Update On Land Acquisition for Townships' Airport

[Jack Gallagher]

Update On Land Acquisition for Townshipsâ?? Airport

To Peaine Residents and Property Owners:

Lawsuit Verdict and Potential Consequences:

Last Thursday, a Charlevoix County Circuit Court jury reached a verdict in the Townshipsâ?? lawsuit to acquire land for the Township Airport. After considering evidence presented at the trial, the jury upheld the Albinsâ?? claims that the Townships took 150 acres of their property next to the Airport in August 2003 with a value of $693,000. This value is $502,000 greater than the $191,000 paid to the Albins in June 2010 and creates a potentially significant liability for St. James and Peaine Townships. The Townships are also responsible for interest from August 2003.

Acquisition of this land, including various fees and costs, (legal fees, appraisal fees, court costs) was to be financed with 95% Federal/State funds. The original amount allocated by the State for this acquisition, including fees and costs, was $300,000. The Townships were to provide 5% of the cost. At the present time, the actual amount of fees and costs for this acquisition is not known but should be known in about a month.

Additional funding from Federal/State allocations is expected to be received by the Townships to assist in payment of the costs and fees incurred in this acquisition. It is possible, however, that the allocations received will not cover all acquisition costs. In this case, the Townships will be responsible to pay the difference. The amount of additional funding or when it might be received is not known at this time. A delay in obtaining this information is expected. Using additional allocations to pay for the land acquisition may well defer other planned Airport investments for some period of time.

Significant Information about the Lawsuit:

In June 2010, St. James and Peaine Townships filed a lawsuit in the Charlevoix County Circuit Court to acquire property owned by the Albins next to the Township Airport. This property was required as a result of expanding the length and width of the airport runway in 2001. Approximately 20 acres were required to satisfy the land requirements of Federal and State aviation authorities. The lawsuit was filed under the Townshipsâ?? right to acquire private property for public need and use.

The Townships asked that the 20 acres be transferred to them for use as a â??runway protection zoneâ?￾. Title to the property was transferred to the Townships shortly after filing the lawsuit and $191,000 was paid to the Albins. The amount paid was based upon a professional appraiserâ??s estimate of the value of the 20 acres.

Under the law governing the taking of private property by a governmental authority, the Albins had the right to challenge the Townshipsâ?? claims concerning 1) the value of the property taken, 2) the date on which it was taken and 3) the amount of the property taken. In this type of lawsuit, the jury, after considering the evidence submitted, provides the answer to each of these issues.

The Townships claimed 1) the property was taken in June 2010, shortly after filing the lawsuit, 2) only 20 acres were taken and 3) the value of the property taken was $191,000. The Albins claimed 1) the property was taken in August 2003, 2) 150 acres were taken (all property owned near the airport) and 3) the value of the property taken was $693,000.

After nearly two days of testimony and evidence, the jury upheld the Albinsâ?? claims.

Additional Information:

As additional information is received, it will be reported to you. You may contact me by telephone (Township Hall 448-2389 or Home 448-2441 or email johngallagher@tds.net) if you wish further details.

Jack Gallagher
Supervisor

[sbsp]

Is it possible that the State and Fed may say that this court case was not a result of their negligence or part of the original agreement? Therefore, the Townships will have to pay more than the 5% or 2 1/2% each, maybe the entire difference? That could be a huge financial liablility for taxpayers. Even just the 5% is significant during these hard times of tight money.
How did such a costly misunderstanding come about?

Kirk D. McBride

[AEW]

It would be very helpful to have a detailed, honest and accurate timeline from 2003 on. Who new what and when did they know it. If it was known that there was an unresolved claim or issue by any party involved why was that issue not resolved first before money spent and work done?

[John Bolton]

Such big numbers being thrown around... WOW!
$191K for 20 inland acres...ANYWHERE on the island is truly impressive...
There are so many questions...
Being in the dark about the inner workings of our airport committee, I, like most Island property owners, am only now seeing the product of all their hard work.
What were the folks thinking back then?
Who thought that particular property was that valuable, even before the collaspe?
Yet, what a great move on someone's part on seeing potential rising property values and getting in front of that marching band...did they know something the rest of potential islander property owners didnt when they purchased it?
How long had they owned it before the Island fathers decided they just HAD to have that extension piece for the advancement of our airport facilities? For what? Regional Airport status? Bigger jets? Bigger terminal?
I am confused.
I personally havent seen any property vaulations rise on Beaver Island since the tragedy of 9/11/01. While the rest of the U.S. economy slowly recovered from the attack, seems things on the Island never recovered momentum. A few years later when the country's bubble burst, the island took an even greater hit.
Now some Jury says this piece of ground is worth way over $600K.(??) and we, the taxpayers, are left holding the bag....
I would be impressed, except that spending other people's money is easy.
Is there a cat that needs to get out of a bag here?

OPINION:
We Taxpayers are paying for a ghost economy.
Less than 750 people call the island home year round. Seasonal travelers are perhaps 30-40 thousand. We have a huge private ferry system that barely has enough business to stay afloat (excuse the pun), even with substancial government subsidy.
We have a private airport that, historically, dominates a large portion of the commercial air travel traffic market share.
So what drives the us to push for more and more public facilitiy improvement?
The big tit of goverment dollars as Job Creator is drying up. This island can not afford now to maintain what we have, let alone add more public infrastucture.

And last, perhaps the two Townships should have hired the Plaintiff's lawyer instead of the one they used.

What a difference a gobal recession makes...

[BI Pirate]

John, I thought $8m tax payer dollars for a third boat when only one is used was over the top but now looking at the airport committee's spending, I'm obviously a small thinker. I guess that is why I'll die poor but our kids will die in debt over their heads.

Skull&CrossBones

[sbsp]

Mike: Does the Airport Committee believe it owes the taxpayers an explanation?

Kirk D. McBride

[Gillespie]

Seems to me the appraiser owes us all an explanation!!!

[AEW]

John Bolton your OPINION is spot on. The problem we face now has nothing to do with the appraiser Rich. It has to do with some really bad judgement. If all legal claims and issues were solved PRIOR to all the airport expansion projects we would NOT be in this situation. This is incompetence period. It seems to me an external investigation may be something to consider here. This is just tragic ineptitude.

[JFPowers]

Following up on John Bolton's comments, I think it is truly time to start taking the future vision of Beaver Island in another direction. I don't think our forefathers and the previous generations on this island looked for government stimulus to bail them out economically. Instead they relied on rugged individualism, good ole hard work and entrepeneurship. It is time that there becomes a much greater focus on Beaver Island to grow and enhance the private economic infrastructure. It will take creativity and hard work, but as John says the days of relying on the government to "create jobs and economic opportunity" are numbered. If Beaver Island is to thrive in the next several decades it isnt going to be on the back of taxpayer funded growth.

[AEW]

BRAVO JEFF!!!!!!!!!!!

[nancyls35@hotmail.com]

I guess I missing something here. 150 acres vs. 20 acres? Who actually holds the title to the other 130 acres?

[sbsp]

Nancy: Until the Airport Committee gets back to us there are a number of questions. However, I believe that the Airport needed an additional 20 acres required by the government which came from a 150 acre parcel that Albins owned. The Townships and government paid $191,000 dollars to purchase the 20 acres. Someone deemed that the taking the 20 acres, the entire 150 should have been part in the purchase or eminate domain. Obviously that was not the understanding of both parties and as a result the Townships now have the entire 150 acres with the court order that the Albins have an additional $500,000+ due them for the 130 acres plus legal costs, court costs and interest on that amount going back to the agreement date of the 20 acre transfer.

Again, this is strictly my understanding of the information thus far and the whole story needs to come out from the Townships and the Airport Committee.

I as a taxpayer and individual can not fault the Albins or the appraiser for any of this situation. I also feel we taxpayers are entitled to a transparent and honest explanation from those we have elected.

Kirk D. McBride

[treehugger]

I think the powers to be do a good job of getting money for the Island. Hey, if we don't get it, someone else will. Look at what has been the recipient of government money over the years.

1. BIRHC >$1 million
2. Senior Housing >$500,000
3. Airport $1 million
4. Emerald Isle, improvements to the dock, other buildings, and yearly subsidies >$6 million
5. Street paving, bicycle paths and street lights - ?millions
6. Second fire station - ? hundreds of thousands
7. probably others

Can't say we aren't doing well at the state and federal taxpayers expense.

[Rose Gallagher]

I can't read enough about what is happening with the airport and townships, I'm glad that now some people are paying attention. My appreciation to all who are willing to speak out for the rest. Rose

[AEW]

Hey Treehugger the Senior housing facility cost $1.1 MILLION dollars just to build. That is for 4 one bedroom and 2 Two bedroom apartments units. I have also been told that there is talk about a 50 year mortgage on the property. That would make 1.1 million a lot more after interest. But I am still awaiting a response from the CDC to find out where the money comes from to pay for the utilities, insurance, etc. I am also trying to find out how much KMG Prestige which is the private management company that runs the place is getting paid each year to do so. KMG refused to give me any answers and bounced me around to some people at the USDA for a while then they told me to contact the CDC here on Beaver Island. I support the idea of elderly and disabled housing on the island and I hope we are spending money in the most efficient manner to help those who are in need. I know peoples hearts are in the right place but we can do better with the peoples money. Also, The Emerald Isle hotel has 8 one bedroom units and 8 two bedrooms units with kitchenettes, all handicap accessible and it is for sale for 1.3 million. We did not get a lot of bang for our bucks at all.