Why a recall effort could complicate Lansing's plans to develop megasite

EAGLE TWP. — Patti Schafer seemed to be doing a great job as a township supervisor until a multi-billion dollar opportunity came knocking and she didn't share what she knew, said Troy Stroud, a township resident organizing a recall effort that could oust her from office and have wide-reaching economic effects across Michigan.

Schafer has been on the Eagle Township board since the mid-1990s. It has been that long − a quarter century − since the last time an elected official in Clinton County was subject to a recall election

Schafer signed a non-disclosure agreement in the spring of 2022, with the support of at least some of her fellow township board members and at the behest of the Michigan Economic Development Corporation, a quasi-state agency that recruits and supports businesses.

The non-disclosure agreement, or NDA, is common in Michigan for large development and was part of an effort by local, regional and and state officials to market 1,400 acres of farmland largely owned by Michigan State University as a megasite ripe for development by a battery or computer chip campus or other high-tech operation.

Proponents argue such a development at one of only a handful of sites that large in Lower Michigan could bring thousands of good paying jobs to the mid-Michigan region, which is losing population. Opponents, hundreds of which have turned out at meetings in recent months, are generally opposed because they don't want to lose the farmland and the rural character of the township of less than 2,800 residents.

While it could be weeks before the recall qualifies for the ballot, the prospect of an election is the latest development for the future of a site that is increasingly fluid as county officials mull zoning for the site, which must be changed before officials with the MEDC and the Lansing Economic Area Partnership could bring another major employer to the region.

Detroit labor and employment attorney Chris Trebilcock is representing Schafer, and said the recall effort is simply an effort to "intimidate, bully and harass a non-partisan public official for carrying out her oath of office."

'It turned sour that night'

Dennis Strahle, an Eagle Township trustee, said he was there when the township board voted to allow Schafer last year to enter into a non-disclosure agreement to learn about a potential multi-billion-dollar investment for the land north of Grand Ledge near M-100, State Road and Interstate 96.

He said he doesn't remember if he voted for the non-disclosure but said if he did, it was wrong in hindsight. He added he wouldn't enter into an NDA even for a billion-dollar investment the community supported.

Township records didn't show a roll call for the vote, so it's not clear how Strahle voted.

"To me," Strahle said, "it turned sour that night. I was told some information and not allowed to go home and talk to my wife. The thing of it is we were all very concerned if we violated the NDA we’d be in deep doo doo."

Strahle said he didn't recognize how much turmoil the NDA and the megasite would cause when he voted.

The land was donated to Michigan State University years ago at the bequest of David Morris, a former Eagle Township supervisor and widely admired farmer. The university intends to sell the land to raise money that would go toward agricultural programs.

Strahle said Schafer has not lived up to her obligations to share more information with the public. Schafer spoke at length about the project in a February meeting, revealing some details that she said had been covered by the NDA since a potential buyer had gone elsewhere and she believed the NDA was no longer binding.

Strahle said he believes now there were only two real restrictions to the NDA that Schafer signed − that she couldn't share the name of the interested company and how much it would invest.

How common are NDAs?

NDAs are legal contracts often used to give someone access to information in exchange for confidentiality.

Michigan has had eight developments of $1 billion or more in the last three years, all of which had NDAs, said Josh Hundt, the MEDC's chief project officer and vice president.

“We are entering into these agreements because of the financial and propriety information of the companies and we ultimately recognize the importance of transparency and seeing projects locate in communities," he said. "They are put in place because projects may contain sensitive propriety business information about the company. They’re looking at multiple states and communities in terms of where they locate. They want that to remain proprietary until they're ready to make a decision on where to locate."

When a company decides to locate, the same public meetings and hearings that are required of every development happen in the open, Hundt said.

NDAs are used to let local and regional officials into negotiations before a company locates in an area, Lansing Economic Area Partnership CEO and President Bob Trezise said in a statement, reiterating Hundt's point that ultimate approval is granted, or not, at public meetings.

Could NDAs become a liability for local officials?

Navigating NDAs is a balancing act for elected officials: Getting good things for residents on one hand while being transparent on the other, said Gerald Fisher, a municipal law professor emeritus from Western Michigan University's Cooley Law School and a former chair of the Michigan State Bar Public Corporation Law Section.

He said elected officials in some cases would be wise to sign an NDA, to learn more about a potential project and to help shape it to local needs, but there should be time limits and the official should be public with most if not all the information prior to any votes.

"There should be a cutoff date," Fisher said. "NDAs should apply to certain times of deliberation. At the end of the day, you need to be open with the public. One of the purposes of the Open Meetings Act is to inform the public of facts and circumstances so public officials can be accountable."

Strahle, who supports the recall of Schafer, said one of the reasons for the NDA was to avoid running afoul of the federal Securities and Exchange Commission. He said attorneys said the NDA could prevent people from buying up land before a public announcement of a potential megasite.

Those type of land deals are one of the reasons for an NDA, said Tim Bartik, senior economist at the Kalamazoo-based W.E. Upjohn Institute for Employment Research, in an email.

"I could see a rationale for NDA on projects before they're announced, for example for competitive reasons and for land assembly reasons. However, I see no rationale for NDAs after the project is announced, and in fact for democratic accountability and evaluation, you need to disclose all elements of the deal."

In Marshall Township, which has a megasite, Marshall area resident Glenn Kowalske is trying to recall Marshall Township Trustee Robert Lyng because he voted for land transfers with the city of Marshall to support Ford Motor Co.’s $3.5 billion electric-vehicle battery plant there.

The Calhoun County Election Commission voted against the language in late March, saying it lacked sufficient clarity. Kowalske submitted new language that is pending.

What's next for the recall effort?

The recall specifically mentions Schafer signing an NDA but the bigger goal is to halt a push for a megasite since residents should have been informed earlier and in more detail about a potential project, said Stroud, who filed the petition.

The recall effort was given a green light in late March by the Clinton County Election Commission, which unanimously determined the petition was clear and factual. It did not, as a matter of policy, assess the truthfulness of any allegations.

“In the Spring of 2022, Eagle Township Supervisor Patti Schafer signed a non-disclosure agreement pertaining to the potential large-scale development of land in Eagle Township. This act limited the information available to Eagle Township residents affected by the potential development," is the full language of the recall petition.

Schafer intends to file an appeal by a Monday deadline, said Trebilcock, one of her attorneys.

"We are confident the court will reject the petition for its lack of clarity and obvious political design to retaliate against and harass a local public official just trying to do her job and serve her community."

If the petition survives the appeal, Stroud would need to get around 450 signatures, about a quarter of the number of voters in the township in the last gubernatorial election. The recall election would, if the signatures are obtained and any appeals are denied, happen in November, at the township's expense, said Deb Sutherland, Clinton County's clerk.

"We almost had a megasite and that wasn't communicated," Stroud said. "(Schafer) said she signed an NDA that prevents her from telling us."

He said opposition to a megasite has united Eagle residents, who are gathering more often than before to talk about their community's future.

Who controls zoning at the site?

As residents wait to see whether there will be a recall election, there is a second petition that aims to create a township planning commission, which could eventually have authority over the megasite.

The site is currently zoned agricultural and would need to be rezoned to accommodate a high-tech campus, county officials have said. The county, which currently controls zoning in Eagle Township because the township does not have a planning or zoning commission, is considering redrawing a land use map to allow for the rezoning. Rezoning would first need a study, and the consultants hired for that study have been put on hold by the county until December at the request of Eagle Township's board.

Stroud has a race on his hands. The timeline to create a planning or zoning commission for the township would require several months, including getting an Eagle Township board approval, a new planning ordinance, outside review of the ordinance and the commission would become effective 63 days after the ordinance is first published.

The Eagle Township board tabled its discussion of creating its own planning commission at its last meeting. It is scheduled to take up the issue again on April 20.

LEAP has advocated publicly for the site. The organization recently sent out a mailer in support of the megasite, which was received by Clinton County residents who don't live in or near Eagle Township. The purpose of the mailing was to ensure the region has accurate information about the site and understands there is significant support for vision, said Victoria Meadows, LEAP's director of marketing, communications and talent. She did not respond when asked how many fliers LEAP mailed and how much the effort cost.

Contact Mike Ellis at mellis@lsj.com or on Twitter @MikeEllis_AIM

This article originally appeared on Lansing State Journal: Why a recall effort could complicate Lansing's plans to develop megasite