STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6212

March 29, 1984

DOWNTOWN DEVELOPMENT AUTHORITY:

Eligibility of remote undeveloped land attached to a downtown business district by means of a corridor composed of land zoned for residential purposes for redevelopment

An undeveloped parcel of land remote from a downtown business district but attached to it by means of a corridor composed of land zoned for residential purposes does not qualify for redevelopment under 1975 PA 197.

Honorable Harry A. DeMaso

State Senator

The Capitol

Lansing, Michigan

Referring to Pontiac Charter Township, and citing the downtown development authority act, 1975 PA 197; MCLA 125.1651 et seq; MSA 5.3010(1) et seq, ant the Commercial Redevelopment Act, 1978 PA 255; MCLA 207.651 et seq; MSA 7.800(51) et seq, you have requested my opinion upon the following question:

Your correspondence, and other information, reflect the following factual circumstances:

In June, 1980, a 'Central Business District Analysis For The Auburn Heights Strategy Area,' of Pontiac Charter Township, was performed and a report issued. Attached is a copy of a land use map prepared by the Department of Natural Resources under Michigan Resource Inventory Act, 1979 PA 204; MCLA 321.201 et seq; MSA 13.27(51) et seq, indicating the pattern of land uses within the township including Auburn Heights central business district analysis area covered by that report. Generally, the report discussed then existing conditions in the Auburn Heights central business district area, included a development plan for the commercial redevelopment of the area, and considered several methods of financing such redevelopment, including the downtown development act, supra, and the Commercial Redevelopment Act, supra.

On January 17, 1983, the Pontiac Charter Township Board considered the establishment of a downtown development authority and potential boundaries for a downtown development district, including the Auburn Heights central business district. It was contemplated that the said Authority would include a 208 acre unimproved parcel of land north of the M-59 freeway upon part of which a computer center complex would be developed by Comerica, Incorporated, a bank holding company. Comerica was the optionee of the parcel in issue referred to as Meadowbrook, which was at that time zoned residential, except for 32.7 acres which were zoned for business purposes. The Pontiac Charter Township Board adopted a resolution of intention to establish a downtown development authority, and described the area being considered as the downtown development district. Attached is a map from the 1983 Redevelopment Plan indicating the described boundaries.

Rezoning of the Meadowbrook parcel from residential to business and general business was approved by the township planning commission on January 20, 1983; the Oakland County Zoning Coordinating Committee recommended approval of rezoning on February 3, 1983; and the township board approved the rezoning by the adoption of Ordinance No. 326 on February 7, 1983. The ordinance was published and became effective on February 19, 1983.

On February 21, 1983, the township board held a public hearing and adopted Ordinance No. 325, establishing the Auburn Hills Downtown Development Authority and describing the boundaries of the downtown development district. A resolution was also adopted approving the appointment of the board of trustees of said Authority. Ordinance No. 325 was published and became effective on February 24, 1983.

A 'Redevelopment Plan for the Auburn Hills Downtown District and Redevelopment Area,' prepared by a professional community planner retained by Comerica, was submitted on March 10, 1983 to the Auburn Hills Downtown Development Authority. The Redevelopment Plan provides only for development of the Comerica computer complex, with no present redevelopment of the central business district area. The Redevelopment Plan includes a recommendation by the Authority for maximum tax abatement relief available for the Comerica development under the commercial redevelopment act. On March 16, 1983, the Auburn Hills Downtown Development Authority Board of Trustees passed a resolution adopting the Redevelopment Plan, and recommended that the township board adopt an ordinance approving the Redevelopment Plan. On March 21, 1983, the township board discused the adoption of the Redevelopment Plan, which was duly accomplished by the township board.

In the context of the foregoing, evaluation of the pertinent legislation is in order. The downtown development authority act, 1975 PA 197, supra, provides, in pertinent part:

The title and purpose clause of 1975 PA 197, supra, expressly recite the intention of the Act to correct and prevent deterioration in business districts, to promote the economic growth of business districts, and to increase property tax valuation in business districts. By express definition in 1975 PA 197, Sec. 1, supra, a downtown district must be within a business district, and a business district means an area zoned and used principally for business. ⁽¹⁾ The focus of 1975 PA 197, supra, for the accomplishment of its stated purposes, is upon a business district zoned and used as such. The grant of power delegated by the Legislature is limited by the scope of the title of the act, and its exercise must be within the object and purpose of the act. See, Maki v City of East Tawas, 385 Mich 151, 157; 188 NW2d 593 (1971), quoting Justice Cooley, Constitutional Limitations, 149:

The body of 1975 PA 197, supra, referring to a business district, is within the scope of the title, and neither the title nor the body of the statute may be enlarged or expanded beyond the limit expressly stated by the Legislature.

The Legislature has established the foregoing parameters for the application and implementation of 1975 PA 197, supra, and although wide discretion is conferred upon municipalities and downtown development authorities in the determination of boundaries for their downtown districts, the exercise of that discretion must be within the scope of the legislation. Compare, In Re Brewster Street Housing Site, 291 Mich 313, 340; 289 NW 493 (1939). See also, 40 Am Jur 2d, Housing Laws and Urban Development, Sec. 19, p. 1075. For a discussion of the 'outer limits' of the police power, see Gregory Marina, Inc v Detroit, 378 Mich 364, 393; 144 NW2d 503 (1966), quoting from Berman v Parker, 348 US 26, 32; 75 S Ct 98; 99 L Ed 27 (1954).

With regard to the boundaries of the Auburn Hills downtown development district established pursuant to 1975 PA 197, supra, the pertinent inquiry is whether the 208 acre Meadowbrook parcel is within the statutory definition, that is, within a 'business district, zoned and used principally for business.' The established central business district area, with properties zoned commercial and used principally for business, is described in the 1980 'Central Business District Area Analysis,' and is illustrated on the attached 1979 existing land use map. It is noted that at the time of the enactment of 1975 PA 197, supra, the land in question was neither zoned nor used for business. The Meadowbrook parcel is neither within the business district involved, nor is it adjacent to it, nor is it contiguous to it, but, rather, it is remote (one-half to one and one-half miles) from it, separated by the M-59 freeway, the Clinton River, and connected to the established central business district by means of a corridor composed of residentially zoned property. The Meadowbrook parcel is vacant, unimproved land which, at the time the downtown development district boundary was established, was not in use principally for business. It is noted that real property is not disqualified from development under 1975 PA 197, supra, merely because it is vacant and unimproved, but such vacant property must itself be situated within the confines of the business district.

At the time that the downtown development district boundary was tentatively established in the resolution of intention, 149 acres of the Meadowbrook parcel were not zoned for commercial or business use. While rezoning of the Meadowbrook parcel for business use occurred (February 19, 1983) before the establishment of the Auburn Hills Downtown Development Authority and the formal adoption of its boundaries (February 21, 1983) only 2 days separate the two events. The rezoning was not an independent transaction in recognition of an area already zoned and used principally for business, but, rather, was accomplished for the specific inclusion of the parcel within the redevelopment district boundary so as to qualify the Meadowbrook development for tax abatement under the Commercial Redevelopment Act, supra.

The area concept discussed in Berman v Parker, supra, ⁽²⁾ is not authority for the inclusion of the Meadowbrook parcel in the downtown development district's boundaries, because redevelopment of the Auburn Heights central business district area could readily proceed without the development of Meadowbrook. Meadowbrook not being adjacent or contiguous to structures or parcels within the central business district, would not be utilized or necessary in the construction, expansion, renovation, etc. of thhose properties in the central business district which may need redevelopment. Under the redevelopment plan, only Meadowbrook is to be developed; no redevelopment is presently contemplated for the central business district itself. It is the redevelopment of the central business district that is authorized by 1975 PA 197, supra, and it is with regard to that primary area that the area concept applies. The area concept would, of course, embrace the development or redevelopment of properties which are not substandard, when necessary to the accomplishment of the redevelopment of the downtown district area which may be substandard or blighted. On the other hand, the area concept does not contemplate the development of only a new structure on a parcel which is not within the downtown district involved, is not adjacent to it, nor contiguous to it, to the exclusion of the blighted or substandard downtown district. Compare also Cleveland v Detroit, 322 Mich 172; 33 NW2d 747 (1948); Shizas v Detroit, 333 Mich 44; 52 NW2d 589 (1952); and In Re Slum Clearance, 331 Mich 714; 50 NW2d 340 (1951).

As noted, 1975 PA 197, Sec. 1(c) and (h), supra, define the term 'business district' to mean an area in the downtown of a municipality zoned and used principally for business, and the term 'downtown district' to mean an area in a business district designated by ordinance of the governing body of the municipality. These definitions are particularly significant in light of the fact that the Legislature has empowered a downtown development authority with the approval of the municipal governing body to levy an ad valorem tax on real and tangible personal property not exempt by law as finally equalized in the downtown district of not more than 2 mills if the downtown district is a municipality having a population of less than one million people. 1975 PA 197, supra, Sec. 12. As originally enacted, the taxes collected are credited to the general fund of the authority for the purpose of financing only the operations of the authority. The Legislature amended 1975 PA 197, Sec. 12, supra, by means of 1983 PA 86, effective June 16, 1983, to remove this limitation so that the taxes collected are credited to the general fund of the authority for purposes of the authority.

There is nothing in 1975 PA 197, supra, to even suggest that it was the intent of the Legislature that real property which is zoned residential be included within a downtown development district in order to serve as a corridor to reach other property upon which certain business development may be desirable, and, thereby, subject the owners of the residential property to be taxed for the purposes of the authority.

Inasmuch as the Comerica parcel of land referred to as Meadowbrook is not within the requirements of 1975 PA 197, supra, it is my opinion, therefore, that your question, on the facts presented in this particular situation, should be answered in the negative.

Frank J. Kelley