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Lurie v. Vil. of Skokie

OPINION FILED SEPTEMBER 12, 1978.

MAX LURIE ET AL., PLAINTIFFS-APPELLANTS,

v.

THE VILLAGE OF SKOKIE ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR L. DUNNE, Judge, presiding.

MR. JUSTICE BROWN DELIVERED THE OPINION OF THE COURT:

Six adjacent landowners filed a complaint for declaratory and injunctive relief against the village and its president, seeking to declare various ordinances of the village unconstitutional, invalid, and void. The challenged ordinances were passed to permit the sale of certain municipal property to a developer for the construction of low-income housing for the elderly. The developer, Richard Stein, intervened as a defendant. The trial court granted partial summary judgment for defendants pursuant to section 57 of the Civil Practice Act. (Ill. Rev. Stat. 1975, ch. 110, par. 57.) Five of the six original plaintiffs filed an amended complaint. A bench trial proceeded, and one remaining plaintiff withdrew on the first date of trial. At the close of plaintiffs' case, the trial court entered judgment for defendants pursuant to section 64(3) of the Civil Practice Act. Ill. Rev. Stat. 1975, ch. 110, par. 64(3).

Plaintiffs appeal from both orders. As one plaintiff was given leave to withdraw as a plaintiff-appellant by this court, there are three plaintiffs-appellants prosecuting this appeal.

The issues presented for our review are whether the trial court erred in granting partial summary judgment for the defendants as to the validity of ordinance No. 76-3-V-900 and whether it erred in entering judgment for defendants at the close of plaintiffs' case.

A chronological recitation of the pertinent facts is essential to the disposition of this appeal.

The village purchased the property at issue herein in 1969 and 1975 at a total cost of $425,322. The property is located at Lincoln Avenue and Galitz Street in the central business district. The two ordinances authorizing the acquisition of the property recited that the land was for municipal purposes, expansion of municipal facilities, and parking. These two ordinances are not challenged. The property is used primarily for parking.

On February 24, 1975, the Village Board of Trustees (Board) adopted a housing assistance plan at a public meeting, after public hearings had been held on the plan. The minutes of the meeting indicate that this plan included low-income housing for the elderly.

Marvin Bailey testified that he was hired by the village in September 1975 to serve as its director of housing development. His primary duties were to implement the Housing Assistance Plan and to find developers for low-income housing. Bailey testified that he first met Richard Stein on November 18, 1975, and had a phone conversation with him prior to that time.

Defendant Stein testified that he had learned in mid-1975 that Skokie was interested in housing development, so he called the village planner. He stated that he received a phone call from Bailey in September 1975 and Bailey said to Stein that he had learned of Stein through Morton Grove newspaper accounts. Stein's Morton Grove project for senior citizens subsidized housing had recently failed to receive the requisite number of votes of their municipal Plan Commission. Stein had secured a commitment from the Illinois Housing Development Authority (IHDA) for funds and rent subsidies for the Morton Grove site.

Stein testified that he had a number of phone conversations and several meetings with Bailey in the latter part of 1975 and early 1976; that he had public meetings with the corporation counsel and the trustees; and that he had meetings other than the Monday night public Board meetings. He testified that at these meetings, his concept for development of the Lincoln-Galitz site was discussed, including his concept for building, for management, and for marketing. He testified that his architects were in contact with various village representatives during late 1975 and early 1976. He stated that he put the figure of $393,000 in the IHDA forms he submitted for the Skokie project.

Defendant Albert Smith, village president, testified that the first public presentation that Stein made that he had an IHDA entitlement for low-income housing for the elderly was at the Board meeting of February 16, 1976. He testified that he and other members of his staff had met with Stein on a number of occasions prior to February 1976, at which time Stein's proposal was developed. He further testified that Stein's IHDA entitlement, but not architectural design, was discussed at these meetings. He stated that several members of the Board attended meetings with Stein prior to February 1976, at which rezoning of the property was discussed.

Peter Dwars, deputy director of IHDA, testified that Stein made his initial application for the Skokie project in January 1976; that the commitment was issued October 1976; that it expired February 1977; that it was extended to March 31, 1977; that it was extended on June 28, 1977; that there was no commitment outstanding from March 31, 1977, to June 28, 1977; that it expired on October 6, 1977; and that there is a board of directors' resolution which would allow the commitment to be extended to December 28, 1977. He testified that only the IHDA board of directors can commit a project and the length of time to complete the process varies, although it can be as fast as 16 to 18 months. He stated that IHDA will not issue a commitment to more than one developer for the same piece of property and that HUD-FHA will not issue a commitment for a project on which IHDA has already committed.

On December 31, 1975, the Village Plan Commission recommended amendments to the "R-5 Low Rent Housing for the Elderly" zoning classification to the Board. The recommended amendments included the deletion of the 60,000 square feet minimum lot size requirement. The Plan Commission's report to the Board stated as follows: "The lot size of the Armond King project formed the basis for the 60,000 square feet requirement and as a result several other smaller parcels in the Village which would make excellent sites for low-income elderly housing units cannot currently be considered for R-5 zoning." At a public meeting on January 12, 1976, the Board unanimously concurred with the Plan Commission's recommended R-5 amendments.

Plaintiff Schmitt testified that she first learned of the proposed development in early 1976 when she received notice of a public meeting. Plaintiffs Schmitt and Harkess testified as to their expectations when they purchased their respective property that the Lincoln-Galitz property would be used for public parking.

At the Board's public meeting of February 16, 1976, Bailey announced that IHDA had approved Stein's request to transfer 150 elderly housing subsidies to the Lincoln-Galitz property. He further reported that Stein proposed to purchase the property for $393,000 and to construct 150 units. The Board adopted a motion directing the corporation counsel to draft an ordinance authorizing the negotiated sale of village-owned property to a private developer, and a specific resolution, under the ordinance, for the sale of the land at Lincoln Avenue and Galitz Street to Richard Stein. The Board adopted a motion directing the Planning Department to advertise the case for a public hearing and directing the Plan Commission to review it for rezoning.

The ordinance and resolution were drafted and introduced at the Board's public meeting of February 23, 1976. The ordinance (76-3-V-900) and resolution thereto were adopted by the Board by a vote of 5 to 2 at its public meeting of March 1, 1976. The Board also adopted an ordinance (75-3-Z-902) which embodied the Plan Commission's recommended R-5 amendments. Sometime thereafter, Stein and the village entered into a real estate sales contract calling for Stein's purchase of the property for $393,000 and its development as low-income housing for the elderly.

At the Plan Commission's public meeting of March 4, 1976, which plaintiff Schmitt attended, the Plan Commission voted to: (1) recommend rezoning the Lincoln-Galitz property from B-5 Central Business District to R-5 Low Rent Housing for the Elderly; and (2) recommend approval of the site plan. Its report to the Board included both recommendations, and additionally recommended 13 conditions be imposed for approval of the site plan. At the Board's public meeting of March 29, 1976, the Board voted to concur with the recommended rezoning from B-5 to R-5 and voted to concur with the recommended site plan approval subject to the 13 conditions.

An appropriate ordinance was introduced at the Board's meeting of April 12, 1976. On April 19, 1976, the ordinance (76-4-Z-908) was adopted by the Board which rezoned the Lincoln-Galitz property from B-5 Central Business District to R-5 Low Rent Housing for the Elderly and which approved "the site plan presented by the developer of the said property dated March 1, 1976 and revised March 19, 1976," subject to the 13 conditions.

Plaintiffs filed their complaint on May 18, 1976.

Counts I and II sought to invalidate and restrain enforcement of ordinance No. 76-4-Z-908. Count I attacked the ordinance on theories of special legislation and contractual and conditional zoning. Count II alleged that plaintiffs had purchased their properties in reliance that the property would be used for municipal purposes, and that the ordinance violated their Federal and State constitutional rights as a taking without just compensation or due process.

Counts III, IV, and V sought to invalidate and restrain enforcement of: (1) ordinance No. 76-3-V-900, which authorized the sale, by majority vote of the corporate authorities at whatever price the authorities deem appropriate, of village-owned property to private persons for low income housing and which stated that its provisions supercede the fair market value requirement and three-fourths vote requirement for acceptance of a bid of section 11-76-2 of the municipal code of 1961 (Ill. Rev. Stat. 1975, ch. 24, par. 11-76-2); and (2) the resolution under the ordinance which authorized the sale of the Lincoln-Galitz property to Richard Stein and which authorized the village president to execute the real estate sales contract attached thereto. Count III alleged that ordinance No. 76-3-V-900 was invalid in that it approves the disposition of village property at a price which may be below fair market value, which action is not within the power of local government units under article VII of the Illinois Constitution; and that the resolution thereunder is invalid because enacted under an invalid ordinance, for an inadequate price, and in violation of the "Open Meetings Act" (Ill. Rev. Stat. 1975, ch. 102, pars. 41-46). Count IV alleged that the resolution and real estate sales contract were invalid because approved without compliance with the notice and bidding requirements of "An Act to authorize the sale or lease of air rights by municipal corporations * * *" (Ill. Rev. Stat., ch. 85, pars. 1061-1063) and because they set a price for the property which is below "Fair Use Value," contrary to sections 2 and 3 of the Act (Ill. Rev. Stat., ch. 85, pars. 1062 and 1063). Count V alleged that ordinance No. 76-3-V-900 is an invalid exercise of home rule powers and an ad hoc enactment resulting from a course of individualized bargaining, negotiation and contract rather than general legislation; and that the resolution thereunder was invalid since not adopted by three-quarters of the corporate authorities, as provided in section 11-76-2 of the Illinois Municipal Code (Ill. Rev. Stat., ch. 24, par. 11-76-2), and that it authorizes the disposal of real estate without proper notice or bidding and at less than fair market value, in contravention of section 11-76-2 (Ill. Rev. Stat., ch. 24, par. 11-76-2).

On January 10, 1977, defendants moved for partial summary judgment, pursuant to section 57 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 57), with respect to counts III, IV, and V of the complaint. On March 29, 1977, during argument on the motion, the trial court expressed concern over the lack of bidding. Stein testified that sometime between March and June, 1977, after one of the court sessions, his attorneys told him that "the Village should publish and go for bid on the property," that he told them it was permissible to give up his rights under the real estate sales contract, and that his attorneys informed him at the time that he ran the risk of not being the successful bidder. Defendants contend in their brief in this court that the court session Stein referred to occurred on March 29, 1977. Stein's June 10, 1977, letter to the corporation counsel acknowledged that some other bidder may be successful and he therein expressed his willingness, in that event, to release his contractual rights and assign his interest in the property to the successful bidder.

On May 18, 1977, the trial court entered an order granting partial summary judgment for defendants. The trial court found, among other things, that ordinance Nos. 76-3-V-900 and 76-4-Z-908 were validly enacted pursuant to the village's home rule powers; reserved ruling on the issue of whether the resolution under ordinance No. 76-3-V-900 was a valid exercise of the village's home rule ...


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