Michigan Land Use Institute

MLUI / Articles from 1995 to 2012 / Attorney General Denies South Fox Land Swap

Attorney General Denies South Fox Land Swap

Clouded land title needs clarity, she says

April 15, 2002 | By Keith Schneider
Great Lakes Bulletin News Service

  Attorney General Jennifer Granholm made it harder for the state to trade or sell public land with a long-awaited decision on a land trade that was set for Lake Michigan’s South Fox Island.
Northport, MI — In a striking decision that affects Michigan’s public lands policy and her own gubernatorial candidacy, Michigan Attorney General Jennifer Granholm has refused to authorize a controversial trade of public for private land on South Fox Island. Ms. Granholm, who is leading in the Michigan Democratic gubernatorial race, said that the land swap could not go forward until questions about who really owns the 219 acres of private land involved in the trade are settled.

Ms. Granholm’s opinion came in a letter on April 9 to K.L. Cool, the director of the Michigan Department of Natural Resources. Last December, Mr. Cool approved trading 218 acres of public land on South Fox Island for 219 acres of private land owned by David V. Johnson, a prominent developer. The Attorney General’s letter, which came in response to a formal request for a legal opinion filed late last year by the Grand Traverse Band of Ottawa and Chippewa Indians and the Michigan Land Use Institute, was made public today.

The attorney general’s opinion is the third time in 13 months that elected leaders rejected the proposed land trade. On March 13, 2001 the Leelanau Township Board vetoed a proposal by the Department of Natural Resources and Mr. Johnson to build a road through a magnificent freshwater sand dune protected under state law. That decision prompted the state DNR to withdraw its plan to trade more than 600 acres of public land for a nearly equal number of acres of Mr. Johnson’s land on South Fox Island.

In November 2001 President Bush signed a measure approved by Congress that required United States lawmakers to approve any land exchanged on South Fox Island that involved federal jurisdiction.

"This is strike three," said Brian Upton, the attorney for the Grand Traverse Band of Ottawa and Chippewa Indians. "With the latest defeat to these efforts, which was handed down by Jennifer Granholm, it is time for the DNR to abandon its attempts to finalize a land exchange that would serve no one but David Johnson. We are pleased that Attorney General Granholm has recognized our title concerns and the underlying unresolved land claims which exist on certain South Fox Island properties."

In a statement today, Mr. Johnson said the Attorney General's opinion was "deeply flawed," and could affect all Michigan property owners, a point that the Attorney General's office quickly denied.

"This opinion is not about one individual property owner and an isolated case of an Indian claim," said Mr. Johnson's statement. "Indians have reserved hundreds of potential claims on property throughout Michigan. Therefore, Michigan property owners throughout the state should be extremely alarmed at this far-reaching and inaccurate opinion."

The Department of Natural Resources said in a letter to Ms. Granholm that was made public today that the Attorney General’s opinion opened new and more rigorous requirements for selling or trading public and private land. "We respectfully request clarification on why you have imposed a new, higher standard and whether it would additionally be applicable to all pending and future real estate transactions between citizens, or corporations, and the DNR," wrote Mr. Cool.

State law requires the DNR to exchange public land only for private land with clear title. Moreover, all such exchanges must be authorized by the Attorney General. In November, the Grand Traverse Band alerted Ms. Granholm that its members had historic land claims on at least four parcels contained within the 219 acres that Mr. Johnson wanted to trade on South Fox Island. The tribe asserted that because of the "clouded" title, the land swap should not be approved. The tribe and the Michigan Land Use Institute, its co-plaintiff, made the same assertions in a lawsuit filed in state court in December 2001.

Ms. Granholm agreed. She directed Mr. Cool to "Request the seller to obtain a final judgement from a court of appropriate jurisdiction, which removes the clouds on the title."

Until those questions are resolved, said Genna Beaudoin Gent, Ms. Granholm’s spokeswoman, the land swap can not be completed. "The problems identified in the title would have to be solved. Until they are, the deal can not go forward," said Ms. Gent.

Mr. Cool, however, objected to Ms. Granholm’s view that tribal land claims were sufficient grounds to prevent a land swap on South Fox that he felt was legal and valid. "This is a significant change," said Mr. Cool. "Any alleged tribal claims are apparently viewed by you as sufficiently valid to delay or terminate any proposed transactions until the property owner takes on the extraordinary burden of clearing such claims by means of obtaining final judgement by a court of appropriate jurisdiction."

Brad Wurfel, a spokesman for the DNR, declined to say whether the department or Mr. Johnson would pursue a different land trade on South Fox Island that involved parcels with clear titles. Such a strategy could have substantial political risks for Governor John Engler and the Republican party, which is battling to retain control of the Legislature and the governor’s office, said political analysts in both parties. The South Fox land swap has attracted significant public opposition throughout Michigan. And public opinion polls have indicated that the Engler administration’s record of neglect on environmental issues is hurting Lieutenant Governor Dick Posthumus, the leading Republican gubernatorial candidate.

Meanwhile, state Senator Gary Peters, a Democrat from Bloomfield Township, has proposed a bill to ban any trade of public for private land on South Fox Island. A spokesman for Mr. Peters said today the legislation could be introduced as early as Tuesday to end any land trades on the Lake Michigan island.

Of all the scenic places in the Great Lakes, few are as splendid and wild as South Fox Island, a 3,400-acre expanse of high dunes, green forests, and unspoiled beaches about 25 miles off the coast of Leelanau County. A third of the land is owned by the state in large parcels dispersed across the island.

In 1988, David Johnson — who earned much of his wealth by converting an old cement factory near Petoskey into the billion-dollar Bay Harbor resort — purchased the other two-thirds of South Fox Island, or 2,204 acres. There Mr. Johnson built Mirada Ranch, a luxurious maritime retreat that sported a paved runway for his fleet of airplanes, a magnificent main house, well-appointed guest houses, and a barn for purebred Tennessee walking horses.

Soon after he bought the land, Mr. Johnson first proposed swapping a portion of his holdings for public land in order to establish a clear boundary. In an interview, Mr. Johnson said trespassing and his family’s safety was his primary concern. "I’ve found strangers, people I didn’t know and didn’t invite, standing in my guest cottages," he said. "I’ve had confrontations on my land with hunters carrying loaded weapons who weren’t happy when I asked them to leave. Trespassing has been a significant issue out there."

But critics, including some senior DNR officials, said Mr. Johnson exaggerated the trespass and safety issues and that the various swap proposals would have unfairly benefited him at the public’s expense.

Mr. Johnson sweetened the deal in 2000 by offering to trade 665 acres he owned for 625 acres of state-protected land. The proposal would have given Mr. 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. The lighthouse and beach had once belonged to the federal government. The state took possession in 1971 after it signed a binding agreement and a deed restriction that said the United States would retain the authority to review and approve any new change in ownership.

DNR Director Cool jumped at Mr. Johnson’s proposal. He even accompanied Mr. Johnson to a meeting with federal wildlife officials in Minnesota, who were needed to sign off on the exchange. In December 2000, despite scant public comment, Mr. Cool formally approved the swap.

By that time, though, the DNR director’s support for Mr. Johnson and the land deal had generated a wave of public opposition. Environmental organizations, the Grand Traverse Band, and hunting organizations were surprised by the state’s extraordinary devotion to an agreement that was so obviously one-sided in favor of a private landowner. In exchange for some of the most magnificent maritime real estate in the entire Great Lakes region, the public would get lands and forest of far lower economic, scenic, and ecological value.

Ms. Granholm’s decision apparently strikes down an agreement reached by the DNR and Mr. Johnson on December 7, 2001 to trade 218 acres of waterfront, including some of the tallest fresh water sand dunes in the world and a rare stand of coastal white cedars more than 400 years old. In return, the state would have received 219 acres of second and third growth pine and rather ordinary beach that Mr. Johnson previously owned and was eager to give away.

At the time, Mr. Cool said the deal was negotiated with "the highest degree of care, professionalism and expertise." Mr. Johnson added that his new holdings would have provided a "southern buffer" to shoreline he already owns on South Fox and where he plans to build "a home with a sunset view on the western shore."

But the Michigan Land Use Institute, the Sierra Cub, and the Grand Traverse Band of Ottawa and Chippewa Indians noted the striking imbalance in the ecological and economic values of the two parcels and that there were tribal claims and clouded titles to 200 of the 219 acres that the state was scheduled to receive.

Keith Schneider is an environmental writer and program director of the Michigan Land Use Institute. Reach him at keith@mlui.org For more of the Institute’s first-rate journalism see www.mlui.org

Michigan Land Use Institute

148 E. Front Street, Suite 301
Traverse City, MI 49684-5725
p (231) 941-6584 
e comments@mlui.org