K.L. Cool, director of the Michigan Department of Natural Resources Director, had already accepted a proposal consolidating state and private properties on South Fox Island, located 30 miles off the coast here.
The NRC previously had endorsed the exchange, which consolidates state land holdings in the northern end of the island and provides contiguous property lines for the island's only private landowner.
"This is a smaller exchange than we previously considered, but it better enables us to meet the department's management objectives for the island," Cool has said.
Cool says in a letter to Granholm that the Attorney General's opinion opened new and more rigorous requirements for selling or trading public and private land.
"We respectfully request clarification on why you have imposed a new, higher standard and whether it would additionally be applicable to all pending and future real estate transactions between citizens, or corporations, and the DNR," Cool wrote.
State law requires the DNR to exchange public land only for private land with cleartitle, Schneider says.
Granholm directed Cool to request the seller to obtain a final judgment from a court of appropriate jurisdiction, which removes the clouds on the title.
The Grand Traverse Band of Ottawa and Chippewa Indians has a claim on some of the land.
Neighboring North Fox Island in Lake Michigan has been donated to the state by developer David V. Johnson, chairman of Victor International of Detroit. Johnson purchased the island from commercial developers seven years ago. The 836-acre North Fox is valued at $15 million.
The state will pay only $2.2 million from a land grant trust for Johnson's legal and closing expenses, making the donation worth nearly $13 million.
The island includes a 180-foot-high dune formation, a stone and sand beach, as well as five miles of Lake Michigan shoreline.
Johnson is working with the state and federal agencies to consolidate his holdings on the larger South Fox Island into the lower portion of the island.
Since Johnson already owns two-thirds of the 1,200-acre island, the state and the developer wanted to make the land contiguous.
With the consolidation, Johnson will also acquire 115 miles at the southern tip of South Fox, including a boat harbor.
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