadium Authority bought from Alibri with his "loan." In 1998, the Stadium Authority tried to repay the loan by transferring Alibri's former property to an Ilitch firm. Alibri cried foul, arguing that she was deceived by the Stadium Authority so Ilitch could cheaply acquire land for his new hockey arena. She estimated her parcel would sell for almost $2 million as land for a prospective arena as opposed to $268,498 for stadium parking.

Fred Steinhardt, a condemnation lawyer with clients in the same area, told the Detroit News, "Sweetheart doesn't adequately describe what's going on. They're condemning parking lots so Mr. Ilitch can have parking lots? What's that all about?" If Ilitch's private firm could acquire the land at 1997 prices through the public Stadium Authority, then he would avoid having to buy the property for his hockey arena from individual owners at higher prices in the future. Alibri went to court and got an injunction to stop the deal. She then sued to have her property returned. After a favorable trial court ruling was overturned on appeal, the case was brought before the Michigan Supreme Court. In July 2004, the Court sided with Alibri and returned her land.

Sources: Detroit News (August 14, 2000), Metro Times (April 23, 1997), Alibri v. Detroit/WayneCounty Stadium Authority (Michigan Supreme Court, Lansing, Michigan)

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Posted by Amy Ridenour at 11:11 AM

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