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City of Chicago v. Avenue State Bank

FEBRUARY 22, 1972.

THE CITY OF CHICAGO, PETITIONER-APPELLEE,

v.

AVENUE STATE BANK ET AL., DEFENDANTS. — (CHICAGO TITLE AND TRUST COMPANY, DEFENDANT-APPELLANT.)



APPEAL from the Circuit Court of Cook County; the Hon. EDWARD F. HEALY, Judge, presiding.

MR. PRESIDING JUSTICE GOLDBERG DELIVERED THE OPINION OF THE COURT (AS MODIFIED ON THE DENIAL OF PETITIONER'S PETITION FOR REHEARING):

Rehearing denied March 29, 1972.

City of Chicago (petitioner) brought this action to acquire the subject property from Chicago Title & Trust Company, as Trustee (owner). The jury viewed the property and returned a verdict awarding $60,000. The owner appeals, raising contentions hereinafter set forth.

The subject property is one of several parcels comprising the so-called Madison-Canal Urban Renewal Redevelopment Project in Chicago. It is commonly known as 544-550 West Madison Street and is located on the north side of Madison Street between Jefferson and Clinton Streets. It fronts 63.5 feet on Madison Street and is 100 feet deep; comprising 6350 square feet. Calculation shows that the amount awarded by the jury is approximately $9.44 per square foot. The property is improved with a one-story building divided into four stores. It is zoned B-7-5; permitting various business uses. The improvements are approximately 50 to 55 years old.

Petitioner called two valuation witnesses. They both gave opinions that the highest and best use of the subject property was its present use. One witness combined this with a consideration of the possibility of holding the property for future development. One of these witnesses testified that the fair cash market value of the subject property on July 22, 1969, when petition for condemnation was filed, was $50,000 and the other valued the property at $48,500. These valuations are respectively equivalent to approximately $7.87 and $7.63 per square foot.

The owner called three valuation experts. They all agreed that the highest and best use of the property was continuation of its present use and holding it for future development. One of these witnesses added the element of consideration of an interim use for automobile parking. These witnesses valued the property at $120,000, $130,000 and $168,000, respectively, equivalent to approximately $18.89, $20.47 and $26.45 per square foot.

Over objection duly made by counsel for the owner, the court permitted petitioner to prove sale of a parcel of real estate at 14-30 West Harrison Street in Chicago as comparable to the subject property. The owner offered proof of sale of three parcels of real estate at the south-west corner of Madison and Canal Streets and also of three parcels on the west side of Wacker Drive between Jackson and Van Buren Streets as comparables. The court sustained objections of petitioner to this proof. [The court permitted the owner to prove sale of real estate at 111 North DesPlaines Street in Chicago as being comparable to the subject property. This real estate was sold in January of 1966 for $60,000; or about $16 per square foot for its area of some 3800 square feet. It is located approximately two blocks from the subject property and was improved with a three story brick building. This evidence was not the subject of argument in this court by either party.]

The owner contends that prejudicial error is apparent in the record in that: 1) the court should not have rejected evidence regarding the two comparable situations tendered by the owner; 2) the court should not have admitted evidence of the sale of the Harrison Street property tendered by petitioner; 3) there was undue restriction of cross-examination of petitioner's expert witnesses by counsel for the owner combined with prejudicial comments and remarks by the trial court; and 4) counsel for petitioner made unduly prejudicial closing arguments. These points will be considered in order.

• 1, 2 The first two contentions raised by the owner are directed to rulings of the court with reference to proof of comparable sales. In Department of Public Works v. Drobnick, 14 Ill.2d 28, 34, the Supreme Court of Illinois set forth the basic rules which apply to this type of proof as follows:

"It is well settled that evidence of voluntary sales of comparable property in the vicinity is admissible in evidence to aid the jury in determining the value of the land to be taken. (City of Chicago v. Harbecke, 409 Ill. 425.) However, the party offering the proof must first show that the land so sold was similar in locality and character to the land sought to be acquired. (Forest Preserve District v. Chilvers, 344 Ill. 573, 577.) And the matter of admission of comparable sales must be left largely to the discretion of the trial judge." Forest Preserve District v. Kercher, 394 Ill. 11; Forest Preserve District v. Dearlove, 337 Ill. 555.

We will first apply these principles to the rulings of the court which rejected evidence of comparable sales tendered by the owner. Three contiguous parcels of vacant property on the south side of Madison Street between Clinton and Canal Streets were acquired by the real estate engineer of Illinois Bell Telephone Company for corporate use. One of these parcels comprised 42,000 square feet and the remaining two were 3600 square feet each; a total area of 49,200 square feet. Despite the close proximity of these three parcels to the subject property, the court was obliged to consider certain unique features in determining admissibility of the sales.

• 3 The Illinois Bell Telephone Company, as a public utility, had the right to acquire these parcels as provided by the law of eminent domain. (Ill. Rev. Stat. 1969, ch. 111 2/3, par. 63.) It follows logically from this premise that the price paid in a situation of this type would not be competent as comparable evidence in the case at bar. (Peoria Gas Light Co. v. Peoria Term. Ry., 146 Ill. 372, 378.) There is an issue in the evidence as to whether the sellers knew that the Illinois Bell Telephone Company was the actual purchaser. All negotiations were carried on by the real estate engineer of the company in his own name and he did not disclose his principal. However, there is evidence that a broker in the transaction representing the seller was aware of the true identity of the purchaser. The brokerage commission might well be expected to vary in proportion to the amount of the sale. Furthermore, there were other factors involved in the comparability of the three sales. Underground cables run under the site in question and the evidence shows that the proximity of this equipment made the land unique to the Bell Telephone Company as it made possible large annual savings by the company. This may well have been an important consideration in motivating the purchase as well as affecting the price paid. Perhaps of greater importance, the acquisition of the two smaller parcels was subject to a contingency that the purchaser would also be able to acquire the larger parcel. Upon due consideration of all of these factors, we find that the court acted well within the bounds of reasonable discretion in rejecting evidence of the sale of these three parcels.

• 4 The second group of sales tendered as comparable by the owner involved three contiguous parcels of real estate on the west side of Wacker Drive between Jackson Boulevard and Van Buren Street. This site is approximately five and one-half or six blocks from the subject property. The sales took place in the latter part of 1968 and early 1969. The size of the three parcels varied with one being 8000 square feet, another 7550 square feet and the third 5000 square feet or a total of 20,550 square feet.

This real estate was acquired [for erection of a large office structure more than 30 stories in height with a total building area of approximately 500,000 square feet.] The contingency of possible creation of a comparable project including the subject property was very much in the future as of the time of the filing of the petition. As the testimony ...


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