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American Oil Corp. v. City of Chicago

JUNE 13, 1975.

AMERICAN OIL CORPORATION ET AL., PLAINTIFFS-APPELLANTS,

v.

THE CITY OF CHICAGO, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Cook County; the Hon. F. EMMETT MORRISSEY, Judge, presiding.

MR. PRESIDING JUSTICE BARRETT DELIVERED THE OPINION OF THE COURT:

Rehearing denied July 28, 1975.

The cause before this court is an action for declaratory judgment and other relief brought by the estate of Dorothy Dalton Hammerstein, owner of the north half of the subject property which is presently improved with a Standard Oil gasoline service station, and American Oil Corporation, the lessee of said station, and owner of the south half of the subject property.

Plaintiffs ask this court to declare the ordinance adopted by the City Council of the City of Chicago, reclassifying the subject property from B4-3 Restricted Service District to R-4 General Residence District under the Chicago Zoning Ordinance, invalid and void. A bench trial was had at which the trial court entered an order in favor of the City, declaring the ordinance valid and constitutional as applied to the subject property. Plaintiffs' motion to vacate the judgment was denied, whereupon they filed this appeal.

The subject property located at 7500 north in the City of Chicago and bounded by Birchwood Avenue on the south, Howard Street on the north, Sheridan Road on the east and an alley on the west has had a zoning classification allowing commercial use for more than 30 years prior to its reclassification from a B4-3 to a R-4 General Residence District by the City Council on July 28, 1971.

The American Oil Corporation purchased the south half of the property at the corner of Birchwood and Sheridan Road in 1935, and shortly thereafter erected a gasoline station at that location. This station was operational until 1970, at which time it closed upon the opening of a new American Oil gasoline station on the north half of the property.

The north half of the subject property, owned by the estate of Dorothy Dalton Hammerstein, contained a building used for both commercial and residential purposes until it was razed in 1970. In 1969, the American Oil Corporation, relying on the B4-3 classification of the entire subject property, entered into a lease with Mrs. Hammerstein for the north half of the property for a period of 10 years commencing July 1, 1970, with three 5-year extensions and an option to buy the property at a minimum purchase price of $250,000.

The requisite driveway permits for the new gas station were not issued until the American Oil Corporation assured the then 49th Ward Alderman Paul Wigoda and community residents that another gas station would not be built at the corner of Birchwood and Sheridan Road and that the north half of the subject property containing the new station would be properly designed and landscaped. After having made these assurances in writing to the alderman in 1969, and having obtained his approval, permit applications containing the name and address of the American Oil Corporation were issued for the demolition of both the building on the north half of the property and the old gas station on the south half of the property and for the erection of a new gas station on the north half of the property. The new station was constructed at a cost of $171,000 and opened for business in late 1970.

Shortly after the old gas station was demolished, the American Oil Corporation advertised the sale of the vacant property under the B4-3 classification. A contract was entered into with Arnold Kramer in November, 1971, for the purchase of the property for $180,000, subject to Kramer's consummation of a binding lease with Denny's Restaurant. Kramer testified that at the time of the negotiations with Denny's, he had checked the plat book which showed a B4-3 classification. Though the lease with Denny's failed to materialize, Kramer was able to secure the International House of Pancakes as a tenant. A new contract for the purchase of the south half of the subject property was then executed. Neither Kramer nor the American Oil Corporation was aware during these negotiations that the city council had rezoned the subject property to a R-4 General Residence classification on July 28, 1971. Only in early 1973, when the International House of Pancakes applied for a building permit, did the parties learn of the zoning change.

Alderman Wigoda, at the beckoning of some area residents, had introduced on May 5, 1971, an ordinance in the city council changing the B4-3 classification to the R-4 General Residence District. Legal notice of the public hearing before the Committee on Building and Zoning was published in the CHICAGO TODAY newspaper on June 11, 1971, at page 67. The notice neither recited the names of the owners of the property, nor did it give the address of the property. The notice did, however, list the streets which bounded the area in question.

As a courtesy to area residents, the Committee caused to be delivered actual notice of the public hearing to property owners within 150 feet in each direction of the subject property. These notices were placed in the respective mailboxes of the residents. No such actual notice was delivered to plaintiffs, American Oil Corporation and the estate of Dorothy Dalton Hammerstein, the owners of the property which was proposed to be rezoned.

Alderman Wigoda, as a member of the Committee on Building and Zoning, was the only witness at the June 29, 1971, hearing to address himself to the rezoning of the subject property. In a meeting which abounded with levity, Alderman Wigoda told the Committee that "the property is now vacant" and that "it has been vacated by Standard Oil." No mention was made of the existence of the recently built gasoline station on the subject property. The matter was taken under advisement without a vote on the merits and the Committee then adjourned sine die. No other public hearings were had with respect to the subsequent rezoning of the property.

OPINION

It is plaintiffs' contention that due process of law mandates actual notice and an opportunity to be heard where the adoption of an amendatory zoning ordinance affects plaintiffs' "legally protected interests." At trial, testimony revealed that the rezoning of the subject property from B4-3 to R-4 has had a substantial effect on the value of the property. The gas station has become a nonconforming use, and as such cannot be rebuilt if it is damaged more than 50 percent, and enlargment of the building and structural repairs, which are periodically undertaken by the ...


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