Court Opinion

ID: 9736064
Source: CourtListenerOpinion
Date Created: 2023-08-26 18:42:14.363177+00
Date Added: 2024-06-11T18:27:03.915550
License: Public Domain

Adams, J.
(dissenting). I agree that the determination of what constitutes a public purpose is primarily a legislative function and that there has been no abuse by the legislature of that function in its determination that the construction and operation of marinas is within the broad concept of public purpose.
*410The construction, operation and maintenance of the proposed city marina, in my opinion, is a “business enterprise” as those words are used in section 5(e) of the home-rule act (CLS 1961, § 117.5(e) [Stat Ann 1963 Cum Supp § 5.2084(e)]) and the charter of the city of Detroit, title 3, chap 1, § 12(h).
Neither the home-rule act nor the charter defines “business enterprise.” Michigan cases have been concerned primarily with the distinction between governmental and proprietary functions of cities. “Business enterprise” (while having a definite meaning of its own) can most nearly be equated to the proprietary function of a city.
Barron v. City of Detroit, 94 Mich 601 (19 LRA 452, 34 Am St Rep 366), declared that a market building constructed by a city was a proprietary function because there was “no imperative duty” cast on the city to construct such a building. Andrews v. City of South Haven, 187 Mich 294, 299 (LRA1916A 908, Ann Cas 1918B 100), held that an electric light plant was a “business concern or enterprise.” In Borski v. City of Wakefield, 239 Mich 656, a bus line was declared to be a purely business enterprise. In Lyshak v. City of Detroit, 351 Mich 230, a golf course, and in Marks v. City of Battle Creek, 358 Mich 114, an airport, were declared to be proprietary functions.
Cleveland v. City of Detroit, 322 Mich 172, involved the power of the city of Detroit to condemn property for a bus terminal and Cleveland v. City of Detroit, 324 Mich 527 (11 ALR2d 171), involved a project for underground parking. Both cases held the projects were not business enterprises, but there was no discussion of what is or is not a business enterprise in either case. They are not necessarily controlling here.
*411Mayor and City Council of Baltimore v. Baltimore Steam Packet Company, 164 Md 284, 292 (164 A 878, 881), analyzed the difference between the use of streets and water front developments as follows:
“The ordinary piers belonging to the city are in a material respect unlike the streets and other property to be maintained for the general public use. Held in what has been distinguished as the private ownership of the city, they are available to be given over into exclusive private use, for the purpose of raising revenue. ‘But the right to construct wharves is not held by the municipal corporation in its public or governmental capacity; the erection and maintenance of such structures are merely a business enterprise in regard to which the municipality acts in its private capacity.’ Farnham, Waters, § 123A; Dyer v. Baltimore (DC Md), 140 F 880. And city piers are commonly leased to private occupants for that purpose. In re Mayor etc. of City of New York, 135 NY 253 (31 NE 1043); Morgan City v. Dalton, 112 La 9 (36 So 208); Baltimore & Philadelphia Steamboat Co. v. Starr M. P. Church, 149 Md 163 (130 A 46) ; Baltimore City v. Steamboat Co., 104 Md 485, 488 (65 A 353). The grant of such property is not a grant of a privilege of exercising a calling by the grantee on property maintained for general public use, usually termed a license or franchise. 1 Dillon, Municipal Corporations (5th ed), § 363. It is ordinarily a bilateral dealing such as private owners might engage in. And it seems at the outset that, engaged in the same utilization of the public property as private parties commonly engage" in with private property, the parties to this grant probably intended to deal in the habitual, conventional manner, with the grantee bound to the whole of the specified term.”
In 18 McQuillin, Municipal Corporations (3d ed), at p 393, the following comment is made:
*412“It is generally held that a municipality functions in a private or proprietary capacity in operating and maintaining a pier or wharf.”
However, it is not possible to determine what is a business enterprise simply on the basis of the particular activity. For example, if a city should decide to provide a golf course for the public, there being none in the community, this would be a proprietary function, not a business enterprise even though a fee was charged. But if the city was amply provided with privately operated golf courses open to the public, and yet elected to operate a golf course of its own, the activity would be a business enterprise.
As applied to a city, the key word in defining a business enterprise is not necessarily profit. In the case of Union City Housing Authority v. Commonwealth Trust Co. (1957), 25 NJ 330 (136 A2d 401), the New Jersey court considered how to distinguish between governmental and proprietary activities and noted that profit is too narrow a test. It indicated other tests to be applied are whether the service is a traditionally governmental one, whether it is a mandatory duty imposed by the legislature, and whether the activity is permissive. The court concluded :
“The significant and controlling feature was that Delaware township ‘conducted a business in essentially the same manner as a private utility.’ ”
Business enterprises of cities do not involve an imperative duty, or a duty imposed by the legislature. They may be for profit. They may impinge upon and compete with private enterprise. They are conducted much like private business. Only by considering every aspect of an activity can a determination be made and effect given to the legislative and charter language which was intended to restrain *413a city from engaging in a substantial operation on tbe periphery of its corporate powers, i.e., a business enterprise, without approval by the people.
The summary of operating statements for the city of Detroit’s existing Memorial Park marina shows total revenues for 1964 of $37,135, and excess revenues over direct expense of $33,267.89; for 1963 of $36,812.50 and excess revenues of $21,089.64 over direct expense. Statements for 1959, 1960, 1961 and 1962 also reflect substantial revenues in excess of direct expense.
Plaintiff Kean Estates Corporation, at the time of trial, had 23 vacant boat wells and had had vacancies over a five-year period. Plaintiff Gregory Marina, Inc., had 20 vacancies and had had vacancies in each of the past five years. Detroit Boat Basin, Inc., had 14 vacancies and had had vacancies in each of the past five years. No marina in the area other than the city’s existing marina had a waiting list. Plaintiff Kean Estates found 12 of its former customers on the list of tenants at the city’s existing marina, and 16 of its customers on the city’s waiting list. Gregory Marina, Inc., found 8 of its former customers were tenants of the city and 11 of its customers on the city’s waiting list. Detroit Boat Basin, Inc., an affiliate of Gregory Marina, Inc., found 5 of its former customers were customers of the city and 6 of its customers on the city’s waiting list.
I agree with the trial judge who wrote:
“It is a commonplace in the law that an activity may be sufficiently a public function or a governmental function that a city may constitutionally engage therein, and yet * * * be performing a proprietary function. * * * The plans for operating the proposed marina, as testified to in this case, are most similar to the operation of a private marina, *414and the proposed marina will admittedly, if constructed, be in direct competition with private marinas. * * *
“Defendant city’s counsel in his opening statement, * * * recognized the business aspect of the proposed project. * * * We think it is equally clear that the proposed operation would be a ‘business enterprise’ within the meaning of the home rule act and the charter requiring a three-fifths vote.”
For the reasons above stated, I would affirm the judgment of the trial court.