CINCINNATI (CN) – A Sixth Circuit panel ruled Thursday that Michigan law does not allow voters to void or amend a $56 million tax increment financing related to the relocation of the Detroit Pistons basketball franchise.
Two people, only one of whom is a Detroit resident, failed in their attempt to convince the Cincinnati-based appeals court to place a referendum regarding the tax levy on this year’s ballot.
Robert Davis and Etta Wilcoxson argued in March that the tax increment financing, or TIF, being used to reimburse arena operators can only fund education-related expenses. They specifically claimed the city’s plan to pay back Olympia Entertainment and Palace Sports for arena improvements necessary to move the Pistons NBA team from Auburn Hills to Detroit is unconstitutional, but the panel disagreed.
Wilcoxson is a Detroit resident, while Davis says he is a “community activist” who “maintains a keen interest in the city’s affairs,” according to Thursday’s 12-page ruling.
U.S. Circuit Judge Eric L. Clay authored the court’s opinion, and found that the district court properly dismissed the declaratory judgment and mandamus claims brought by Davis and Wilcoxson.
Clay ruled the pair lacks standing to bring their claims against the Detroit Public Schools Community District and two downtown development authorities for several reasons, including state law regarding TIFs.
“Municipalities,” Clay wrote, “have no discretion in the matter. … Consequently, Detroit city voters cannot, through a public referendum, prevent the TIF transfers to the [development authorities], because the city cannot disregard or circumvent the laws of the state requiring such transfers.”
He continued, “In addition, a city-wide referendum would not affect how the [development authorities] spend the TIF revenue. Michigan law provides clear instructions on how a TIF plan can be modified…These statutes do not give Detroit residents the right to void a TIF plan through a public referendum. Therefore, a public referendum would have no legal effect and would not redress plaintiffs’ injury.”
Judge Clay also touched on Davis and Wilcoxson’s failure to set forth a particularized injury that would grant them standing.
“Plaintiffs,” he wrote, “were not affected by school board’s [sic] decision in any ‘personal and individual way.’ On the contrary, the school board’s failure to place plaintiffs’ tax question on the ballot affects all Detroit voters equally. Davis, moreover, is not even a Detroit voter.”
The panel did not reach the merits of the plaintiffs’ arguments after it determined they lacked standing to challenge the TIF and affirmed the district court’s dismissal.
U.S. Circuit Judges Danny J. Boggs and Joan L. Larsen also sat on the panel.