Four Lakes Task Force Assessments Lawsuit: Rulings and Costs

The Four Lakes Task Force assessments lawsuit ended on April 11, 2025, when the Michigan Supreme Court declined to hear the Heron Cove Association’s appeal, leaving in place the special assessments that fund the reconstruction of the Secord, Smallwood, Edenville, and Sanford dams in Midland and Gladwin counties. Property owners in the assessment district lost at every level: Midland Circuit Court, the Michigan Court of Appeals, the U.S. District Court for the Eastern District of Michigan, and finally the state Supreme Court. The 40-year capital assessments and the shorter operations-and-maintenance charges remain in force, and construction on the dams has resumed.¹²

What the Upheld Assessments Cost Property Owners

The assessment district covers roughly 8,170 waterfront and backlot parcels along the four lakes.³ Owners inside that district face two separate charges. Operations and maintenance assessments run $80 to $300 per property per year from December 2025 through December 2029. Capital assessments, which pay for design and construction, run $450 to $1,800 per property per year for 40 years, from December 2025 through December 2065.⁴

Assessments are not tied to property value. They are calculated using a set of benefit factors: a base factor with waterfront parcels at the top, a derived-benefit factor keyed to property type, and multipliers for lake frontage, water view, and water depth.⁴ Total capital assessments across the district are projected at $217.7 million over the 40-year term.² A $200 million state grant reduced what property owners were responsible for by an estimated 50 to 60 percent from the initial $400 million estimate.

The Four Lakes Task Force board approved the assessment rolls after a January 15, 2024 public hearing, and the Midland and Gladwin county boards of commissioners unanimously ratified them on February 6, 2024.⁵

Who Sued and What They Argued

The Heron Cove Association, based in Billings Township near Wixom Lake, formed in early 2024 to fight the assessments. Membership was reported at hundreds of property owners, with some accounts putting it above 800.⁶ Co-organizer and president Jan Colton argued the charges were disproportionate to property values, pointing to unbuildable parcels valued at $5,000 on the tax rolls that were being assessed $33,000.⁷

On February 20, 2024, the association filed an administrative appeal in Midland Circuit Court. Through its attorney Laura Genovich of Foster Swift Collins & Smith, it argued that the assessments bore no reasonable relationship to any increase in market value, that construction had begun before the rolls were formally approved in violation of state law, that the assessments amounted to an unconstitutional taking without due process or just compensation, and that the statutory hearing process gave property owners too little time and no full evidentiary hearing.⁸

A month later, on March 21, 2024, the association opened a second front, filing constitutional and inverse condemnation suits in both Midland and Gladwin County circuit courts. Those cases were removed to federal court in June 2024.⁶⁹

How the Courts Ruled

Midland Circuit Court

After oral arguments on May 29, 2024, Judge Michael Beale of the 42nd Circuit Court denied the appeal in a written ruling on June 20, 2024, confirming the assessment rolls. He found the association had “failed to carry their burden” of rebutting the presumption of validity that attaches to municipal special assessments under Michigan law and that it had not presented credible evidence that the assessments were disproportionate. He also observed that lakefront property maintains a higher value than comparable property without lake access.¹⁰¹¹

Michigan Court of Appeals

The association appealed on July 11, 2024. After oral arguments on December 11, 2024, a three-judge panel of Judges Stephen L. Borrello, Allie Greenleaf Maldonado, and Randy J. Wallace issued a per curiam opinion on January 6, 2025, unanimously affirming the lower court.⁸

The panel held that challenging a special assessment in Michigan requires credible evidence of a “substantial or unreasonable disproportionality” between the assessment and the value the property gains from the improvements. The state-equalized-value data the association offered covered only 12 of the more than 800 parcels involved and measured changes over time rather than comparing what properties would be worth with the dam improvements versus without them. On the due process claims, the court held that the notice and public hearing procedures required by Part 307 of the Michigan Natural Resources and Environmental Protection Act satisfied constitutional requirements; the statute does not require a full judicial trial or comprehensive evidentiary hearing. Any dissatisfaction with the statutory framework, the panel said, was a matter for the Legislature.⁸

Federal Court

The federal cases, reassigned to Judge Matthew Leitman of the Eastern District of Michigan, ended on March 21, 2025, when Judge Leitman dismissed all of the association’s complaints in both consolidated matters. The association’s attorney, Michael Homier, said the ruling “preempts the role of the Michigan Supreme Court in providing the final word on state law issues.”⁹¹²

Michigan Supreme Court

The association filed an application for leave to appeal on February 15, 2025. The Four Lakes Task Force opposed the application and asked the court to expedite its review. On April 11, 2025, the Supreme Court denied the application, saying it was “not persuaded that the questions presented should be reviewed by this Court.” There were no noted dissents.¹

With the federal cases already dismissed, the state Supreme Court’s denial ended the legal challenge.²

What the Lawsuit Cost the Project

The litigation delayed the rebuild. Because the Four Lakes Task Force could not issue bonds while the assessment rolls were under active challenge, construction was suspended at all four dam sites on a rolling basis. Edenville stopped first in June 2024, followed by Smallwood in September 2024, Secord in October 2024, and Sanford in January 2025. Each site was brought to a “stable suspension point” meeting state safety requirements before work stopped.¹³

FLTF President Dave Kepler estimated the delays would add $10 million to $20 million to the total project cost.¹³ A separate blow came in September 2024, when the U.S. Army Corps of Engineers denied the FLTF a low-interest loan under the Corps Water Infrastructure Financing Program, ruling that program funds could not be used for dam repair, only removal. The task force had planned for that contingency and pivoted to tax-exempt municipal bonds.¹⁴

Where the Project Stands Now

Once the courts cleared the way, financing and construction resumed. The FLTF issued an $80 million bond in June 2025 at a 5.94 percent interest rate and a second bond of $80,285,000 in May 2026 at 5.73 percent, both on 40-year terms with an option to refinance after eight years.⁴ An additional $9.8 million state grant signed into the budget in October 2025 further reduced the amount to be assessed; Kepler said it would “directly reduce the financial burden on property owners” without increasing existing assessment levels.¹⁵

Sanford Dam reached substantial completion in February 2026 and refilled to its legal water level in May 2026.¹⁶ Smallwood is expected to be mostly done by July 2026, Secord by September 2026, and Edenville by September 2027, with overall project completion targeted for 2028.¹⁷

The FLTF reports that costs are tracking significantly under the $217.7 million not-to-exceed assessment ceiling. If total costs come in below that figure when construction ends, the task force has said it will refund the difference to property owners.¹⁸

1
Michigan Supreme Court. Heron Cove Association v. Midland County Board of Commissioners, No. 168165
2
WSGW. Michigan Supreme Court Denies Heron Cove Association Appeal on Four Lakes Special Assessment
3
Four Lakes Task Force. FLSAD Methodology
4
Four Lakes Task Force. Special Assessment District
5
Midland Daily News. Four Lakes Special Assessments Approved by Midland and Gladwin Counties
6
Midland Daily News. Heron Cove Association Files Lawsuit Against Counties
7
WNEM. “We Can’t Afford This”: Homeowners Challenge Four Lakes Special Assessment District
8
Michigan Court of Appeals. Heron Cove Association v. Midland County Board of Commissioners, No. 371649
9
Four Lakes Task Force. Summary Timeline of Legal Proceedings
10
WNEM. Midland County Judge Denies Appeal of Lake Special Tax Assessments
11
Four Lakes Task Force. Judge Beale Confirms Lake Level Special Assessments
12
MLive. Michigan Homeowners Face 40-Year Bill After Judge’s Ruling in Dam Repair Case
13
Midland Daily News. Four Lakes Task Force Suspends Construction
14
Four Lakes Task Force. U.S. Army Corps Denies Four Lakes Restoration Project Low-Interest Loan Request
15
Midland Daily News. Four Lakes Task Force Says $9.8M Will Offset Special Assessments
16
Four Lakes Task Force. Sanford Dam
17
WNEM. Four Lakes Task Force Provides Clearer Timeline for Lake Refilling
18
Four Lakes Task Force. Updates