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An owner of property abutting a street, alley, or other public right-of-way has a reversionary interest to the center of the street or alley. 2000 Baum Family Trust v Babel, 488 Mich 136, 152 (2010). When a street or alley is vacated, it reverts to the abutting owner or owners. Id. at 155; MCL 560.227a. An alley dedicated in the plat is subject to a similar legal principle, except in certain circumstances an easement is created to the benefit of other owners in the plat for purposes of ingress and egress. Unless the private easement has also been extinguished or vacated, this legal interest would continue to encumber the area within the vacated alley. Since an owner of property abutting a vacated alley would hold title to the center of the alley, the boundary lines of the property would move to the center of the alley. The setback distances would remain the same, but those distances would now be measured from the center of the vacated alley, effectively providing greater space for the construction of improvements on the lot. To the extent that the area within the vacated alley continues to contain an easement to the benefit of others in a plat or similar situation, improvements are not likely permitted within the area covered by the easement as it would prohibit the reasonable use by others.
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