Yesterday I may have implied that the City of Ypsilanti is on the brink of State receivership due to its financial situation. That was probably a bit far-fetched, but it’s not entirely implausible when you consider the Schrodinger’s cat that is Visteon as well as the happenings in front of our nation’s highest court.

On Tuesday, the United States Supreme Court heard the case of Kelo v. City of New London. The plaintiffs are residents of New London, Connecticut who had their homes near Long Island Sound seized through eminent domain in order to build parking lots, office blocks, a luxury hotel, as well as a park next to an existing Pfizer research facility. The City of New London is hoping this will revitalize the waterfront. In addition, the property tax on the proposed industrial-like plaza will far exceed the property taxes generated by the homes that presently occupy that space.

Eminent domain allows municipalities to seize private property provided they pay just compensation and the property be used for public use. At the heart of this issue is the definition of “public use.” In this case, the City of New London says that the public use clause is satisfied due to the increased property taxes will be a benefit to the community. Wow. If the Supreme Court rules against Kelo, it could open the doors for any city to claim large swatches of lower-income property with the goal of building middle or upper-income developments.

Now let’s give this an Ypsilanti spin. The property along East Michigan Avenue downtown has been claimed via the eminent domain process in order to build the Water Street Project someday (beginning July 2007?). The case of Water Street is different, but not that different. A few businesses have been forced to relocate, but for the most part, the land is contaminated. MmmmmmmmPolychlorinatedBiphenyls. If the Supreme Court rules in favor of Kelo, what is the legal status of Water Street then? There are a lot of opponents to the Water Street project — mostly because it’s price tag is a secret or unknown or not important to the City adminstration. It’s a guarantee that someone a whole lot crankier than me would sue them. Will it be forced to become a $34M park?

I hope City Council and the City’s legal staff is watching this case closely. Because depending on how the Supreme Court decides, receivership doesn’t seem such a crazy idea now.