Illinois’ eminent domain rollercoaster came to an end in 2002. A major lawsuit challenging the use of eminent domain to condemn private land for parking for a Gateway racetrack had been wending its way through the courts since 1999. On its way up, the case saw three reversals. The case concluded in April 2002 when the Illinois Supreme Court reversed itself and found that the taking was for private use and therefore unconstitutional. The decision reflects a growing awareness in courts that the power of eminent domain is being abused. While Illinois cities did condemn several businesses for private developers, other projects failed, and one was abandoned after the Illinois Supreme Court decision. Even the Governor expressed distrust of the use of quick-take powers for redevelopment. Local governments would do well to heed the signs and not waste taxpayer money trying to take property for other private parties.
After an Illinois Supreme Court decision sharply criticizing the Southwestern Illinois Development Authority,187 the Illinois Legislature failed to renew the agency’s quick-take authority in August 2002. The agency still hopes to regain its powers.188
Private Use Condemnations
The City of Aurora came up with a plan to pour $450 million of state and local public funds into the downtown RiverCity redevelopment project, which would include a convention center, a multi-purpose arena, and another of the ubiquitous new residential, retail and hotel developments. The City did not own the land, so of course it planned to condemn it. In July 2000, the City won approval from the state legislature for the use of quick-take condemnation powers. However, the plan met with resistance from Illinois Governor George Ryan, who opposed both the public largesse and the land-taking procedures to be employed by Aurora. Gov. Ryan issued an amendatory veto to the quick take bill. In his veto message, Ryan declared that “quick-take authority can be an excellent tool,” but he added that the process should not “trample on the property rights of citizens and business owners.”189
Not surprisingly, once the Governor signaled his opposition to the use of public funds and condemnation powers to subsidize the RiverCity redevelopment scheme, the project fell apart. Public support for RiverCity eroded, and the sour economy called into question the viability of such a huge, risky redevelopment. Riverfront Partners, the private developer behind RiverCity, scoffed at the idea that the plan would have to be paid for primarily with private funds, and backed out of the plan.190 In November 2001, Aurora officials finally scuttled the RiverCity plan and went back to the drawing board.
Harriet and Sol Price owned a piece of property on a prime corner of Chicago’s North Side, on which they intended to build a four- or five story building to house a shoe store and residences. However, the City denied all of their building proposals, and instead condemned the land. The City wanted a two-story all-retail building instead of a four-story building with some residences. The City then transferred the land to another private developer.191
Des Plaines City leaders approved a redevelopment project to convert a “blighted” area of town into a multi-use retail and condominium development, anchored by a large grocery store. The Oehler Funeral Home, a longtime downtown business, stood in the way of the project, so in June 2001 the Des Plaines aldermen gave City attorneys a green light to start condemnation proceedings against the funeral home if negotiations for the site failed.192 The City began eminent domain proceedings against the funeral home in February 2002.193 While the condemnation case continued, the funeral home got permission to relocate within the city after being forced to reduce the planned size of its new facility.194
Walgreens wanted to open a new store in Des Plaines, but without the hassle of finding land and purchasing it from willing sellers. So Walgreens enlisted the help of the Des Plaines Board of Aldermen, which used its eminent domain powers to bully two businesses and one homeowner off their properties. Elmer’s Goodyear, a local service station, had operated in Des Plaines for 55 years. After the City threatened to condemn Elmer’s if it refused to sell out, the service station’s owner reached an agreement conveying title to the land to the City.195 In January 2002, the City authorized eminent domain to take the two other targeted properties, the Des Plaines Glass Co. and the home of Irene Angell.196 Ms. Angell, who was born in this same house over 80 years ago, ironically had met her late husband in a Walgreens store. Ms. Angell eventually settled with the City.
East St. Louis
In 1999, the Southwestern Illinois Development Authority (SWIDA) began the process of condemning 148 acres belonging to National City Environmental LLC and reselling the land to Gateway International Motorsports Corp. for a parking lot to accommodate visitors to large auto racing events. Gateway had previously tried to purchase the property, but National City did not want to sell its land, on which it planned to expand its scrap-metal and recycling business.197
So Gateway went to the offices of SWIDA. It picked up an application for SWIDA to use eminent domain and paid the $2,500 application fee for condemnation for “private use”—yes, that’s actually what the application said.198 SWIDA’s lawyers must have forgotten to tell the agency that property may be condemned only for “public use” under the U.S. and Illinois constitutions. For private condemnations, SWIDA requires the private beneficiary to reimburse SWIDA for the value of the condemned property and also charges an extra 6 to 10 percent of the property’s value—which amounts to a commission for using its power of eminent domain.199 For the Gateway condemnation, SWIDA would receive $56,500, which was more than the agency’s appropriated budget for that year.200 There was no pretext that the property was blighted. It was just property that Gateway wanted, that it was not able to buy, and that SWIDA intended to procure on its behalf for a substantial fee. The best SWIDA could do was claim that the condemnation served a public purpose because Gateway would generate tax revenue for the City through its racing events. So National City decided to mount a court challenge to the condemnation. The case went through a series of reversals. First, the trial court approved the condemnation, but the Illinois Appellate Court rejected it in stinging language.201 The Illinois Supreme Court then reversed again, 4-3, in sharply divided opinions.202 Only a few months later, the Illinois Supreme Court granted a rehearing in the case.203 Upon rehearing, the Court held exactly the opposite of its previous decision, finding that the condemnation was for a private use and was not authorized by law.204 The Institute for Justice filed an amicus brief at the Illinois Supreme Court in support of National City Environmental. Illinois Supreme Court Justice Rita B. Garman, writing for the majority, admonished that “[t]he power of eminent domain is to be exercised with restraint, not abandon.”205 The court acknowledged that the expansion of Gateway “could potentially trickle down and bring corresponding revenue increases to the region.” But, the court held, “revenue expansion alone does not justify an improper and unacceptable expansion of the eminent domain power.”206 The court concluded that the project “is a private venture designed to result not in a public use, but private profits.”207 The U.S. Supreme Court rejected SWIDA’s request for review.208 This landmark decision by the Illinois Court is not only a major victory for private property owners, but also demonstrates that courts are becoming increasingly critical of redevelopment schemes set up to line the pockets of wealthy developers at the expense of ordinary landowners.
East St. Louis
The Masjid Al-Muhajirum mosque, a nonprofit religious organization, bought several lots in East St. Louis to expand its temporary mosque and to develop a permanent place of worship for the local Muslim community. However, a group of private developers wanted the land to build Parsons Place, a multi-million dollar mixed-income residential complex they had been planning. When they could not persuade the mosque to sell its land to them, and before the mosque had a chance to take any action to implement its own plans, the developers turned once again to the Southwestern Illinois Development Authority (SWIDA), hoping that it would condemn the land in favor of their redevelopment project.
In March 1999, SWIDA authorized the use of eminent domain proceedings to take the mosque’s land, and soon after filed a quick-take proceeding. The mosque challenged the condemnation, arguing that the taking was not for public use. At trial, SWIDA admitted that the purpose of the condemnation was to transfer privately owned land to another private party, but asserted that a valid public use existed because the land was “blighted.” The trial court ruled in favor of the developers. On appeal, the Appellate Court of Illinois upheld the lower court ruling, and in January 2001 transferred the mosque’s land to the developers.209
In September 2002, the Elgin City Council voted to begin eminent domain proceedings against the Northern Illinois Coin Shop, a decades-old business that occupies part of a parcel that the City promised to Par Development Co., a private developer, for a six-story luxury condominium building. The $28 million Par project is a major part of Elgin’s River Park Place downtown revitalization project, which ironically includes a number of financial incentives aimed at encouraging small business owners to locate there.210 In December 2002, the local planning commission voted against proceeding with the Par project, but only because of opposition to the particulars of the $4 million incentive deal brokered by the City and the developer. The condemnation of the coin shop is not affected by the collapse of the Par deal; the City is still taking the property to make way for future private development.211
The Town of Swansea really wants a new “Town Center” adjacent to its Metrolink train station, so much so that it refuses to let longtime successful local businesses stand in the way of its dream. On December 18, 2001, the Swansea City Council authorized the Southwestern Illinois Development Authority (SWIDA) to use eminent domain to force five businesses out of the way of the $25 million project. One business quickly settled with the private developer, while the City later dropped plans to condemn two others.212 By February 2002, the Swansea Moose Lodge and 84 Lumber Co. were the only two properties still at issue.
In place of the apparently undesirable 84 Lumber Co., a hardware and lumber store, the Town of Swansea has a grand vision of building… a Home Depot, another hardware and lumber store. The Town claims that Home Depot will provide more jobs than 84 Lumber and that it is therefore justified in condemning 84 Lumber in order to transfer the land to its competitor.
Swansea Mayor Michael Buehlhorn said that he was open to the idea of incorporating into Swansea Town Center one of the other businesses that will be displaced, World Class Gymnastics, as long as its facilities do not get in the way of planned parking. However, the mayor believed that 84 Lumber could not compete with the economic stimulus Home Depot promised to bring. The mayor simply was not interested in finding a way to include 84 Lumber.
84 Lumber hired an attorney to fight the town.213 However, the company determined that it stood little chance of prevailing, and soon thereafter reached an agreement with the developer to sell its property and relocate. The developer offered the Moose Lodge $3.2 million to move. However, the lodge turned the offer down. On March 21, 2002, SWIDA voted to condemn the lodge property, which is the last parcel standing in the way of the Town Center project.214 The developer hoped to begin construction on the first phase of the Town Center in mid-2002. However, after the Illinois Supreme Court decision in April 2002, Swansea officials rescinded their approval of the redevelopment plan. Representatives of the Moose Lodge were pleased. “We’ve told them from the beginning that this place is not for sale,” commented Bob Quirin, Moose Lodge trustee. 215
In 2000, the Wheaton City Council condemned three buildings belonging to longtime merchant Robert Sandberg, claiming that the condemnations were in the public interest.216 One of the buildings houses Sandberg’s Store for Men, which Sandberg opened in 1958.217 The City had plans to renovate, redevelop, lease and eventually sell the buildings to another private owner who will use them in a manner more acceptable to the City.
However, in June 2001 the City’s plan hit a snag when it was revealed that the City failed to follow procedural guidelines in setting up the tax-increment-financing district in which the three buildings are located. In its rush to take Sandberg’s property, the City had failed to give proper public notice of which buildings could be condemned in the district. Wheaton was forced to drop its condemnation suit against Sandberg.218 For now, the City’s plans to turn Sandberg’s property over to another private owner are on hold.219
This is the second time the City has tried to take Sandberg’s property. In 1986 it tried to use eminent domain to take one of the buildings. After six years of litigation and $146,000 in legal bills incurred by Sandberg, the Illinois Supreme Court ruled that the local redevelopment ordinance authorizing the taking was unconstitutional.220 Some people (or government entities) never learn!
*These numbers were compiled from news sources. Many cases go unreported, and news reports often do not specify the number of properties against which condemnations were filed or threatened.
†Annual Report of the Illinois Courts: Statistical Summary, Administrative Office of the Illinois Courts, 1998-2002 (includes condemnations for traditional public uses).
187 Southwestern Ill. Dev. Auth. v. Nat’l City Env. LLC, 768 N.E. 2d 1 (Ill. 2002).
188 David van den Berg, “Southwestern Illinois Development Authority Wants Powers Renewed,” Belleville News-Democrat, Nov. 22, 2002.
189 Hal Dardick, “Slow Stream; Despite Veto of Fast-Track Power, Aurora Pushes Plans for River,” Chicago Tribune, July 30, 2000, at 7K.
190 Hal Dardick, “RiverCity Enthusiasm Running Low,” Chicago Tribune, July 20, 2001, at 1D.
191 David Roeder, “Title Fight: City Sues Couple for Deed to N. Side Property,” Chicago Sun-Times, Feb. 1, 2000, at Financial 38.
192 Amy McLaughlin, “Des Plaines’ Main Street Plan Unveiled,” Chicago Daily Herald, Jan. 17, 2002, at News 1.
193 “City Targets Funeral Home,” Chicago Daily Herald, Feb. 13, 2002, at News 3.
194 Mark Shuman, “Funeral Home Move is Okd,” Chicago Tribune, Sept. 15, 2002, at 7A; Amy McLaughlin, “Funeral Home Gains OK for Dempster Site,” Chicago Daily Herald, Sept. 4, 2002, at News 4.
195 Amy McLaughlin, “Des Plaines Moves Ahead on Several Land Purchases,” Chicago Daily Herald, Nov. 30, 2001, at News 4.
196 Amy McLaughlin, “Des Plaines Holds Off on Church’s Expansion,” Chicago Daily Herald, Jan. 24, 2002, at Neighbor 1.
197 Daniel C. Vock, “Quick Take OK for Commercial Use: Court,” Chicago Daily Law Bulletin, Apr. 19, 2001, at 1.
198 Southwestern Ill. Development Authority v. National City Environmental LLC, 2001 Ill. LEXIS 478, at *51 (Ill. Apr. 19, 2001) (Kilbride, J., dissenting).
199 Southwestern Ill. Dev. Auth. v. Nat’l City Env. LLC, 768 N.E. 2d 1, 4 (Ill. 2002).
200 Southwestern Ill. Dev. Auth. v. Nat’l City Env. LLC, 768 N.E. 2d 1, 4, 6 (Ill. 2002); Illinois State Budget for Fiscal Year 2000, ch. 7, at 91. The amount of $56,500 is six percent of the $900,000 value set by the trial court, plus the $2,500 application fee.
201 Southwestern Ill. Dev. Auth. v. Nat’l City Env. LLC, 710 N.E.2d 896 (Ill. App. 1999) (holding condemnation not for public use).
202 Mike Fitzgerald, “Illinois Supreme Court Upholds Seizure of Land for Motorsports Firm’s Parking,” Belleville News-Democrat, Apr. 20, 2001; Southwestern Ill. Dev. Auth. v. Nat’l City Env. LLC, 2001 Ill. LEXIS 478, at *4 (Ill. Apr. 19, 2001) (holding condemnation for public use).
203 Southwestern Ill. Dev. Auth. v. Nat’l City Env. LLC 748 N.E.2d 194 (Ill. 2001) (granting rehearing).
204 Southwestern Ill. Dev. Auth. v. Nat’l City Env. LLC, 768 N.E. 2d 1, 11 (Ill. 2002) (holding condemnation not for public use).
206 Id. at 10.
207 Id. at 9.
208 Southwestern Ill. Dev. Auth. v. Nat’l City Env. LLC, 123 S. Ct. 88 (2002) (denying certiorari).
209 See Southwestern Ill. Dev. Auth. v. Masjid Al-Muharijum, 744 N.E. 2d 308, 312 (Ill. App. 2001).
210 Kara Spak, “Elgin Votes to Condemn Decades-Old Coin Shop,” Chicago Daily Herald, Sept. 26, 2002, at News 3.
211 Kara Spak, “River Park Place Plan Gets Thumbs Down,” Chicago Daily Herald, Dec. 17, 2002, at News 1.
212 Robert Goodrich, “Swansea Town Center Would Displace 2 Businesses; Project Had Made Five Firms Targets for Condemnation,” St. Louis Post-Dispatch, Feb. 28, 2002, at St. Clair-Monroe Post 1.
213 Sue Britt, “Business Closings Causing Headaches; Home Depot Site Stirs Changes in Swansea,” Belleville News-Democrat, Feb. 26, 2002, at 1A.
214 Sue Britt, “Authority Votes to Force Out Moose Lodge,” Belleville News-Democrat, Mar. 22, 2002, at 3B.
215 Will Buss and David van den Berg, “Swansea Still Hopes to Get Home Depot; Eminent Domain Rulings Sank Effort to Get Land,” Belleville News-Democrat, June 5, 2002, at 1A.
216 Bob Goldsborough, “Outerwraps: Wheaton Votes to Condemn Properties Belonging to Clothier,” Chicago Tribune, Sept. 24, 2000, at 7B.
217 Victoria Pierce, “Shop Owner Questions Wheaton Tactics; Power to Force Sale Being Used Unfairly, Man Says,” Chicago Daily Herald, Sept. 21, 2000, at News 1.
218 Bob Goldsborough, “Council Drops Suit Against Merchant,” Chicago Tribune, June 17, 2001, at 7K.
219 Bob Goldsborough, “Council Fixes Rules for Tax District,” Chicago Tribune, Jan. 20, 2002, at 3R.
220 Bob Goldsborough, “Outerwraps: Wheaton Votes to Condemn Properties Belonging to Clothier,” Chicago Tribune, Sept. 24, 2000, at 7B.