The alley has to be worked on because of the CSO construction and for steamline renovation. So during the period when there are 20 foot trenches in the alley, the dumpsters have to be placed on the street. The BWL is also working on the steamlines and burying all the power lines currently hanging all over the place in the alley (allowing building owners to potentially fix up their rear facades).
After the construction, they are limiting the number of dumpsters to make the alley more attractive. If you've ever walked by the Allegan Beaners in July, you will understand why this is VERY necessary. The odor is awful.
As for whether or not this is legal - the alley is public right of way. Lansing could pass an ordinance restricting any and all dumpsters. That the city is paying to cap meters during a required construction period seems pretty nice. Not to sound defensive, but many cities would say, "Your trash is your problem."
Did anyone see the news about Hollister Building today? Basically they said Boji is going to do something with the building and details will come. Nothing new.