The Michigan Supreme Court explicitly overruled the Poletown decision in
County of Wayne v.
Hathcock, 684 N.W. 2d 765 (Mich. 2004).
As Prof. Dukeminier
et al. describe the holding in
Hathcock, the Michigan Supreme Court relied heavily on the
Poletown dissent and "held that transfer of condemned land to private parties is appropriate as a public use [under the Michigan state constitution] only where 'public necessity of the extreme sort' requires eminent domain to assemble land on behalf of enterprises generating public benefits (for example, rights of way, railroads, and highways...); or where the condemned property 'remains subject to public oversight after transfer' (for example, the property is transferred to a regulated public utility...); or where the property is taken not in the interests of private parties to whom it is transferred, but rather because of 'facts of independent public significance' (for example, to clear blighted land)."
It is important to recognize that the U.S. Constitution establishes only the floor of protection against non-public use takings (as well as other property rights). State constitutions also contain provisions protecting property owners against takings and these may provide more protection than does the U.S. constitution. There has also been a great deal of post-Kelo legislation enacted by state legislatures providing at least some additional protection.
For an article on the "backlash" against Kelo, see Ilya Somin, The Limits of Backlash: Assessing the Political Response to
Kelo (
link) I am not assigning this article, merely mentioning it for those who wish to dig deeper.