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Leisuretime Recreation Center Vi, Inc. v. Byrne





APPEAL from the Circuit Court of Cook County; the Hon. JAMES C. MURRAY, Judge, presiding.


This court has been asked to review the trial court's issuance of a writ of mandamus against the mayor of Chicago in her capacity as local licensing commissioner. Petitioner, Leisuretime Recreation Center, sought the writ to compel defendant mayor to issue a license to Leisuretime to operate an arcade on Western Avenue in Chicago. Petitioner contends that it had expended considerable sums in reliance upon the impending issuance of the license and that the mayor should be estopped to deny her approval of Leisuretime's application. The mayor maintains that during the entire time when petitioner's expenditures were being made there existed in the city of Chicago an ordinance prohibiting the operation of an arcade in the location proposed by petitioner. She thus denies that petitioner established a clear right to the issuance of the writ of mandamus.

On September 7, 1979, Leisuretime filed a petition in the circuit court of Cook County for a writ of mandamus. Petitioner alleged that it had applied on December 18, 1978, for a "Public Place of Amusement — Class II — Arcade" license as provided for in chapter 104.2 of the Municipal Code of Chicago. Prior to the time petitioner applied for its arcade license, the amended ordinance had been referred to the City Council and was thus under consideration for passage, to limit arcades within 1000 feet of residential areas; the ordinance passed made it 200 feet. (The original formulation was as a zoning ordinance; as passed, however, it was designated a licensing ordinance.) The petition set out the steps which Leisuretime had undertaken in reliance upon the eventual issuance of the license. Petitioner maintained that it had fulfilled all requirements of chapter 104.2 and therefore was entitled to a writ of mandamus compelling the mayor to grant the license.

At the first hearing on the petition, the city denied that Leisuretime had a clear right to the writ, stating that "the zoning law of the city of Chicago was changed, and that change would prohibit the use of an arcade in that zoning district where the premises are located." The court, however, indicated that it was aware of cases on estoppel against a municipality and suggested that the instant case might fall within that exception. Before ruling, the court announced that it needed to hear evidence on the extent of reliance.

At the ensuing evidentiary hearing, the parties stipulated to the following facts. On December 16, 1978, petitioner applied for a Class II arcade license for proposed operation at 3641-43 North Western Avenue. At that same time, the zoning department approved Leisuretime's application on the basis that an arcade was a permitted use in the zoning area (C2-2) of which 3641-43 North Western Avenue was a part. On January 22, 1979, the police department, following an investigation of the individuals involved in the Leisuretime Corporation, approved the application. On February 15 the building department issued a permit to E&S Construction to remodel the premises on Western Avenue to accommodate an arcade. On March 23 the building department inspected the premises and approved the application. Finally, on March 30, the fire department inspected the premises and issued its approval.

Following the presentation of the above stipulated facts, petitioner called Earl Malisoff, the secretary/treasurer of Leisuretime to the stand. He testified that he had tendered $500 and an application for an arcade license. The officers of the corporation determined that it would be necessary to remodel the Western Avenue location because it had previously been maintained as a flower shop. Petitioner employed a general contractor, E&S Construction Company, who submitted plans to the building department. After the plans were submitted, the permit was issued; remodeling proceeded and was eventually approved by the various city inspectors. The witness detailed expenditures of approximately $21,300. He also testified that if the building permit had not been issued, he would not have made the expenditures. On cross-examination, Malisoff was questioned about the contingency arrangement under which the Western Avenue location was leased. He stated that Leisuretime had entered into a five-year lease with a 30-day contingency escape clause which would allow Leisuretime to secure approval from the zoning and police departments prior to being bound by the lease. If that approval were not forthcoming, Leisuretime had the right to cancel the lease and all advanced funds would be refunded. The lease was dated December 17, 1978. Counsel for the city pointed out that the approval by the police department did not occur until January 22, more than 30 days after the lease was executed. Malisoff admitted that Leisuretime had not exercised its right to cancel even though it could have on the 30th day. Leisuretime instead allowed itself to be bound by the five year lease prior to the approval by the police department.

The witness then testified that in the early part of April 1979, he went to a meeting at the office of the license officer for the city of Chicago, Sergeant Gavin. Sergeant Gavin showed him a copy of an ordinance that had been passed by the city of Chicago on January 19, 1979. The ordinance read that an arcade could not be maintained within 200 feet of a residential zone. Sergeant Gavin also informed him that Leisuretime would not receive a license because the location on Western Avenue was within 200 feet of a residential area. Malisoff conceded that the remodeled building could be used for a business other than an arcade.

Following this testimony, the trial court reviewed the ordinance in question:

"104.2-9.1. No person shall operate any arcade in any place within two hundred feet of any church, hospital, building operated * * * as a grammar or secondary school, or residential zoning district, unless such place is licensed as an arcade before the establishment of the church, hospital, educational institution, or zoning district." (Chicago, Ill., Council Jour. 9538 (Jan. 19, 1979).)

Section 2 of the ordinance of January 19, 1979, provides:

"This ordinance shall be in full force and effect from and after its passage." (Chicago, Ill., Council Jour. 9538 (Jan. 19, 1979).)

The trial court first questioned the constitutionality of the ordinance. It then ruled that since petitioner had been issued a building permit and had spent monies in reliance upon that permit, petitioner fell within the case law exception estopping the city from denying the arcade license. The court also stated:

"I recognize the right of the City Council to rezone property; but when they do it, I don't think they can do it in violation of people's rights to rely on the ordinance."

From the trial court's order issuing a writ of mandamus against the city of Chicago and its licensing official, the ...

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