Why the Township Can’t Zone This — and Won’t Tax It

Almost every argument about this project runs into the same two walls.

Ypsilanti Township can’t apply its zoning to this facility. And the facility won’t pay a cent of property tax to the township, the schools, the library or the fire department.

Those are two different rules, from two different places, doing two different things. People tend to blur them together, and that makes the whole situation harder to argue about clearly. So here’s each one, how it works, and what it does and doesn’t cover.

Part one: the zoning exemption

This one comes from the Michigan Constitution, which is the top of the pile. When it conflicts with a township ordinance, it wins.

Article VIII, Section 5 makes the Regents of the University of Michigan a body corporate, and says this:¹

Each board shall have general supervision of its institution and the control and direction of all expenditures from the institution’s funds.

That’s it. That’s the sentence. Eight elected Regents, serving eight-year terms, with general supervision of the institution — and courts have long read that as putting the University outside local land use control.

Where it came from, and why

It dates to 1850, and the reason is worth knowing because it’s a good one.

The Legislature had been running the University directly and had made a mess of it. A legislative committee looked at the problem and concluded that the fix was to get politicians out of the way — so the 1850 constitution created an elected Board of Regents and handed it the governing power. The university did markedly better afterward, and later constitutions extended the same arrangement to Michigan State and Wayne State.²

So the purpose of this provision is academic independence. Keeping legislators and mayors from dictating what gets taught, researched, or funded. That’s a defensible idea and I’m not arguing against it.

What it means on the ground

The University doesn’t dispute any of this. Its own design standards say so plainly — it describes itself as a State of Michigan constitutional corporation with a great deal of regulatory autonomy, and states that it is exempt from local building and zoning ordinances.³

Michigan State University’s own planning guidance lists the same thing in its catalogue of limits on local zoning authority: certain public colleges and universities are not subject to it.⁴

Practically, for this project, that means no site plan review, no public hearing before the planning commission, no conditions attached, no variance process, and no vote by anyone Ypsilanti Township elected. Any other developer proposing a 100 megawatt industrial facility here would face all of it.

To its credit, the University says it voluntarily builds to established codes and standards in place of the local ordinances it doesn’t have to follow.³ That’s better than nothing. It’s also entirely at its own discretion, and nobody here can enforce it.

What the exemption does NOT cover

This matters, and it’s where the practical opportunities are.

Constitutional autonomy is about local control. It doesn’t exempt the University from state regulation that clearly applies to it, and it doesn’t exempt it from federal law at all. So:

EGLE still regulates it. Air permits for the backup generators, stormwater, wetlands, and the environmental filings on the land — the Baseline Environmental Assessments came from EGLE, not from the University.
The Public Service Commission regulates the grid connection. That’s why House Bill 6251 is drafted to attach to a PSC certificate rather than a local permit — it reaches a facility the zoning exemption protects.
YCUA decides about water and sewer. A municipal utility isn’t obliged to extend service, which is why its twelve-month moratorium has teeth that a zoning ordinance wouldn’t.
FOIA still applies. The University is a public body. Every confidentiality agreement we’ve obtained that addresses the question says so explicitly.
The Regents are elected statewide, to eight-year terms. They are the only part of this structure directly accountable to voters — including voters in Ypsilanti Township.

Article VIII also requires the Regents to account annually for income and expenditures, and requires their formal sessions to be open to the public.⁵

Part two: the property tax exemption

Different rule, different book, much simpler idea.

This one isn’t about autonomy at all. It’s about the state not taxing itself.

The General Property Tax Act of 1893, at MCL 211.7l, says public property belonging to the state is exempt from taxation under the act.⁶ The University of Michigan is a state institution. Its land is state land. State land isn’t taxed by local units.

Michigan courts settled this a long time ago. An 1890 case held that University of Michigan property was exempt as state property, reasoning that public property belonging to the state includes the property of all public departments of the state.⁷

There’s nothing unusual or sneaky about it. The same principle means your township doesn’t send a tax bill to the state police post or the public school.

What that costs here

Roughly 138 acres have come off the tax rolls across two purchases — about 20 acres in November 2024 and 118.474 acres in March 2026.⁸

And the comparison that matters isn’t to empty farmland. It’s to what would happen if a private company built the same facility.

Michigan already exempts qualifying commercial data centers from personal property tax on their equipment. But a private operator still pays real property tax on the land and buildings, and that money reaches local schools, roads, police and fire. A billion-dollar building generates a substantial assessment.

The University pays neither. And the services still get used — roads during construction, emergency response for a site with high-voltage equipment and substantial fuel storage, water and sewer capacity.

This is the thing I’d most want people to understand. On the tax question specifically, this community would be measurably better off with a private data center than with a university one. That’s an uncomfortable sentence and it’s true.

A procedural detail worth checking

The statute has a condition most people don’t know about. For land acquired after July 19, 1966, the exemption does not apply unless a deed or memorandum of conveyance is recorded in the county before December 31 of the year of acquisition, or the local assessing officer is notified by registered mail before that date.⁶

I have no reason to think that wasn’t done here — recording a deed promptly is routine. But it is a real statutory requirement with a real deadline, and it is checkable at the Washtenaw County Register of Deeds for both purchases. If anyone wants a concrete task, that’s one.

Put the two together

Separately, each rule is defensible. Together, in this specific case, they produce something I don’t think anyone designed.

A township gets a 100 megawatt industrial facility it cannot zone, from an institution it cannot tax, built on land that left the rolls without a public hearing — and roughly 90% of the computing capacity belongs to a federal national security laboratory, not to the university whose autonomy is the reason none of the local rules apply.⁹

Article VIII, Section 5 protects general supervision of the university’s institution. Whether that phrase stretches to cover a facility that is overwhelmingly a federal laboratory, operating under a long-term lease, running nuclear stockpile simulation, has never been tested in a Michigan court.

I’m not a lawyer and I’m not predicting how that would come out. I think it’s a fair question, and I think it’s strange that a rule everyone is relying on so heavily has never been examined on these facts.

What could actually change this

A constitutional amendment. That’s the only way to change the zoning exemption itself, and it’s a long road — two-thirds of both chambers to reach the ballot, then a majority of voters statewide. House Bill 6121 would require the Regents to follow local zoning, but only for land acquired on or after January 1, 2027, and only if a joint resolution amends the constitution first. It would not reach this project. Every acre here was bought before that date.

A payment in lieu of taxes. Tax-exempt universities elsewhere settled this argument decades ago and make substantial annual payments to their host cities. Nothing of the kind has been offered here. It requires no legislation — just a decision.

A binding community benefits agreement. The zoning exemption means the Township can’t impose conditions. It doesn’t stop the University from agreeing to them voluntarily, in a contract enforceable in court. Everything the project has promised — the natural land, the water commitments, the noise levels — could be written down and made binding tomorrow.

State-level regulation that bypasses local permitting. The bills that reach this facility are the ones attaching to the Public Service Commission or EGLE rather than to a building permit. That’s a drafting choice, and it’s the one worth pressing legislators on.

And the Regents themselves. They hold the authority. They stand for election statewide. Their meetings are constitutionally required to be open, and they take public comment.

Nothing in either exemption prevents the University from choosing to be a good neighbour. It just means nobody here can make it.

Sources

Michigan Constitution of 1963, Article VIII, Section 5. legislature.mi.gov
Michigan Association of State Universities, on the origins of constitutional autonomy and its grant to the University of Michigan in 1850. masu.org · Testimony to the Michigan House on constitutional autonomy. house.mi.gov
University of Michigan Architecture, Engineering and Construction, Special Instructions to Designers: Codes and Regulatory Agencies, March 2026. PDF
Michigan State University Extension Land Use Series, Restrictions on Zoning Authority. PDF
Michigan Constitution of 1963, Article VIII, Section 4 — annual accounting and public sessions of governing boards.
The General Property Tax Act, 1893 PA 206, MCL 211.7l — state property. legislature.mi.gov
University of Michigan Law School, The University and Local Government: Zoning and Property Taxes, discussing the 1890 decision holding University property exempt as state property. repository.law.umich.edu
Acreage and acquisition dates from the Baseline Environmental Assessments filed with EGLE and the Regents’ authorizations; see our timeline.
MEDC memorandum to the Michigan Strategic Fund Board, December 10, 2024 — 100 MW for Los Alamos and a separate 10 MW academic center. Board packet (PDF) · confirmed aloud at the September 9 town hall; see what they said, and what the record shows.

I’m a resident reading public documents, not a lawyer, and nothing here is legal advice. The constitutional and statutory texts are linked above so you can read them yourself. If I’ve got something wrong, tell me and I’ll fix it and say that I did.