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Granholm, legislative leaders ask courts to expedite decision on property sale to Toyota Technical Center

Lansing, MI: Last week, Michigan governor Jennifer Granholm took the rare step of asking the Michigan Supreme Court to expedite the resolution of a lawsuit (DPG York, LLC v State of Michigan) challenging the sale of state-owned property in Washtenaw County to Toyota Technical Center USA, Inc. (TTC). 
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Proposed Toyota site, off of US 23 at Exit 31, near Saline, which is the subject of litigation.

According to its Web site, www.toyota.com, TTC signed a purchase agreement, announced in April of 2005, with the State of Michigan for property being offered by the State of Michigan. The approximately 690 parcel of land owned by the State of Michigan is located at the North West corner of US 23 and Willis Road in York Township, Michigan. [Site includes a lake and is adjacent to Exit 31 of US 23, two miles east of Saline.]

TTC plans to expand its research and development operations to complement Toyota’s increased localization and growth of manufacturing and sales in North America. TTC’s current 106 acre Ann Arbor campus has limited space for future growth, as set forth at its Web site.

According to its Web site, “We think the York Township property is large enough to give us the assurance of being able to plan for TTC’s short term as well as long term growth,” said Dr. Akihiko Saito, Executive Vice President, Toyota Motor Corporation. “The North American growth in sales opened the door for Toyota to establish our manufacturing operations which in turn supported the localization of our R&D presence. The York Township property will provide adequate space to conduct our engineering and research for Toyota's core North American vehicle development programs.”

The purchase agreement allows TTC to move forward with due diligence activities and obtain various approvals, which include zoning changes and site plan approval by York Township. The goal of TTC is to close on the property and begin facility construction in the spring of 2006. As set forth at its Web site, the first development phase is targeted for a capital investment of $150 million and will add 400 new jobs by 2010.

Established in 1977 and headquartered in Ann Arbor, Michigan, TTC is Toyota’s North American research and Development Center. TTC is engaged in engineering design, prototype building, vehicle evaluation and engineering, materials engineering, powertrain tuning and design, regulatory affairs (including EPA emissions certification) and technical research. TTC has been responsible for the development and engineering of Toyota vehicles manufactured in North America including the Camry, Solara, Avalon, and Sienna. TTC engineers are currently developing the next generation Tundra.

In an executive message to the Court, Granholm said resolution of the constitutional challenge to a law authorizing the property sale is of such importance that it requires a final resolution as quickly as possible.

While Granholm is asking the Supreme Court to expedite resolution of the case, the Governor also joined forces with Senate Majority Leader Ken Sikkema, Speaker of the House Craig DeRoche, Senate Democratic Leader Bob Emerson, and House Democratic Leader Dianne Byrum in filing a joint brief outlining the legal position of the leaders of the executive and legislative branches of state government to the Court of Appeals.

“This lawsuit is having a negative effect on the ability of the state to move forward with an economic development project that will result in hundreds of new highly skilled jobs and millions of dollars of capital investment in research and development,” Granholm said today.

“Failure to resolve this litigation will have a significant negative impact on Michigan’s economy, which is why I am respectfully asking the Supreme Court to resolve this issue once and for all.”

In late December, the Supreme Court asked the Court of Appeals, which had previously upheld the sale, to consider an additional question: Did the law paving the way for the sale of property to Toyota wrongly delegate authority to the executive branch in a way that violated due process protections?

The sale of the property was legislatively authorized by Public Act 326 of 2004.  Consistent with the clear intent of that law, the Department of Management and Budget negotiated the property sale to Toyota, because it not only ensured the state received fair value for the property as determined by an independent appraisal, but it also would generate substantial positive economic impact for the state of Michigan.

“Now that this case involves the single remaining issue on the validity of PA 326 by which the Legislature outlined specific standards and procedures for the sale of property, it is important that the question be answered as quickly as possible,” Granholm said. 

“Without final resolution early this year, the state’s ability to move forward with this vital economic development project will be compromised, with negative consequences for the state.”

The bipartisan, bicameral amicus brief asks the Appeals Court to dispose of the constitutional challenge to PA 326, noting that the Legislature made clear not only its intent that the sale of land represent a “fair exchange of value for value,” but also its desire that the state take into account the best interests of the state, including any positive economic impact likely to be generated, especially the economic impact resulting in the creation of high-technology or highly skilled jobs or capital investment for research and development. 

Realtor Julie Picknell of Saline, Michigan

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“The challenged act represents not only a direct exercise by the Legislature of its authority to provide for the sale of state lands, but also of its authority to manage such state resources in the manner that best protects the long-term interests of the state and its residents,” the brief states.  “Executive branch approval through the State Administrative Board directly effectuates the legislative mandate to dispose of these surplus parcels in a manner that will best assure not only that the state receives fair value for the property but also that the proposed use will generate substantial benefits for the state’s economy.”

According to area real estate agent Julie Picknell of the Charles Reinhart Company Realtors, who is based in Saline: “I concur with the actions taken by the governor and legislators. We need this agreement concluded as soon as possible so that Toyota can proceed to commence construction at this ideal site. It will have an incredible, positive effect on the businesses and residents in the area.”