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Campaign Donations Yield Treasure Island For Michigan Developer

On South Fox Island trading private influence for public land

January 10, 2001 | By Keith Schneider
Great Lakes Bulletin News Service

It’s not often that a raucous dispute involving fabulous wealth, raw insider influence, and an island paradise bursts into full public view in Michigan. But that is precisely what’s unfolding on South Fox Island, a wild and remote northern Lake Michigan atoll, 25 miles off the coast of Leelanau County. There, developer David Johnson, one of the state Republican party’s most important contributors, is attracting unusual devotion from the Engler Administration for a land deal that principally benefits himself.

Johnson wants to swap 665 acres he owns on South Fox Island for 625 acres of state-protected land on the island. Johnson justifies the proposal on the basis that it would eliminate a patchwork pattern of public land ownership that produces what he contends is a serious trespassing problem on his 2,204-acre Mirada Ranch, a maritime Shangri-la he has been building since the late 1980s.

The proposed swap, which was approved in December by K.L. Cool, the director of the Department of Natural Resources, would give Johnson the southern two-thirds of the island, including a particularly beautiful 115-acre parcel with an historic lighthouse and a mile of breathtaking beach.

Johnson and the governor’s environmental aides would have already pushed through the deal, except there’s one big rub. It requires federal approval. In 1971, the DNR signed a binding agreement and deed restriction with the US Fish and Wildlife Service that said the 115-acre parcel "shall not be sold, leased, assigned, or otherwise disposed except to another eligible governmental agency that the Secretary of Interior agrees in writing can assure the continued use and maintenance of the property for public park or recreational purposes."

At the time, senior DNR officials said they were thrilled with their new piece of Great Lakes shoreline. "Public ownership of shoreline is valuable beyond measure," wrote D.H. Jenkins, chief of the agency’s research and development division in a 1969 memorandum.

What’s so extraordinary now, a generation and a half later, is the Engler Administration’s undisguised disdain for the lighthouse and its eagerness to help a large campaign contributor. Johnson’s clout with the Administration is so superior that Cool personally accompanied him to a crucial meeting in September with federal wildlife officials in Minnesota to argue that the deed restriction covering the island’s southern tip should be violated.

That’s not all. The DNR also applied on Johnson’s behalf to the Department of Environmental Quality so that he can build a 1,400-foot road across the state land that Mr. Johnson hopes to own. The proposed road would connect Johnson’s land to the lighthouse and traverse protected sand dunes, endangered piping plover habitat, and a rare old growth stand of hemlocks. And in late December, at Mr. Johnson’s insistence, the DNR purchased 836-acre North Fox Island from him for $2.2 million in order to beat a tax deadline.

Contrast the Administration’s coddling of Johnson with the DNR’s stern treatment of residents in both Antrim and Mason counties who have formally applied to protect large parcels of state land in the Jordan Valley and Ludington State Park from any development. A law passed in 1998 by the legislature and signed by Gov. Engler established a process for ordinary citizens to nominate and then permanently safeguard particularly valuable stretches of the public domain. But Cool, and the governor’s appointees to the Natural Resources Commission, which oversees the DNR, set up numerous administrative hurdles and have taken more than a year to give the citizen applications serious consideration.

Senior DNR and DEQ leaders say their attention to Johnson has nothing to do with politics. They assert that hunters and other visitors will benefit from consolidation of all public lands on the north end of South Fox Island, and the purchase of North Fox Island was too good to pass up.

There’s merit in that position. But it’s also easy to argue that the South Fox swap represents one of the most transparent examples of political favoritism that has come to public attention in years. After a decade in power, the Governor and his environmental aides are particularly adept at parceling out Michigan’s publicly-owned treasures for sale, trade, lease, or private use by important political donors. The result is a deliberate and steady weakening of Michigan’s oversight of the public domain, and a deterioration of prized public resources.

  • In 1993, the DNR signed a private agreement with oil industry executives that enabled energy companies to write off of their drilling costs on state lands, a sweetheart deal that simultaneously accelerated damaging natural gas development in state forests and drained the Natural Resources Trust Fund of up to $8 million a year in royalty income.

  • In 1996, the Department of Environmental Quality proposed to violate a 21-year-old state management policy that prohibited industrial development a natural gas developer to drill in the Jordan Valley, a 22,500 natural area in Antrim County. After residents protested, the governor himself withdrew the drilling proposal.

  • In 1998, DEQ director Russ Harding allowed a Detroit developer to build homes and violate the terms of a state-approved conservation easement designed to protect the Humbug Marsh, the last undeveloped stretch of wetlands on the Detroit River south of Detroit.

  • In 2000, DNR Director K.L. Cool approved the sale of nearly three square miles of public forest land in Grayling solely for private economic development. The decision was made at the behest of a group of prominent Roscommon County Republican business leaders and local officials. It was the largest sale of public land solely for private economic development ever in Michigan.

Johnson certainly meets all the requirements for gaining political favors. He earned much of his wealth by converting an old cement factory in Petoskey into the billion-dollar Bay Harbor resort, where he regularly hosts fund-raising events for Republican candidates. His political history is told in large campaign contributions to GOP candidates and the party, more than $100,000 since 1987, according to public records. Johnson is one of the donors whom Gov. Engler and other party officials can reliably tap for large gifts, including a $20,000 donation last July to the Republican National Committee. Yet such lavish spending has cheapened the rule of law, hurt the state’s reputation for wisely managing the public domain, and damaged the public interest.

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