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Charlton v. Champaign Park District





Appeal from the Circuit Court of Champaign County; the Hon. George S. Miller, Judge, presiding.


The plaintiffs in this case are taxpayers residing within the boundaries of defendant, Champaign Park District (Park District). On March 5, 1982, they filed a complaint in the circuit court of Champaign County seeking a declaratory judgment declaring to be invalid a purported agreement between defendant and Group VI, Ltd., assignor of all its rights and obligations under the agreement to intervenor-defendant, Rainbow Bend-Champaign, Ltd. (Rainbow Bend). The agreement provided for Group VI to construct, own, operate and charge admission to patrons using a waterslide to be built by Group VI at Centennial Park in Champaign, a public park owned and operated by the Park District. Plaintiffs also sought preliminary and permanent injunctions prohibiting construction of the waterslide and its operation under the terms of the agreement.

The circuit court ordered a preliminary injunction to issue on March 8, 1982. Rainbow Bend was allowed to intervene as assignee of Group VI. On March 18, 1982, after a hearing on the merits, the circuit court dissolved the interlocutory judgment and denied all relief requested by plaintiffs. Plaintiffs appeal, asserting the Park District acted beyond its authority in attempting to contract with Rainbow Bend because (1) the Park District has only the powers granted to it by statute and no power to enter into a contract of this nature has been so granted, (2) the purported contract violates the statutory mandate that the Park District control its property, and (3) in purporting to enter into the contract, the Park District violated a statutory requirement that it advertise for bids before entering into a contract of this nature. We affirm.

The evidence was mostly undisputed and need not be recited at length here. Pertinent details will be mentioned in discussion of the legal points raised. The document in dispute was entitled "Concession Agreement." After the assignment and an amendment made before the hearing on the merits, the agreement provided for Rainbow Bend to build, own and operate the waterslide and related concessions, collecting the admission and concession charges and remitting 10% thereof to the Park District. The size of the area for the project was estimated to be less than 1 1/2 acres. The length of the agreement was stated to be slightly over five years with Rainbow Bend given options to renew for five three-year periods. The agreement also provided that Rainbow Bend might terminate it on the first of any calendar year, upon proper notice, if it could "establish to the reasonable satisfaction of the Park District that the continued operation of the Water Slide is no longer economically feasibile."

The parties agree that park districts, like other non-home-rule units of local government, can only exercise those powers expressly granted to them by statute or necessarily implied from such a grant. (People ex rel. Nelson v. Beu (1949), 403 Ill. 232, 85 N.E.2d 829.) The Park District Code (Ill. Rev. Stat. 1979, ch. 105, par. 1-1 et seq.) does not expressly grant to park districts the power to enter into leases, licenses, or concessions with a private entity for the operation on district property of a business of profit to the private party. To support the holding of the trial court that the Park District had power to enter into the "Concession Agreement," the Park District and Rainbow Bend rely upon the implications of several express statutory grants of authority to park districts. Section 8-10 of the Code (Ill. Rev. Stat. 1979, ch. 105, par. 8-10) gives park districts power to establish and maintain various recreational programs and facilities including swimming pools and states that the grant of power is not a limitation on the power to provide other recreational facilities. Section 8-1(a) of the Code (Ill. Rev. Stat. 1979, ch. 105, par. 8-1(a)) permits park districts "to contract in furtherance of any of its corporate purposes."

Plaintiffs concede the Park District has power under section 8-10 to itself build and operate the waterslide as a recreational facility and to charge admission for its use. Plaintiffs dispute that the Park District has power to contract with others to operate the slide and receive admission charge for it. No Illinois cases are directly in point. However, plaintiffs have been unable to present any case from any jurisdiction holding that legislation similar to that here has been insufficient to authorize the granting of concessions or licenses for similar activity by any municipality. We conclude the cases cited by parties-defendant here are sufficient to support their contention that the power of the Park District to enter into the agreement here was necessarily implied from the park district act.

We consider People ex rel. Hoyne v. Chicago Motor Bus Co. (1920), 295 Ill. 486, 129 N.E. 114, to be the most significant case cited. In a quo warrantor proceeding, the supreme court upheld the power of a park district, acting through its commissioners, to license, for a fee, a corporation to operate buses on and through the streets within the park lands. The supreme court deemed the grant to the district to generally regulate the park land and the specific grant to provide for streets and alleys to be sufficient to imply the power to issue such licenses.

The case of Hagerman v. South Park Commissioners (1934), 278 Ill. App. 33, is also helpful. An action was brought by one who had obtained a contract for concessions from a park district seeking to have money paid by him on the contract returned. The contract provided the district would purchase concession stands, which were in the park, from the present concession holders and resell them to the plaintiff at the same price. In seeking to rescind the contract, the plaintiff claimed the park commissioners lacked authority to enter into a contract for concessions. The appellate court affirmed a judgment for the defendants ruling that although the commissioners' powers were to be strictly construed, "[t]he agency employed by the defendant was to carry out a proper activity of the defendant as a municipal entity." 278 Ill. App. 33, 40-41.

The Hagerman court drew analogy to the case of Furlong v. South Park Commissioners (1926), 320 Ill. 507, 151 N.E. 510, where the court upheld the power of the commissioners to build museums. The Hagerman court stated that "whether the contract in question [was] to be construed to be a sale, lease, or a license" was immaterial. (278 Ill. App. 33, 41.) However, the Hagerman court also deemed significant the fact that although attacking the validity of the contract, the plaintiff had enjoyed benefits of the contract and remained in possession of the stands.

Neither Kurek v. Pleasure Driveway & Park District (7th Cir. 1977), 557 F.2d 580, nor People ex rel. Carroll v. Village of Lakewood (1938), 368 Ill. 209, 13 N.E.2d 275, cited by both parties-defendant, pass directly upon the power of the Park District to enter into concession agreements. Dictum in Kurek is marred by an apparent misapprehension of that court that section 8-16 of the Park District Code (Ill. Rev. Stat. 1979, ch. 105, par. 8-16) expressly authorizes park districts to lease its real estate to others.

• 1 We need not hold that a park district has even implied power to lease its real estate in order to uphold the instant agreement because we deem the agreement to merely grant a license to Rainbow Bend. A license differs from a lease in that the former merely gives the licensee a right to enter upon the licensor's land and use it for a specific purpose. The licensor still has legal possession of and control over the premises. In a lease, the lessee possesses an estate and controls the property against the lessor and all the world. (Mueller v. Keller (1960), 18 Ill.2d 334, 164 N.E.2d 28; Jackson Park Yacht Club v. Department of Local Government Affairs (1981), 93 Ill. App.3d 542, 417 N.E.2d 1039; In re Application of Rosewell (1979), 69 Ill. App.3d 996, 387 N.E.2d 866.) Whether the agreement entered into by the parties is a license or a lease is partly a question of the intent of the parties. Jackson Park Yacht Club.

The case of In re Application of Rosewell (1979), 69 Ill. App.3d 996, 387 N.E.2d 866, is closely on point. In Rosewell, the sole issue before the court was whether agreements between the city of Chicago and private companies for the operation of parking facilities were leases subject to real estate taxation. The agreements between the city and the private operators transferred possession of the garages to the operators. The garage operators had to have prior written approval of the city before signs could be posted or before commercial vehicles could be allowed to park. The agreement set out a schedule of parking fees and required the garages to be open 24 hours per day, seven days per week. The city also had the power to approve the design and color of the uniforms worn by the operator's employees.

The trial court had held that the agreement was a lease because the operators had exclusive possession of the premises. The appellate court disagreed, holding that "an agreement which merely entitles one party to use property subject to the management and control of the other party does not constitute a lease, but rather grants only a license [citations]." (69 Ill. App.3d 996, 1001-02, 387 N.E.2d 866, 870.) The appellate court found that the agreements were not intended to transfer possession of the real estate, coupled with sufficient control necessary to create a leasehold interest.

The concession agreement as amended grants the power to "construct, operate and manage" the waterslide and to collect the proceeds. As in Rosewell the agreement also states that possession is given to the licensee. However, as we subsequently explain, the documents give no indication the Park ...

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