Property owners living in wake of Foxconn told home could be condemned

0
1426
Village threatens to condemn home

Families living in the path of a proposed $10 billion Foxconn Technology Group facility have been approached by the Village of Mount Pleasant to acquire their property, and more than one family has found the process confusing and frustrating.

Not only do they say they’re being see-sawed by government officials, but the Village may be incorrectly using a state law to force them to sell their homes.

Kim and Jim Mahoney moved into their newly built home at 10640 S. Prairie View Drive in February. In October, village officials told reporters that eminent domain would only be used as a last resort to clear properties needed for the factory. But, just days later, the Mahoneys learned that their house would be acquired by the village through eminent domain for a road to be built for Foxconn. A few weeks after that, they were told it could instead be condemned and taken through the state’s Blight Elimination and Clearance Act,  the state’s tax increment law.

“It’s as if they don’t care,” Kim said. “I guess that’s what’s been the most frustrating. They keep saying that they are going to treat us fairly. They told the media on October 4 that they were going to use eminent domain as a last resort. And the very first notice that we ever received from the Village of Mount Pleasant said they were going to take our home under eminent domain. It doesn’t seem like a last resort.”

Property owners told their home could be condemnedWith that said, Kim and Jim would consider moving, but the eminent domain law restricts the sale to fair market value. Their 1,700 square-foot home sits on a little over an acre of land.  She expects the home to be valued at $350,000 next year. But because they hadn’t finished the home by Jan. 1, it is currently assessed at $155,000.  Kim doesn’t believe she can build a similar-sized house on a one-acre parcel of land for that price.

Why the land is needed

Taiwan-based Foxconn Technology Group announced October 4 that it planned to start building a 20-million-square-foot manufacturing campus between Highway H and the East Frontage Road, and Highway KR and Braun Road as the first part of a three-phase project.

The Mahoney’s property would be located within the footprint of where Foxconn wants to build an LCD manufacturing facility. Expected to generate 10,000 construction jobs and 3,000 permanent positions, the $10 billion project is the largest economic investment in the state and one of the largest in U.S. history. Over 200 parcels of land are being included in the project.

Christy Hall, a lawyer and one of Mahoney’s neighbors, is also named as one of the property owners affected in the relocation order filed by the village through eminent domain. During a Mount Pleasant Village Board meeting, Hall said the property owners were “blindsided” by the eminent domain letters.

“The tentative site plan for this factory … It is not included in this agreement and is an incomplete contract,” Hall said at the Nov. 20 meeting. “The language in this contract is very different than what the members have been verbally told. Furthermore, the language that is in this contract is to forcibly remove us from our homes by Aug. 1.”

Hall has lived in her home since 2010.

Read the Mt Pleasant TID No. 5_Project Plan_2017-10-3.

Mahoney family confused by process

The Mahoneys received a letter on Oct. 9 from Claude Lois, project director for the village, stating that their home was being taken for a roads project under the state’s eminent domain law.

The law allows federal, state, and local governments to take or force the sale of private property for public use. This includes roads projects. But under the Takings Clause of the Fifth Amendment to the U.S. Constitution, governments have to pay property owners “just compensation.”

Foxconn site plan

Kim raised questions about the village’s authority to take her property through eminent domain for a road project because it didn’t encroach on her property. Prairie View Drive is a loop that extends off of Highway H. The plan calls for widening and repaving a portion of the loop that goes from east to west, but it would essentially cut off access to the rest of the property owners.

“They can’t lock us out and not provide us with road access,” Kim said. “When they realized that, they knew they couldn’t take our property through eminent domain, that’s when they said they could condemn our home.”

An email dated Oct. 19 from Jim Machnik — who is handling the land acquisition for the Foxconn portion of the project — indicated that their property could be taken through the blight elimination and slum clearance act, not a roads project. But Machnik wrote that those acquisitions acquired through the Blight Elimination Act could still fall under the road project.

“At your election, the village would acquire your property under the road project, if that was your wish. Said road projects will come online before the development acquisitions by way of the noted statute 66.1333 [the blight law],” he said.

At one point the Mahoney property was included on the plat map trustees approved for its relocation order on Nov. 20, but the property is not included on the plat map filed with Racine County on Nov. 21.

Still, Machnik said in another email dated eight days later: “I can not state your property will not be acquired, nor can I state the condemnation process will not be in play.”

Lois and Machnik were contacted to clarify the discrepancies, but neither replied by the deadline to file this story.

How can a new home be considered blighted?

The term “blight” is not used within the tax increment finance (TIF) district document passed by the Mount Pleasant Village Board in November, but it does refer to the statute.

Under the state’s Blight Elimination and Clearance Act, properties can be purchased for redevelopment or urban renewal projects for fair market value. Although the law defines blight as run-down or unsafe property, there is some wiggle room for properties to be condemned for redevelopment and urban renewal projects for private corporations, said Ed Fallone, an associate professor with the Marquette University Law School.

“The U.S. Supreme Court decided that the word ‘blight’ is a term of art and that legislatures can define the word any way they want without turning the taking into a violation of the U.S. Constitution. That was in the 2005 case of Kelo v. The City of New London. So as a matter of the U.S. Constitution, it appears that the (Mount Pleasant) government can do this,” Fallone said.

But Wisconsin State statutes — which were amended following the Kelo decision — also prohibit single-family homes that are occupied and not in a high-crime rate area from being designated as blighted.

“Wisconsin modified its law to provide that unblighted property cannot be taken by eminent domain (Wis. Stat. section 32.03(6)(a)&(b)), and an argument can be made that it defeats the purpose of this amendment if Racine defines ‘blight’ so broadly,” Fallone said.

At the time the Kelo decision was made, House Speaker Paul Ryan (R-Janesville) co-sponsored the Private Property Rights Protection Act of 2005. He called the Kelo decision a “terrible mistake” that undermined private property rights.

“When someone works years to secure a home or establish a successful family store or restaurant, only to be forced by the government to give it up so a corporation can redevelop the land, that’s wrong,” Ryan said.

Ryan has been a staunch supporter of the Foxconn project because of the economic benefit it is expected to have in the region.

“This is an absolute game-changer,” he said as the project was being proposed. “It means more good-paying jobs and opportunities for hard-working Wisconsinites. And it shows the rest of the country — and the world — that our area truly is a manufacturing powerhouse.”

Racine County Eye reached out to Ryan’s office, but we were referred to Gov. Scott Walker and the State Legislature. Efforts made to contact State Assembly Speaker Robin Vos (R-Janesville), Walker’s office and Sen. Van Wanggaard (R-Racine) were not returned.

Mahoneys still want to sell

Despite the confusion and politics, Kim and John Mahoney said they are not opposed to selling their property. They just want to be treated fairly and negotiate with the village in good faith.

“Most, if not all of my neighbors, are not trying to prevent the Foxconn project from going forward nor are they trying to prevent the legal acquisition of our properties. We simply want to be treated fairly and according to the laws of the State of Wisconsin,” Kim said.

Once the village acquires all 200-plus parcels, those that settled through either eminent domain or the Blight and Slum Clearance Act will still need to have their relocation packages approved by the Department of Administration.

Meanwhile, the Mahoney family plans to hire an appraiser, start looking for a new plot of land in a new area, and start the building process all over again like they did almost two and a half years ago.

“When they finished the contract, and they were thanking all of these individuals who helped make this project possible and I said to (Racine County Executive) Jonathan Delagrave, ‘You forgot to thank all of the homeowners who are giving up the most,’” Kim said.

Colette Broadway, First Weber Real Estate ~ Call 262-939-2198 if you are buying, selling, or looking for a commercial location in SE Wisconsin!