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People Ex Rel. City of Urbana v. Paley





Appeal from the Circuit Court of Champaign County, the Hon. Birch E. Morgan, Judge, presiding.


This is an appeal by Hiram Paley, the mayor of the city of Urbana, from a judgment of the circuit court of Champaign County in a mandamus proceeding brought on behalf of the city against the mayor. The action was instituted in response to the mayor's refusal to execute certain general obligation bonds and interest coupons authorized by the Urbana city council for the purpose of acquiring a parcel of land as part of an urban development program. The mayor, in a letter to the city council, explained that he refused to sign the bonds because their issuance for the purpose contemplated would violate the Constitution of the State of Illinois in that it "would constitute the taking of private property for a private use and the expenditure of public funds and the lending of public credit for private (as opposed to public) purposes." The circuit court disagreed and, on the basis of the pleadings and a stipulation of fact, granted the mandamus requested on behalf of the city. The mayor appealed to the appellate court, and the cause was transferred to this court pursuant to our Rule 302(b) (58 Ill.2d R. 302(b)).

Both parties to this dispute agree that by 1974 the central business area of the city of Urbana suffered from a serious case of urban blight. The symptoms were general economic deterioration and a proliferating number of vacant buildings and buildings with structural and mechanical infirmities. The city, in an effort to arrest the spread of blight in downtown Urbana, authorized Arthur Rubloff and Co. to study the business area and make recommendations. The Rubloff report concluded that a commercial renewal project must be undertaken to prevent any further deterioration. In the absence of such a project, "properties will continue to decline in economic value, more stores will become vacant, and the * * * area will continue to change from a retail area to a service area. Little new construction will occur, although financial institutions and government offices may expand and upgrade facilities as needed. In time, tax revenues from the Downtown will be less than the cost of services to the area, meaning increased Real Estate taxes." Further, the report recommended that, to make the project economically feasible, the city should play an active role in its implementation. We might note here that the authority of the city, as a home rule unit, to undertake a program of urban redevelopment is not in dispute herein, having been conceded by both parties. (See also City of Urbana v. Houser, 67 Ill.2d 268.) We are not, therefore, called upon in this case to assess the propriety of the city's objective, but rather to determine the constitutional validity of the means used by the city to achieve that end.

The Rubloff report appraised and enthusiastically approved a redevelopment plan proposed by a local developer, Broadway Development Corporation. The plan, in brief, calls for the expansion of Lincoln Square Mall, an existing shopping facility, by constructing an adjacent commercial center with space for a retail area, offices, and a bank. Moreover, as stated in the report:

"The proposal contains as a key element the participation of the City in the total redevelopment program; the City is to acquire the land necessary for the development, make street alterations and other public improvements, and provide parking facilities."

Subsequent to receipt of the Rubloff report, the Urbana city council passed a series of ordinances to implement the recommendations of the report and the proposed redevelopment plan or one similar to it, though no particular developer has yet been chosen. The first of these was Ordinance No. 7374-70, adopted on May 1, 1974. Section 5 of the ordinance enumerates the powers which the city council may choose to exercise in carrying out the redevelopment plan:

"(A) To approve all development and redevelopment proposals for business districts created in the City of Urbana pursuant to this ordinance.

(B) To exercise the power of eminent domain for the acquisition of real and personal property for the purpose of implementing a development or redevelopment plan for such business district or a development or redevelopment project for which provision is made in such a plan.

(C) To acquire, manage, convey or otherwise dispose of real and personal property acquired pursuant to the provisions of a development or redevelopment plan.

(D) To apply for and accept capital grants and loans from the United States and the State of Illinois, or any instrumentality of the United States or the State, for business district development and redevelopment.

(E) To borrow funds as it may be deemed necessary for the purpose of business district development and redevelopment, and in this connection issue such general obligation or revenue bonds as it shall be deemed necessary, subject to such limitations as the General Assembly of the State of Illinois may hereafter impose pursuant to Section 6(k) of Article VII of the 1970 Constitution of the State of Illinois.

(F) To enter into contracts with any public or private agency or person for the purpose of business district development and redevelopment.

(G) To sell, trade, or improve such real property as may be acquired in connection with business district development and redevelopment plans and to provide by ordinance for the procedures that shall be employed in the sale or trade of any such real estate.

(H) To employ all such persons as may be necessary for the planning, administration and implementation ...

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