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$120,000 RIP-OFF 
The Russell and Lois Volkema Story

Since 1963, Russell and Lois Volkema have owned a 24.6-acre parcel of commercial property in Kentwood, Michigan. During this time, the Volkemas have invested heavily in constructing roads, parking facilities, utilities, sewers and a retention pond on the property. By 1991, the property was worth nearly $500,000, or $20,000 per acre.

That year, the Volkemas planned to build a water park on the site that would operate with another park on a contiguous 10-acre site. Because the Michigan Department of Natural Resources (DNR) classified a 4.3-acre section of the land as a wetland, they had to apply for a permit to fill in the wetland, which the DNR promptly denied. As a result, a total of 5.7 acres immediately around the wetland could not be developed. The Volkemas lost more than 20 percent of their property with a value of about $120,000 but the DNR refused to compensate them.

The Volkemas went to court demanding they be justly compensated for the loss of their property. Although a trial court agreed that the DNR's wetland classification made one-fourth of the land unusable, the court ruled that the Volkemas were not due any money because they could still use the other 18 acres. In 1993, the Michigan Court of Appeals issued a ruling in which the court agreed that the Volkemas had been "deprived of all the economically beneficial use of their land." Nevertheless, the court of appeals still ruled that a regulatory taking had not occurred. The Michigan Supreme Court rejected their claim in 1998.

Throughout the case, the state argued that the DNR's permit denial is similar to limitations placed on property by routine zoning ordinances which do not rise to the level of regulatory takings. The Volkemas argued that such restrictions on property use are only justified by health and safety concerns attendant to the use of the property.
Source: Pacific Legal Foundation