City of Chicago v. Gorham

400 N.E.2d 42, 80 Ill. App. 3d 496, 35 Ill. Dec. 905, 1980 Ill. App. LEXIS 2229
CourtAppellate Court of Illinois
DecidedJanuary 7, 1980
Docket79-1712
StatusPublished
Cited by7 cases

This text of 400 N.E.2d 42 (City of Chicago v. Gorham) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Chicago v. Gorham, 400 N.E.2d 42, 80 Ill. App. 3d 496, 35 Ill. Dec. 905, 1980 Ill. App. LEXIS 2229 (Ill. Ct. App. 1980).

Opinion

Mr. JUSTICE O’CONNOR

delivered the opinion of the court:

Petitioner, City of Chicago (City), brought an eminent domain action to acquire the property known as the Sherman House Hotel. Respondents, certain sublessees of stores in the building (tenants), filed a traverse, contesting the City’s authority to acquire the property. The trial court denied the traverse and subsequently entered judgment for the City, setting the value of the property at *13.2 million. The tenants appeal. This controversy concerns the Chicago Loop block bounded by La Salle, Lake, Clark and Randolph Streets, and primarily occupied by the Sherman House Hotel. On November 21,1978, the Commercial District Development Commission (Commission) designated the subject property as a “blighted commercial area” which is defined in the Municipal Code of Chicago (1977), ch. 15.1, §15.1 — 1(d), as:

“° ° * any area of not less in the aggregate than two acres located within the territorial limits of the City of Chicago where 75% of the land area is devoted to a commercial use and where commercial buildings or improvements, because of age, dilapidation, obsolescence, over-crowding, lack of ventilation, light, sanitary facilities, inadequate utilities, excessive land coverage, deleterious land use or layout, inadequate and ineffective use, failure to produce a proper share of tax revenues or provide employment commensurate with the capacity of the area, or any combination of these factors, are detrimental to the public safety, health, morals, welfare, and economic stability.”

The Commission relied upon a report submitted by the department of planning, city and community development, based on studies made over a five-year period. The report indicated that excluding the parking garage at the corner of Lake and La Salle, only 8% of the 960,000 square feet of commercial space is occupied. Three-quarters of the structures are in a deteriorated condition. The report concluded:

“This unutilized space creates a void in the central business district that fails to produce a proper share of tax revenues or to provide adequate employment commensurate with the capacity of the area.”

On December 20, 1978, the Chicago city council approved the Commission’s designation of the area as commercial blight. On February 15,1979, the City of Chicago filed a petition to condemn, through eminent domain, the subject property. On April 16, 1979, certain tenants filed a traverse to the City’s petition.

On May 15, 1979, the Commission approved a redevelopment plan for the property. The plan envisioned the transfer of the property to the Illinois Capital Development Board (Board) at a price equal to acquisition costs, for the construction of a new State of Illinois Building. It was further provided that the property ° ° should be devoted primarily to public use. Any other use must be related to and compatible to the primary use.” The objectives of the plan were:

“a. Remove economically obsolescent and incompatible land use.

b. Provide parcels of land sufficient in size and configuration to permit public institutional development.

c. Provide the residents of the State of Illinois with an increased level of public institutional services.

d. Consolidate available governmental and public institutional uses through the development of a State of Illinois facility in close proximity to City Hall, the County Building, and the Richard J. Daley Center.

e. Anchor and encourage the contemplated redevelopment of the adjacent North Loop Area, as set forth in the ‘Redevelopment Plan for Blighted Commercial Area North Loop, March, 1979.’ ”

Finally, the plan noted that the Board “has agreed to work with the City of Chicago to design a facility” compatible to and harmonious with the contemplated North Loop redevelopment project.

The tenants contended that the City could not lawfully take the subject property for the purpose of resale to the State. This issue was briefed and argued by the parties. The trial court denied the traverse, finding that the City sought to properly utilize its power of eminent domain for clearance of a blighted commercial area.

The cause then proceeded to the question of valuation. Under the terms of their leaseholds, the tenants had no right to participate in the division of any condemnation award. Accordingly, they had no standing to question the adjudication of value and did not participate in this phase of the case. Prior to trial, the owners of the subject property and the City agreed upon the fair market value of the property. On October 17,1979, the City presented evidence on the value of the property. Following this hearing, the trial court entered a judgment finding the property’s fair market value to be $13.2 million.

The tenants’ principal contention on appeal is that the City may not use its eminent domain power to acquire property for the State of Illinois. The Board itself has no eminent domain powers. (Ill. Rev. Stat. 1977, ch. 127, pars. 771-792.) However, the tenants argue that the State must use its eminent domain powers to acquire the subject property for the Board, rather than allow the City to act as a surrogate purchasing agent.

The City maintains that later disposition of the subject property to the State is irrelevant because acquisition for redevelopment and clearance itself is a sufficient and valid purpose of eminent domain. We agree.

Eminent domain is the right of a sovereign State or its lawful delegate to condemn private property for public use upon payment of just compensation to the owner. (Sanitary District v. Manasse (1942), 380 Ill. 27, 42 N.E.2d 543.) It is essential that property be taken for a public use. (City of Chicago v. Barnes (1964), 30 Ill. 2d 255, 195 N.E.2d 629.) However, when the primary purpose of an eminent domain proceeding is a public use, it is immaterial that a private enterprise or another governmental entity incidentally gains a benefit. Compare Chicago Land Clearance Com. v. White (1952), 411 Ill. 310, 104 N.E.2d 236, cert. denied (1952), 344 U.S. 824, 97 L. Ed. 641,73 S. Ct. 23, with City of Chicago v. R. Zwick Co. (1963), 27 Ill. 2d 128, 188 N.E.2d 489, appeal dismissed sub nom. Gonzalez v. Chicago (1963), 373 U.S. 542, 10 L. Ed. 2d 687, 83 S. Ct. 1538.

The tenants do not contest the authority of the City of Chicago, as a home rule unit (Ill. Const. 1970, art. VII, §6), to exercise eminent domain powers pursuant to the Municipal Code of Chicago (1977), ch. 15.1. See Chicago, Burlington & Quincy R.R. Co. v. Cavanagh (1917), 278 Ill. 609, 116 N.E. 128.

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400 N.E.2d 42, 80 Ill. App. 3d 496, 35 Ill. Dec. 905, 1980 Ill. App. LEXIS 2229, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-chicago-v-gorham-illappct-1980.