Discuss Detroit » Archives - Beginning July 2006 » Proposal 4 « Previous Next »
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Jeduncan
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Username: Jeduncan

Post Number: 6
Registered: 11-2006
Posted on Wednesday, November 22, 2006 - 2:55 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

This is sort of an offshoot to another thread on Detroit's economic funk...

What are your thoughts of Proposal 4?

In my Urban Planning classes we've been discussing it, and all of my professors suggest that the passing of proposal 4 is going to be a giant speedbump in the progress/revitalization of detroit proper...

Back taxes and stuff make it really difficult, not to mention unreasonably expensive for developers, businesses and private citizens alike to move to detroit... sort of poses somewhat of a disincentive to relocate there.

What are your thoughts on this?
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Mcp001
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Username: Mcp001

Post Number: 2330
Registered: 11-2003
Posted on Wednesday, November 22, 2006 - 7:29 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Why should it be a "speedbump"?

Reinforcing the concept of property rights is an asset, rather than a liability to those already living within a city.

I was glad to see that most of the state felt the same as I.

Why should a longtime property homeowner lose their own home just because some investor, who most likely never lived in that area to begin with, can pump a few more schekles into the public coffers?

There already is a mechanism for those who wish to develop, it's called the free market.

If they want a particular piece of property, then they should be willing to pay the price that the owner is willing to sell it for. Not have it taken away from them for a pittance because of a court order!
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Charlottepaul
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Username: Charlottepaul

Post Number: 54
Registered: 10-2006
Posted on Wednesday, November 22, 2006 - 8:28 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Proposal 4 is a problem for those already living in Detroit. The broke city is going to have to front the extra money (another 25% on top) which will cause taxes to rise for city residents, or any given city for that matter. Why should the price be 125% of the free market? It isn't the free market then.
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Barnesfoto
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Username: Barnesfoto

Post Number: 2773
Registered: 10-2003
Posted on Wednesday, November 22, 2006 - 8:52 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I suspect that people felt that the ED laws had been abused...I certainly did.
I was skeptical when the city bulldozed most of Poletown for what is mostly a parking lot. But Coleman Young said that the neighborhood had to be sacrificed for jobs.
But 8 or so years ago, when I saw a whole neighborhood of mostly well kept older homes (and a few blighted ones) bulldozed after the owners were forced to sell, I was disgusted. Greyhaven, I think that's what they call the new subdivision of suburban style homes just south of East Jefferson.
Apparently, the developers had so little imagination that they were unwilling to integrate new homes with old. Or maybe they were just greedy bastards with a winner take all philosophy.
At any rate, there were abuses of power, and the voters responded appropriately.
The city owns a huge inventory of property, enough to keep them busy for a while. Let them develop what they have first.
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Thejesus
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Username: Thejesus

Post Number: 360
Registered: 06-2006
Posted on Wednesday, November 22, 2006 - 8:55 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

There is a good article about why Prop 4 is bad for Detroit in the current edition of The Advocate, which is the WSU Law School newsletter...

It was actually printed before election day but reprinted again in the current edition...

It's on page 7 and titled "The Consequences of Proposal 4" by Professor John Mogk

http://www.law.wayne.edu/organ ization/sbg/pdf/Advocate_Law%2 0&%20Detroit%20Edition%2011200 6.pdf
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Yvette248
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Username: Yvette248

Post Number: 177
Registered: 10-2006
Posted on Wednesday, November 22, 2006 - 9:36 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I'm all for development and there are too many instances when greedy landowners prevent projects from going forward (specifically downtown) because of high asking prices. While I agree that there should be exemptions for occupied and well kept properties, especially homes, it would be hard to write legislation for that.
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Magnasco
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Username: Magnasco

Post Number: 170
Registered: 10-2003
Posted on Wednesday, November 22, 2006 - 9:54 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Oh My! The Advocate is on line! Now I will have something to read at work today. Just like being in class in Law School.

Great article. Thanks Thejesus.
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Fortress_warren
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Username: Fortress_warren

Post Number: 232
Registered: 10-2006
Posted on Wednesday, November 22, 2006 - 10:37 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

The article states 1/3 of Detroit is vacant land, is that true? Do the owners pay taxes on the land, most or many of them? Seems the city could become the owner based on back taxes, put together blocks of land, and sell that. And if you get the lonely Trump Casino holdout, she wouldn't sell at any price, build around them. Like Trump did. Her house is in the middle of a parking lot if remember correctly.
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Itsjeff
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Username: Itsjeff

Post Number: 7147
Registered: 10-2003
Posted on Wednesday, November 22, 2006 - 10:51 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

The passing of Proposal 4 is a huge set back for fully urbanized communities like Detroit. There are some very important points here....

Everyone seems to be concentrated on the 125% clause. That is a complete red herring that was tossed in by the bill sponsors. On a practical level, almost all low and middle income folks receive 200% to 300% of their HOME value through existing laws. State law requires that a person be paid their fair market value OR the replacement cost of their home, which ever is greater. So if a person owns a 3 bedroom 1 - 1/2 bath home, they do not get "fair market value" but a sum enough for them to buy a similar home in terms of size and amenities.

In the case of a condemnation case like the I-94 Industrial Park, the typical value of the homes folks were living in was about $35,000. In order to provide adequate, code compliant housing, most folks in this area received anywhere from $100,000 to $150,000 for the purchase of a new home. Because of a "do no harm" clause in the state legislation, their taxes on the homes were abated so they would not incur massive new tax burdens. Additionally, all their moving and relocation costs were covered under the "do no harm" clauses....Lessee, you get 3-5 X the value for your home, get to move to a much higher quality and value home for free (INSTANT EQUITY!), a better neighborhood AND the city covers all you moving costs.

The real damage from the bill comes from the prohibition of using eminent domain for economic development purposes. Here's a classic example. The board is constantly full of bitching and moaning about the proposed Motown Music Center Site and the vacant land in the proposed Villages of Woodward site. The City and Motown have been diligently trying to acquire the checkerboard ownership land there through means other than eminent domain to complete the projects. Neither Motown nor the City can afford the $1 million plus price tags that speculators have put on their 30 x 90 lots. That is $370 per foot for vacant land. To put that in perspective, the fancy penthouses at the Book Cadillac are being sold for $310 per foot. That would make a fancy 2,000 square foot loft at Villages of Woodward $1.3 million. Not going to happen. By the way, all these little vacant lots are not owned by poor little old grandma ladies that would be brutally evicted from their homes. The large majority of these little lots are owned by millionaire speculators whose addresses are in Bloomfield Hills, Troy, Birmingham etc.

By not being able to condemn the land now for eminent domain, the City must now build around the land and have half assed developments that don't maximize the value of city owned parcels and bring in far less taxes than they have the potential to. And who is harmed by this? Is it the millionaire in Bloomfield or is it the landowners in Detroit who are now stuck in neighborhoods with vacant lots dragging down their values, forcing them to live in neighborhoods falling apart because every year their house is worth a little bit less than the year before?

The I-94 Industrial Park, the Thyssen Krupp plant, Jefferson Village and the Shops at Jefferson Village are all examples of projects that City can no longer do. They have been outlawed.

We threw the baby out with the bathwater.

In the past two elections we have told gays and minorities to fuck off and placed rules on the books that guarantee the increase of the rate of sprawl while slowing the revitalization of cities like Detroit, Flint, Saginaw and Jackson.

The voters of Michigan need an ass-kicking.
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Corktownmark
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Username: Corktownmark

Post Number: 227
Registered: 12-2004
Posted on Wednesday, November 22, 2006 - 11:14 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

^^^^
They just got one form you ItsJeff right on! The basic premise of earlier posts have all wrong assumptions about who is really impacted and how each type of property owner is effected. Home owners are pretty well protected in the current system. The new law goes a long way to protect speculators without offering any material help to real Detroit home owners.
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3rdworldcity
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Username: 3rdworldcity

Post Number: 349
Registered: 01-2005
Posted on Wednesday, November 22, 2006 - 1:13 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Thejesus: Thanks for posting the Advocate, including the opinion piece by John Mogk.

Mogk has nothing new to say in it and just regurgitated the same weak and unpersuasive diatribes he's spouted for years. To his credit, Mogk has spearheaded a couple of significant redevelopment projects in Detroit years ago, but as I recall he did not have to resort to eminent domain abuse to do it. Maybe I'm wrong on that.

Mogk's problem is that he has never had any real world experience in the conventional (unsubsidized) real estate development world. People do and always have put large, complicated deals together w/o eminent domain. I once worked on an oil lease deal for three years to get 43 signatures of members of a scattered extended family on a lease; it took persistance and a certain amount of skill. I was also involved several years ago in acquiring the land under a Southfield subdivision where we had a mass closing of the acquisition of 93 homesites; every homeowner sold out and a 450 unit apartment complex was build on the site. The developer was persuasive, and fair, and paid whatever it took to get the deal done. And, he made a ton of money on the deal. Doing it the right way is the norm. Eminent domain is the crutch used by greedy developers and incompetent municipalities to screw the poor and unsophisticated out of their real estate, usually their homes. You never see rich people pushed out by eminent domain.

Itsjeff, I've never seen such B.S. That's not how Detroit works. Your depiction of what happened in the incident you described is nonsense. Never happened. What did and does happen is that the City first starts w/holding/diminishing city services to an area it wants to condemn. It persists in inverse condemnation activities and starts picking up parcels from people who have no real recourse, at below market prices (or, at "market" prices which have been decimated by the city's conduct.) Then it starts the actual quick take condemnation process after lowballing the remaining property owners with the statutorily mandated "good faith" offer to purchase. Rarely do property have the knowledge or wherewithal to fight. Virtually all condemnation lawyers work on a contingent fee basis and it's a very specialized area of the law. The upside for a lawyer in those cases is usually so small that none will take those kinds of cases.

The City has screwed people for years. The people spoke on prop. 4 because they could not take the chance the next MI Su. Ct. will be stocked w/ nitwit judges like the ones who decided Poletown. Hurray for the smart people of Detroit and Michigan who promoted and passed Prop 4. My support money was well spent.

The leading opponent of eminent domain abuse is The Institure For Justice, a Washington, D.C. public interest, libertarian law firm. Anyone interested in the real story of eminent domain abuse can go to its website, www.ij.org.
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Eastsidedog
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Username: Eastsidedog

Post Number: 846
Registered: 03-2006
Posted on Wednesday, November 22, 2006 - 1:30 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Itsjeff, what do you think of Riverview Hospital's extra big parking lot for their new office complex? I'm sure eminent domain was used to demo the last houses on Sheridan. It seems to me that they might have built a parking structure if they couldn't demo those houses so easily.

I remember seeing the last homeowner on Sheridan holding out. The old lady flew her American flag on the porch until the bitter end.

(Message edited by eastsidedog on November 22, 2006)
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Barnesfoto
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Username: Barnesfoto

Post Number: 2783
Registered: 10-2003
Posted on Wednesday, November 22, 2006 - 1:40 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

both sides make valid points, but I live in a part of town where few large city-funded public projects have been completed, yet we lead the city in population growth.
The city did help the Casino folks acquire land, and lots of homes were demolished for parking lots or grassy berms. That's enough big-ticket projects for me. I don't care for the Casinos, but there are some jobs there that were not available before.
Somehow, some of the most impressive development has been by individuals, (like the Slow's crew), immigrants and small non-profits like Bagley Housing, Greater Corktown, SWDBA and Southwest Solutions.
Meanwhile, the city government is still hugely dysfunctional. I've been waiting for months for the city to sell my partners and I a city-owned building, and if the city ever gets us the paperwork and accepts the money we want to spend, it will likely be a year or more before we get the deed.
If the law stalls a few big ticket projects, well, it won't be the first time that Detroiters have made bad decisions at the polls, but maybe we should cultivate more small projects, and enforce a few more building codes, including the codes on property owned by speculators.
If the law turns out to be so terrible, it can be amended again.
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Gistok
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Username: Gistok

Post Number: 3127
Registered: 08-2004
Posted on Wednesday, November 22, 2006 - 1:53 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

In St. Clair Shores St. John Hospital built a medical campus on 12 Mile Rd. between Little Mack and Harper. They were unable to acquire every parcel of land, because there was a man who owned a 1 story duplex directly on 12 Mile Rd. who was asking an exorbitant amount for his duplex. So St. John built around him, with the medical building situated at the back of the property, and a sea of parking along 12 Mile Rd. completely surrounding his house.

Well the guy went off the deep end and started putting up a bunch of American flags all over his property, and signs proclaiming his property rights. St. John ignored him and his little property and went about their business.

He was bitching up a storm at council meeting as to how the city could let this happen (seems like no one wanted to rent a duplex surrounded by that "sea of parking"). They told him to either sell or to shut up.

This went on for a few years, and then one day the house was gone.
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Itsjeff
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Username: Itsjeff

Post Number: 7148
Registered: 10-2003
Posted on Wednesday, November 22, 2006 - 3:54 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Eastsidedog:
The St. John Riverview Hospital parking lot was not an eminent domain condemnation case.

3WC:
Your authoritarian "Thats not what happened" is not much more than the Wizard of Oz telling people to pay no attention to the man behind the screen. Unfortunately, it IS exactly how it went down for dozens of home owners in those areas. They left their homes much, much better off than they were before. In fact there were several residents in the I-94 project area that were petitioning City Council to have the City process move FASTER because they couldn't wait for their payout.

You also put the cart before the horse and insinuate that the City of Detroit has deliberately picked certain areas of the city to cut services in a disproportionate amount in relationship to other areas to drive values down in a back door 30 year in inverse condemnation. This is a preposterous allegation at best. The length of time and concerted political will needed to do this across mayoral administrations and multiple councils, prolonged loss of tax base and high of exposure to speculation makes the DELIBERATE covert 30 year condemnation by neglect one of the most ridiculous urban legends ranking right up there with alligators in the sewer and the lion that killed half of the Cambodian Midget Wrestling Association. Services across the board in ALL areas were cut as a response to the dwindling tax base, which of course reinforces the flight of investment from the City. You're smarter than that, to repeat the BS deliberate covert condemnation claim...then again, maybe you just have an irrational bug up yer butt that blinds you so much, you are willing to make ridiculous statements. It holds as much water as your statement that there are not land owners in the CBD that buy buildings for purely speculative reasons and then proceed to not maintain them in the best shape possible. Sorry, as a long time resident and homeowner in Detroit, your theory is complete BS.

You also like to compare apples to oranges. 93 occupied homesites in Southfield that have a resale value that allows a generous offer is very different from 800 largely vacant parcels with scattered ownership with speculators sitting in the middle. I wonder what the final pay outs were to those 93 residents compared to what they would have been to some others. I would assume that confidentiality agreements kept those transactions allowing unscrupulous developers to use strong arm tactics like...I can see the cigar chomping hard hat wearing developer now, screaming at a little old widow lady..."Fine, don't sell me the land at this price...your neighbors did already, they were the smart ones...(sorry, I can't let you see the transaction, confidentiality agreement you know) .... I'll just build the entry to the parking lot for 900 cars right next to your rose bed you stupid old lady!"

At least with condemnation cases, there is a clear and public record, unlike with a "private developer". Perhaps that is why you favor no eminent domain as then you can hide such tactics unlike in an eminent domain case....caveat venditor?

I think I am also safe in assuming three years and 43 signatures had something to do with the likely very high payout from an oil rights case.


Barnesfoto:
Its not a statue. Its a constitutional amendment. So far, to my knowledge, a constitutional amendment in Michigan has never been repealed. We are pretty much stuck with this forever. Please tell the eastside residents that now have decent, affordable and safe retail at the Shops at Jefferson Village that you think its perfectly fine if the project never got built. Tell the families living in Jefferson Village you think it is perfectly fine that their project never would have been built and they would have bought their homes in Brownstown Township instead. Tell the 1,000s of employees at Thyssen Krupp you think its perfectly fine that they never would have had jobs.
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Barnesfoto
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Username: Barnesfoto

Post Number: 2789
Registered: 10-2003
Posted on Wednesday, November 22, 2006 - 4:45 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

ok jeff, but you are forgetting that lots of people lived in well kept older homes in the area south of Jefferson, and that many of those folks wanted to stay in their homes. These people had stayed in the city through some difficult times, and I'm guessing had some emotional attachments to their homes and their neighbors. With all the vacant land in the city, how is it that they had to give up their homes so that sterile new sterling-heights like subdivisions could go up?
That my friend, was a gross abuse, and stack up a few abuses and you'll find people voting for a change in eminent domain laws, whether they be ultimately good or bad for society as a whole.
One of the charms of a city is older architecture; that's one of the reasons people like Indian Village and Woodbridge.
On my side of town, new housing is going up amidst the old. That way, nobody who has lived here for decades has to be forced out for someone who just decided that it's stylish to live near the river.
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Itsjeff
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Username: Itsjeff

Post Number: 7149
Registered: 10-2003
Posted on Wednesday, November 22, 2006 - 5:47 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Barnes, shoot me an e-mail, please.
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Erikd
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Username: Erikd

Post Number: 765
Registered: 10-2003
Posted on Wednesday, November 22, 2006 - 11:39 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Itsjeff makes a great point about the value of eminent domain as a tool to overcome the problems caused by land speculators.

However, eminent domain is just a band-aid fix, not a real solution.

The real problem is Prop A, and the only real solution is an amendment.

The limitation on annual property tax increases should not apply to ALL property in Michigan, as it does now.

This property tax control was sold to Michigan voters as a way to prevent people from getting taxed out of their homes due to rising property values, and it should be amended to reflect the original intention.

An amendment restricting Prop A property tax controls to just one primary residence, and not investment properties, would still give property tax protection to Michigan homeowners, and limit the need for eminent domain to acquire land for new development.
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3rdworldcity
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Username: 3rdworldcity

Post Number: 350
Registered: 01-2005
Posted on Saturday, November 25, 2006 - 2:03 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Barnesfoto: The casino operators selected their own sites and acquired their own land w/o the use of eminent domain.

When that nitwit Archer selected the original three casino sites he proposed that they be acquired by the use (abuse) of eminent domain. The landowners there were sophisticated and would have fought the quick take "public use" issue to the MI, and eventually the U.S Su. Cts. The casinos would have acquired the land w/ the threat of losing it hanging over their heads. The casinos did not want those sites to begin with.

Then Archer selected the riverfront as the sites. The casino's were against that area as well and had imposed a $250,000,000 land acquisition and development budget (what the casinos would pay) on the city, and the city would have had to pay any excess. [$250,000,000 was less than the value of Steve Wynn's art collection of display at the Bellagio.] The city nevertheless started the condemnation process but the Court eventually threw out the lawsuit. The City had failed to comply w/ the most basic statutory condition precedent, namely, to make bona fide offers to buy the properties prior to commencement of the condemnation case. What a bunch of Keystone Cops idiots they are.

The casinos eventually told Archer they'd select their own sites and buy the land themselves, notwithstanding the prohibition in the development agreements to the contrary. Which, is what they did. And at a fraction of the cost had the city done it w/ eminent domain.

Itsjeff: I don't know who you are, or care, or your background and who you work for. My bet: the City. I'll deal w/ your rediculous comments when I return to Detroit. (Ever hear of the Graimark case?)
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Itsjeff
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Username: Itsjeff

Post Number: 7153
Registered: 10-2003
Posted on Saturday, November 25, 2006 - 4:02 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Itsjeff: I don't know who you are, or care, or your background and who you work for. My bet: the City.

Uh, in another thread you posted that I had no idea what it was like working in downtown real estate and that I couldn't begin to understand how incredibly difficult your job as a landlord is. (Which is probably true, the way you do it.) Now you've pegged me working for the city.

I'm not personally involved in real estate. Just a guy who reads the papers, have friends who work for developers and family in commercial leasing. That's how I was able to call you out on your previous mis-statements and stand ready to do so again.

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