Detroit, Michigan

In the 1981 Poletown decision, a seminal case credited with providing the rationale for the widespread use of eminent domain for private profit, the Michigan Supreme Court allowed the City of Detroit to seize and bulldoze an entire neighborhood so General Motors could build an auto plant.  In total, more than 4,200 people were displaced from their homes, and the government’s wrecking ball claimed 140 businesses, 6 churches, several non-profits and one hospital.[1]  GM paid Detroit $8 million for the property, while the City paid more than $200 million to acquire and prepare the land for the automobile giant.  A total of $150 million in federal loans and grants, combined with more than $30 million in state government funds, enabled the City to make the purchase.[2]

Remarkably, in addition to destroying a historic, racially diverse community, the redevelopment project failed to meet its many promises and expectations.  Detroit Mayor Coleman Young and General Motors promised that the redevelopment project would create more than 6,000 jobs—but when all was said and done, the plant employed less than half that many.  By 1988, the plant employed merely 2,500 people.[3]  In fact, it is estimated that the destruction of the entire Poletown neighborhood probably resulted in a net loss of jobs.  The City’s own estimates conclude that about one-third of the businesses displaced by the project closed immediately.[4]  This underscores even further just how much of a failure the project was.

In July 2004, the Michigan Supreme Court finally reversed its now infamousPoletown decision in County of Wayne v. Hathcock.  The Court called Poletown a “radical departure from fundamental constitutional principles.”[5] Unfortunately, that radical departure also resulted in one of the worst ever failures involving the abuse of eminent domain.