2017-12-09 / Top News

City Maintains Ownership of Astor Street at Coal Dock

By Jacob A. Ball

The 11th Circuit Court of Mackinac County, on December 5, decided ownership of parcels adjacent to the Coal Dock, placing three parties in possession of the associated riparian rights, and bringing the city a step closer to control of the dock as a municipal freight dock.

The city claims it is happy with the decision, but Mackinac Island Ferry Capital attorney Matthew Vermetten of Traverse City told the Town Crier that the company plans to appeal it.

In the judgment, issued by Judge George J. Mertz, the City of Mackinac Island was awarded ownership of the end of Astor Street, between the Coal Dock and Main Street, and thus the riparian rights associated with this parcel. Mackinac Island Ferry Capital and Sandra and Debra Orr were also awarded ownership of parts of the land adjacent to the dock. Ownership of the Coal Dock ultimately rests with the State of Michigan, which owns the bottomlands. The state leases bottomlands to those with riparian rights. Ferry Capital had claimed ownership, but the bottomlands were never leased from the state and, with the decision, rights to the Coal Dock are now divided between it, the city, the Orrs, and, to a smaller degree, to Anthony Trayser.

The decision to grant riparian rights to the City, along with Sandra and Debra Orr and Mackinac Island Ferry Capital, establishes an ownership structure of the Coal Dock. Ferry Capital, the current owners of Arnold Freight operations, had claimed the riparian rights associated with the other two parcels and thereby the entire dock. The court’s decision divides the rights, which will alter the details of any eventual sale. In addition, the opinion certified the validity of an earlier agreement that was meant to settle any ownership disputes related to the parcels. It also reasserts that riparian rights cannot be severed from the adjacent property. This opinion identifies multiple owners of the riparian rights of the dock based on their upland title. An eventual move to gain full control of the Coal Dock could now be negotiated with multiple parties, according to city attorney Tom Evashevski. He also added that an appeal of this decision by Ferry Capital would not be surprising.

The issue of ownership of these parcels has been ongoing since at least 1983, when the previous owner of the dock, Union Terminal Piers, attempted to acquire a deed to the filled bottomlands adjacent to the Astor Street parcel. MIFC’s position is that the dispute was supposed to have been settled by a 1997 agreement between the parties that established the city as the owner of the parcel, while providing MIFC with the associated riparian rights. The city’s opinion was that the agreement was meant to clarify that the city owned all of the Astor Street parcel including the riparian rights. The agreement was also supposed to allow Union Terminal Piers to acquire a deed to the filled bottomlands, however, since they were not the owners of Astor Street, the state would not grant them this deed. The previous owners never took any action in regards to this problem with the agreement. The only subsequent correspondence from them was in relation to the continued public use of Astor Street, and made no mention of the problems with obtaining a bottomlands deed.

The foreclosure of Arnold Transit Company to Mackinac Island Ferry Capital reopened this issue, because without ownership of the parcels adjacent to the Coal Dock, the company does not own the riparian rights needed to sell the entire dock to another party.

“They don’t have exclusive control over the coal dock,” Mr. Evashevski said.

Mackinac Island Ferry Capital (MICF) presented three standards by which it believed it was the sole owner of the portion of Astor Street that directly connects to the Coal Dock. These standards were disqualified based on a lack of evidence to support the claims.

For example, Ferry Capital argued its right to the parcel based on adverse possession, however, this statute is based on a hostile ownership of property in conflict with the actual property owner’s rights. Previous owners and Ferry Capital have been permitted to use Astor Street as a public way, however, and the dock owners never sought to limit access to only their employees and customers. The court’s opinion did not subsequently find any reason to grant ownership of Astor Street to Ferry Capital on these grounds, or by any.

“There is no evidence whatsoever to indicate that since 1997 [the previous owners] ever held itself out as the owner of the Parcel against the City or the general public,” the judge wrote.

The opinion delivered by Judge Mertz on the ownership of Astor Street also granted riparian rights to the city. Settling ownership of the riparian rights associated with the Coal Dock is one of the main details obstructing its sale.

An alternative strategy employed by Mackinac Island Ferry Capital to gain ownership over any of the bottomlands adjacent to the Coal Dock was an attempt to nullify or renegotiate the 1997 agreement that had granted ownership of the Astor Street parcel to the city. In 2004 the Michigan Department of Environmental Quality denied a deed application submitted by the previous owners for the filled bottomlands connected to the Astor Street parcel. The judge asserted that the previous owners had been informed of the problem with the agreement at this time, which triggered the applicable six-year statute of limitations.

“MIFC must be bound by the action, or in this case inaction, of [the previous owners] with regard to any contractual claims,” the opinion said in response to the evidence.

The court denied MICF’s claim to reform or rescind the agreement. The opinion added that to take either of these actions now “would result in undue prejudice to the City and would simply be unfair.” Denial of each of these claims certified the City’s ownership of the Astor Street parcel by identifying the real and contractual basis of their rights. Mr. Evashevski said the city is pleased with this outcome, as the opinion delivered on everything they asked for. He said Judge Mertz did a good job of boiling down the issues at hand, and applying the law accordingly.

MIFC, alternatively, attempted to gain the riparian rights associated with a property adjacent to the Astor Street parcel based on a 1907 sale of the property from the Arnold family to the Bogan family. This parcel is now owned by the Orr sisters. At the time of sale, the Arnold family had included a reservation in the sale that severed the riparian rights from the parcel itself. Judge Mertz said that this was legally questionable at the time, and, more importantly, legally prohibited under current law. He determined that it was not unfair to apply current standards, as the applicable case law did not establish a new principle but rather reaffirmed the existing understating of riparian rights.

“It merely clarifies and expands on well-established earlier law that riparian rights are tied to and dependent on ownership,” he wrote.

An additional property owned by Anthony Trayser might also own a small portion of the riparian rights associated with the Coal Dock, according to Mr. Evashevski, but, if so, it would be a small interest.

In any case, the separation of water rights from the parcel was not allowed, and the opinion stated that the owners of each parcel, up to present day, then retained the riparian rights.

Among the six claims presented by MIFC, Judge Mertz denied all of them.

In closing, he also wrote, “This Opinion and Order does not resolve all remaining claims and does not close the case.”

Further discussion will be organized between the conflicting parties based on an order by the judge for a status conference on “the next available date.”

The state will still need to sort out how it might lease the bottomlands under the Coal Dock.

Mr. Vermetten, the attorney for Mackinac Island Ferry Capital, said the company plans to appeal portions of the decision as allowed by state law.

“Clearly, Mackinac Island Ferry Capital is not pleased with the opinion and the order,” he said, although MIFC appreciates that the court took significant care to draft the decision, which took more than six months from the initial hearing in June.

“Obviously, the court took time to create the order,” Mr. Vermetten continued, “but we disagree with several matters within the opinion, and we believe those are appealable issues. We have to take whatever steps necessary to proceed accordingly.”

Mr. Vermetten observed that Judge Mertz’s order was intricate in its findings and carefully explained the issues surrounding the ownership and rights of the Coal Dock, which he said MIFC appreciates. Further, the order explains that those issues were not of MIFC’s making, but rather lie in deals Union Terminal Piers (UTP) and Arnold Transit Company made in 1997 and 2004.

The order acknowledges that, “MIFC stepped into the shoes of UTP, and UTP had not done some things to rectify those situations in a timely manner,” Mr. Vermetten said.

The decision can be found on the Town Crier Web site, mackinacislandnews.com, under General Documents.

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Ownership seems complex. Who

Ownership seems complex. Who paid property taxes on the parcels? If Arnold Line and Mackinac Island Ferry paid property tax to the City, that would infer ownership to Arnold Line and successors. If Arnold and Mackinac Island Ferry made lease payments to the City, that would support City Ownership. Paid taxes to the City over decades would clearly support Arnold Line and successors claim to adverse possession.
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