STATE OF MICHIGAN IN THE CIRCUIT COURT FOR THE COUNTY OF WAYNE DETROIT PREP. Case No: Plaintiff, v. Hon. David .1. Allen DETROIT PUBLIC SCHOOLS COMMUNITY DISTRICT, 17-015227-CZ Defendant. FILED IN MY OFFICE WAYNE COUNTY CLERK 1/2/2018 9:36:18 AM CATHY ivl. GARRETT BODMAN PLC DETROIT PUBLIC SCHOOLS Jason R. Gourley (P69065) COMMUNITY hotlmanltm .com OFFICE OF GENERAL COUNSEL 1901 St. Antoine Theophilus E. Clemons 6Eh Floor at Ford Field Detroit, Michigan 48226 Jenice C. Mitchell Ford (P6151 l) (313) 259-7727 (Telephone) (313) 393-7579 (Facsimile) 301 1 West Grand Boulevard, Suite 1002 Counsetfor Plaintiff Detroit, Michigan 48202 (313) 873-4528 (Telephone) (313) 873-4564 (Facsimile) Counseifoi? Def?ndant Detroit Pubtic Schools District RESPONSE IN OPPOSITION TO PLAINTIFF DETROIT EMERGENCY MOTION FOR WRIT OF MANDAMUS AND PRELIMINARY INJUNCTION NOW COMES Defendant Detroit Public Schools Community District in response and opposition to Plaintiff Detroit Prep?s Motion to Stay Proceedings Pending Legislative Amendment filed by Plaintiff Detroit Prep (?Plaintiff?). A. Introduction This continues to remain a simple real estate matter wherein a property owner exercised its rights established under decades of Michigan jurisprudence to impose a lawful residential deed restriction. Nonetheless, Plaintiff ?led this lawsuit to contest Defendant?s exercise of its established property rights. Based on this Court?s statements identifying the weaknesses of Plaintiff" 5 legal challenge, Plaintiffis now pursuing the Michigan Legislature?s amendment of the Michigan Educational Instruction Access Act (the Simply stated, Plaintiff is not (apparently) winning in this Court so now it is seeking to change the law and retro?t its (seemingly) losing legal arguments. And to add insult to injury, Plaintiff is now asking this Court to postpone its interpretation of the Act to allow time for a possible amendment that if passed will grant Plaintiffthe relief that this Court cannot grant under the current law. At best, this is gamesmanship. At worst, it is an unfair manipulation of the legislative and judicial processes. In any event, this Court should exercise its jurisdiction over this pending matter and issue a ruling without waiting for a possible amendment. There is no guarantee that the amendment will be taken up by the Michigan House of Representatives Education Reform Committee in January 2013 or any set date. Moreover, there is no guarantee that the amendment will pass. In fact, Defendant has already submitted an objection to the proposed amendment. See Detroit Public Schools Community District?s Opposition To Preposed Amendment of Educational Instruction Access Act, attached as Exhibit A. For these reasons, and as explained below, Plaintiff Detroit Prep?s Motion to Stay Proceedings Pending Legislative Amendment should be denied in its entirety. Further, Detroit Public Schools Community District should be awarded all attorney fees and costs incurred in responding to Plaintiff's motion. B. Legal Argument ?[Tlhc burden is on the party seeking the stay to show that there is a pressing need for delay. and that neither the other party nor the public will suffer harm from entry of order." Ohio Env? Council US. Dr's: Court. 8 Dis! othio. Div. 565 F2d 393. 396 (6th Cir 1977). The most important factor is tlte balance of the hardships. but a ?court must also consider whether granting the stay will further the interest in economical use ot'judieial time and resources.? lift-?H for. 7'67 {53:3 of]. 638 'r'r 30H). Plaintiff?s motion for stay addresses this Court?s discretion to stay proceedings but fails to mention the burden placed on Plaintiff to establish that a stay will not harm the other party. Plaintiff cannot meet its burden because Plaintiff knows that the amendment will guarantee it victory in this lawsuit and will conversely guarantee Defendant defeat. Moreover. it is fundamentally unfair for Plaintiff to ?le suit against Defendant and when the case seems to not be going its way initiate an amendment and ask this Court to wait until the amendment passes (if it passes) to issue a ruling. Plaintiffis effectively asking this Court to be a part of its gamesmanship. C. Conclusion Defendant contends that the Act is inapplicable to the property in question. Further, the Act encroaches upon Defendant?s (and countless other public entities) constitutional, property and contract rights and amounts to an unlawful taking. The proposed amendment seeks to escalate such encroachment and constitutional violations. This Court is now being asked to effectively participate in that process. However. this Court has broad discretion to ?control the disposition of the causes on its docket" and can justifiably deny Plaintiff's request. For all of the foregoing reasons, Plaintiff Detroit Prep?s Motion to Stay Proceedings Pending Legislative Amendment should be denied in its entirety. Further, should be granted all attorney fees and costs incurred in responding to Plaintiff's motion. Date: December 29, 2017 Respectfully submitted, DETROIT PUBLIC SCHOOLS COMMUNITY DISTRICT OFFICE OF GENERAL COUNSEL By: ls! Jenice C. Mitchell Ford TheOphilus E. Clemons theophiluselemons-indent)ilk 2.1.113 Jenice C. Mitchell Ford (P6l51 l) 12.01}: 3011 West Grand Boulevard, Suite 1002 Detroit, Michigan 48202 (313) 873-4528 (Telephone) (313) 87'3-4564 (Facsimile) Counselfor Defendant Detroit Public Schools Community District CERTIFICATE OF SERVICE I hereby certify that on December 29, 2017', I electronically ?led the foregoing paper with the Clerk of the Court using the Odyssey File Serve system, which will send noti?cation of such ?ling to all counsel of record. Reslnectfully Submitted By: DETROIT PUBLIC SCHOOLS COMMUNITY DISTRICT OFFICE OF GENERAL COUNSEL is/ Jenice C. Mitchell Ford Theophilus E. Clemons (P47991) 1 lore Jenice C. Mitchell Ford (P61511) 3011 West Grand Boulevard, Suite 1002 Detroit, Michigan 48202 (313) 823-4528 (Telephone) (313) 823-4564 (Facsimile) Counsel for Defendant Detroit Public Schoois ommuniiy District EXHIBIT A DETROIT PUBLIC SCHOOLS COMMUNITY DISTRICT December 22, 2017 WA US and ELECTRONIC MAIL I-Ion. Tim Kelly, Chair Michigan House of Representatives Education Reform Committee N-l I98 House Oltice Building Box 30014 Lansing, Michigan 48909 Attention: Joy Brewer, Committee Clerk Re: Opposition to Senate Bill 702 Dear Representative Kelly: This note is sent on behalf of the Detroit Public Schools Community District (the "District"), On Wednesday, December 13, 2017, Senate Bill 702 was passed by the Michigan Senate and referred to the House Education Reform Committee. Senate Bill ?02 seeks to amend the Michigan Educational Instructional Access Act, MCI. 9123.104] e! seq. (the The District opposes Senate Bill 702 (the because it will Further inappropriately, negatively and unconstitutionally impact school districts, statelcity agencies and municipalities across the State of Ito/lichigan.I Speci?cally, the Act, as written and certainly as amended, usurps the authority of locally elected of?cials (mayors, city councils, school boards, etc.) and taxpayers by restricting the ability of elected officials and superintendents to ensure that when property is sold, there is a long-term benefit to the taxpayers. Although the Amendment has been proposed to bene?t a single charter school relating to a particular school building purchased with tax payer dollars formerly owned by the District the Amendment will have a far greater impact. I-?or example, if passed. the Amendment would not only negatively impact the District's ability to require certain uses for its properties it would also The District also believes that the Act itself should be repealed as it inappropriately takes away a city or school district?s rights to determine how tax payer assets will be used. 1 DETROIT PUBLIC SCHOOLS COMMUNITY DISTRICT restrict the mission and actions of quasi-governmental agencies such as the Michigan Land Bank Authority, Detroit Land Bank Authority and Downtown Development Authority. The Amendment should not be passed out of committee because it is too far reaching, and it strips public bodies and tax payers of their constitutional and property rights. I. The Current Act The Act, among other things, bars a local governmental body from enforcing a deed restriction that prohibits a property from being used For any lawful educational purpose. MCL The Act de?nes a local governmental body to include, among other things: a city. village or township; (ii) an educational institution; a local public authority or other local governmental, quasi-governmental or quasi-public body; and (iv) a public body that acts in an economic development or similar capacity for a local government. The Act applies to all of Michigan?s school districts. state quasi-governmental agencies, cities and city public authorities, boards or development agencies. For example, the Act applies to the Michigan Land Bank Authority, Escanaba Area Public Schools, City of Troy, Detroit Land Bank Authority and Downtown Development Authority. ll. Af?rmative v. Negative Deed Restrictions In 2014, the District sold a school building to a residential real estate developer. The District imposed a deed restriction which required that the property be used for residential purposes for a minimum of 10 years. This is an example of a positive use restriction that affirmatively allows for one specified use. Many land owners, including governmental entities, impose affirmative deed restrictions. For example, the Detroit Land Bank Authority imposes affirmative development covenants For the purpose ofdeveloping the Detroit community through development of residential units. A negative use restriction is one that expressly prohibits a property from being used for a purpose. For example. a church may impose a restriction that its property may not be used for strip clubs or liquor stores. In some instances, a city has imposed a negative use nestriction that a building could not he used for a charter school. DETROIT PUBLIC SCHOOLS COMMUNITY DISTRICT The Act Prohibits Negative Deed Restrictions Per the plain language of the Act, the Act prohibits deed restrictions that would not allow a building to be used as a school. Simply stated, the Act speaks to negative use restrictions. 11 does not speak to af?rmative ttse restrictions. The District is defending a lawsuit filed by Detroit Prep (?Detroit Prep"). Detroit Prep argues that the Act applies to the affirmative residential deed restriction in place on a school building formerly owned by the District. Based on a plain reading ofthe Act, the District contends that the Act does not apply. The parties are awaiting a ruling in the lawsuit. 1n the meantime, the Amendment has been introduced for the intended purpose of ?clarify?ngl deed restriction language." If passed. the Amendment will favor the plaintiffin this case and adversely impact the District?s position. legal argument, etc. IV. The Amendment Would Prohibit Both Af?rmative and Negative Deed Restrictions The Proposed Amendment provides, in pertinent part: (2) A local governmental body shall not impose, enforce, or apply any deed restriction that expressly, or by its operation. prohibits property . . . from being used for any lawful education purpose . . . . Any deed restriction or affirmative use restriction that af?rmatively allows for only I or more specified uses or purposes that do not include an educational use or purpose is prohibited under this subsection. Any restriction or affirmative use restriction in effect on July 13., 2017 that prohibits or does not permit property previously used for an educational purpose from being used for any future educational purpose is void. (emphasis in original). V. If Passed. The Amendment Will Have A Far Greater Impact Than The Pending Lawsuit It Will Negatively Impact All Michigan School Districts and Cities The Alt?tendment is a direct response to the issues at play in the pending lawsuit. However, if passed, the Amendment will result in many unintended consequences. such as: A. The Michigan Land Bank Authority and Detroit Development Authority could not have commercial deed restrictions for its properties that were former school buildings. Instead, the agencies would have to allow the properties to be used for commercial and educational purposes. DETROIT PUBLIC SCHOOLS COMMUNITY DISTRICT 8. Every school district in the State of Michigan will be impacted by the Amendment. No Michigan school district or city could enforce a single af?rmative use restriction, without also allowing the building to be used as a school. For example. if Birmingham Public Schools wanted to sell a former school building to a community center and impose a restriction that the property only be used for recreational purposes it could not do so. Instead, Birmingham Public Schools would be required to allow the building to also be used as a school. C. Every city in the State ot?Miehigan will be impacted by the Amendment. If the City of' Royal Oak wanted to sell a former school building in downtown near Main Street to a business and impose a restriction that the property could only be used for commercial purposes it could not do so. Instead, the City of Royal Oak would have to allow that building to also be used as a school. if the City of Detroit wanted to sell a former school building near the Riverwalk to the Detroit Riverwalk Conservancy and impose a restriction that the property could only be used for recreational purposes the city could not do so. Instead, the City of Detroit would have to allow that building to also be used as a school. The City of Detroit owns at least 77 former school buildings. VI. ()bjeetioni'Opposition to The Amendment The Amendment seeks to overturn years of real estate development law that has enabled towns and cities to direct growth in a manner than bene?ts their residents. Covenants can always be waived and removed in the future as a governmental entity determines that a restriction no longer bene?ts the needs of its residents. DETROIT PUBLIC SCHOOLS COMMUNITY DISTRICT For all of the reasons listed above, we strongly object to the passage oTthe Amendment. Sincerely, olai P. Vitti. Superintendent cc: Michigan House Education Reform Committee Members Detroit Public Schools Community District Board of Education Hon. Mike Duggan, Mayor City of Detroit Alexis Wiley, Chiefof Staff? City of Detroit Detroit City Council Michigan Association of Municipal Attorneys Michigan Association of School Boards Michigan Land Bank Authority Detroit Land Bank Authority Downtown Development Authority