APPEAL from the Circuit Court of Jackson County; the Hon.
THOMAS W. HANEY, the Hon. BROCKTON LOCKWOOD, and the Hon. RICHARD
E. RICHMAN, Judges, presiding.
MR. PRESIDING JUSTICE JONES DELIVERED THE OPINION OF THE COURT:
Rehearing denied September 27, 1979.
Pursuant to its home-rule powers, the city of Carbondale (city) passed an ordinance on August 7, 1978, authorizing the city council to sell certain parcels of urban renewal property for redevelopment in accordance with the city's urban renewal plan. At the same meeting, two ordinances were passed authorizing the sale of separate sections of the property to UMIC Securities Corporation and the First National Bank and Trust Company of Carbondale, as trustee, both of whom are defendants in the actions considered herein. The sales were quickly consummated and their validity was subsequently challenged in the circuit court of Jackson County in three individual taxpayer suits under section 1-5-1 of the Illinois Municipal Code (Ill. Rev. Stat. 1977, ch. 24, par. 1-5-1). These suits were brought by John Ham, Kenneth Marquard and James Hewette in the name and for the benefit of the city. In Ham and Marquard's suits, the trial court entered orders granting motions for summary judgment based on plaintiff's lack of standing. In Hewette's suit, the trial court dismissed the action with prejudice pursuant to defense motions based on the merits of the case as well as the issue of standing. The plaintiffs appealed these judgments, and this court consolidated all three cases on appeal.
The primary contention of the plaintiffs is that the property in question is subject to the scheme of disposition contained in section 6 of the Urban Community Conservation Act (Ill. Rev. Stat. 1977, ch. 67 1/2, par. 91.13) and that the sales of these parcels were void since they were made contrary to the provision of that section that property held over five years must be sold to the highest bidder at a public sale.
The General Assembly has from time to time enacted various statutes directed towards meeting the urban renewal problems of Illinois municipalities. In 1953, the legislature enacted the Urban Community Conservation Act (Ill. Rev. Stat. 1953, ch. 67 1/2, par. 91.8 et seq.), the purpose of which was to grant sufficient powers to municipalities to upgrade certain predominantly residential areas and prevent their deterioration into slums and blighted areas. (Ill. Rev. Stat. 1953, ch. 67 1/2, par. 91.9 and 91.10(d).) The Act contemplated that these powers would be exercised by the municipality through a conservation board. By statute any board created under the Act had the power, among others, to designate areas meeting the Act's requirements for a "conservation area," to approve all conservation plans developed for these areas, to approve the use of eminent domain for the acquisition of real property for the purposes of the Act and to act as the agent of the municipality in the acquisition, management and disposition of property acquired pursuant to the Act. Ill. Rev. Stat. 1953, ch. 67 1/2, par. 91.11(a)-(c).
In May of 1962, the city adopted Ordinance No. 1168, creating a conservation board to act pursuant to the provisions of the Urban Community Conservation Act. The ordinance expressly adopted the substance of sections 3 through 6 of the Act (Ill. Rev. Stat. 1961, ch. 67 1/2, pars. 91.10-91.13), including the proviso of section 6 that "[n]o property shall be held more than 5 years, after which period such property shall be sold to the highest bidder at public sale." By resolution in June of 1968, the city designated a particular area as a conservation area. That conservation area, referred to as the College Neighborhood Urban Renewal Area, contained all of the property that was sold in 1978 which serves as the subject of the present taxpayer suits. A conservation plan for the College Neighborhood Urban Renewal Area was apparently also approved in June of 1968. On April 28, 1969, the city as "Local Public Agency" (see Ill. Rev. Stat. 1969, ch. 24, par. 11-11-1, and 42 U.S.C. § 1460(h) (1976)) and the Federal Government, through the Department of Housing and Urban Development (HUD), entered into a loan and capital grant contract covering this urban renewal project. The city entered into the contract in order to enable it to acquire land in the renewal area and make it available for redevelopment in accordance with the uses specified in the urban renewal plan.
The city began acquiring property in the conservation area in late 1969 by outright purchase and by condemnation proceedings. The acquisition of property continued in 1970 and 1971. The title to land so acquired was placed in the city of Carbondale.
On September 14, 1971, the city passed Ordinance No. 1651. One of its functions was to repeal the prior ordinance creating a conservation board for the city. The ordinance expressly ratified and affirmed all valid acts of the conservation board taken pursuant to the Urban Community Conservation Act and stated that all conservation areas already designated in the city under the Act would remain in full force and effect and be known thereafter as urban renewal project areas. The ordinance also authorized the city council to designate additional urban renewal project areas and adopt urban renewal plans concerning them. This grant of power was expressed in language similar to that found in section 5 of the Urban Community Conservation Act (Ill. Rev. Stat. 1971, ch. 67 1/2, par. 91.12).
At the time of passage of Ordinance No. 1651 the city was not a home-rule municipality as defined in the Illinois Constitution of 1970 (Ill. Const. 1970, art. VII, § 6(a)). Its authority to carry forward the programs of the Urban Community Conservation Act in the absence of a conservation board created under the Act derived from section 11-11-1 of the Illinois Municipal Code (Ill. Rev. Stat. 1971, ch. 24, par. 11-11-1). That section authorized the corporate authorities of municipalities without home-rule powers to acquire any real property necessary or appropriate for the rehabilitation or redevelopment of any conservation area as defined in the Urban Community Conservation Act and to sell such property as was not required for the public purposes of the municipality. The section further provided that if the municipality selling the property were a local public agency under an urban renewal project, as the city of Carbondale was by virtue of its contract with HUD, its corporate authorities would have the same powers and be subject to the same conditions, restrictions, limitations, penalties and definitions of terms, and employ the same modes of procedure in the conveyance of real property as are prescribed in sections 15 through 19 of the Urban Renewal Consolidation Act of 1961 (Ill. Rev. Stat. 1971, ch. 67 1/2, pars. 91.115-91.119). One such restriction found in section 18 of that Act (Ill. Rev. Stat. 1971, ch. 67 1/2, par. 91.118) is that any real property lying within the area of the redevelopment project which has not been sold by the municipality within five years after it has acquired title to all the real property within the area of the redevelopment project must be immediately sold by the municipality at public sale for cash to the highest bidder obligating himself in a certain manner to redevelop the property in accordance with the approved plan.
Subsequent to the passage of Ordinance No. 1651, the city continued to acquire property in the urban renewal area without the benefit of the conservation board as agent. The last parcel in the area obtained by purchase or condemnation was acquired on June 2, 1972. The city became a home-rule municipality shortly thereafter on the basis of its increased population. On September 19, 1977, the city adopted an ordinance vacating various streets and alleys in the urban renewal area for which the city declared it had no further use. This ordinance was later amended on January 9, 1978, by an ordinance which corrected the legal description of two of the vacated alleys contained in the prior ordinance. Finally, on August 7, 1978, the city adopted the three ordinances which precipitated these suits. All three ordinances were expressly adopted pursuant to the city's home-rule powers based on findings that the subject matter of each ordinance pertained to the government and affairs of the city. Ordinance No. 78-72 authorized the city to sell the property involved here to private parties for redevelopment in accordance with the city's urban renewal plan. The main objective of the proposed sales was to increase housing for low income, elderly and handicapped persons within the city. The ordinance provided that the method of sale would be controlled by the rules and regulations concerning the disposal of land promulgated by HUD in the Urban Renewal Handbook (Urban Renewal Handbook, 7214.1 REV, Land Marketing and Redevelopment, ch. 5, secs. 63-76). The HUD guidelines allow sale by any method permitted by State or local law. The city apparently favored private negotiation and on the same day authorized the sale of separate sections of the property through Ordinance Nos. 78-73 and 78-74 to UMIC Securities Corporation and First National Bank and Trust Company of Carbondale as trustee for a land trust in accordance with the terms of prior offers to them contained in respective contracts for sale dated December 14, 1976, and June 10, 1977. All of the land authorized to be sold in Ordinance No. 78-72 was involved in the subsequent two ordinances. The sales were consummated the following day, August 8, 1978.
The primary thrusts of the plaintiffs' complaints were that the city's dispositions of these parcels of land were invalid because they were not conducted in accordance with section 6 of the Urban Community Conservation Act (Ill. Rev. Stat. 1977, ch. 67 1/2, par. 91.13) in that the parcels of land, which had all been held over five years prior to the sales, were not sold to the highest bidder at public sale as required by that section. This argument, of course, rests upon the plaintiffs' belief that the city had no power to act other than as provided for in the Urban Community Conservation Act. In support of this proposition, plaintiffs argue that the passage of Ordinance No. 1651 dissolving the conservation board was void because the city had no authority under State law to administer urban renewal property except through the Urban Community Conservation Act and that the city's adoption of HUD guidelines for disposition of renewal property through Ordinance No. 78-72 rather than those contained in the Urban Community Conservation Act was an unconstitutional use of home-rule power and therefore void.
1 As our recitation of the facts indicates, at the time of the passage of Ordinance No. 1651 repealing the ordinance creating a conservation board for the city, section 11-11-1 of the Illinois Municipal Code (Ill. Rev. Stat. 1971, ch. 24, par. 11-11-1) expressly empowered the corporate authorities of non-home-rule municipalities to pursue urban rehabilitation on their own behalf in the same manner as conservation boards could as agents of the municipalities under the Urban Community Conservation Act. Since the city of Carbondale was then a non-home-rule municipality, there was nothing preventing it from abolishing its former agent by repealing the ordinance creating it and acting in its own stead under section 11-11-1 of the Code. Consequently, the repeal of the ordinance creating the conservation board was valid and severed any connection between the urban renewal area and the Urban Community Conservation Act.
The defendants present alternative arguments in support of the validity of the transfers of the property. One argument is based on statutory compliance and the other on home-rule power.
In the statutory argument, defendants assert that section 18 of the Urban Renewal Consolidation Act of 1961 (Ill. Rev. Stat. 1977, ch. 67 1/2, par. 91.118) is applicable to the dispositions of these parcels of land through section 11-11-1 of the Illinois Municipal Code (Ill. Rev. Stat. 1977, ch. 24, par. 11-11-1), but argue that the parcels were properly sold in a private sale because they were not subject to the five-year public-sale restriction contained in section 18. Their specific contention is that the parcels were sold within five years after the city acquired title to all the property within the urban renewal area and thus ...