"Michigan federal district court upheld the inclusion of churches in a local government's grant program for brick-and-mortar projects"

From Religion Clause blog:

In an important Establishment Clause decision yesterday-- apparently a case of first impression-- a Michigan federal district court upheld the inclusion of churches in a local government's grant program for brick-and-mortar projects. American Atheists, Inc. v. City of Detroit Dowtown Development Authority, (ED MI, Aug. 8, 2007), involved a challenge to a Facade Improvement Plan (FIP) designed to enhance the appearance of a portion of the city of Detroit in anticipation of the 2005 Major League Baseball All-Star Game and the 2006 NFL SuperBowl. Under the program, approved applicants could receive up to 50% of the cost of improvements to building facades and parking lots-- with specified upper limits on reimbursements. Among the projects funded were nine by churches.

Focusing particularly on the Supreme Court's 2000 decision in Mitchell v. Helms, the court held the fact that churches are pervasively sectarian institutions does not automatically disqualify them from participating in an otherwise permissible aid program. It also held the fact that funds are granted directly to churches does not invalidate the FIP so long as the program does not discriminate on the basis of religious sect and so long as the reimbursements do not amount to government endorsement of a church's message. The grants are not forbidden just because they may free up funds for religious purposes that the churches would otherwise have used for building repairs.

Applying these criteria, the court upheld grants for most of the church repair projects, but found that aid to three projects was unconstitutional because it would be perceived as government support for the advancement of religion. The prohibited projects were repair of two stained glass windows displaying religious images and projects involving monolithic signs that "identify and solicit the churches as sites of Christian worship".

The decision is covered today by the Detroit News and in an Alliance Defense Fund release yesterday.