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Ford City Bank & Tr. Co. v. County of Kane

OPINION FILED MAY 17, 1983.

FORD CITY BANK AND TRUST COMPANY ET AL., PLAINTIFFS-APPELLANTS AND CROSS-APPELLEES,

v.

THE COUNTY OF KANE ET AL., DEFENDANTS-APPELLEES AND CROSS-APPELLANTS.



Appeal from the Circuit Court of Kane County; the Hon. John A. Krause, Judge, presiding.

JUSTICE VAN DEUSEN DELIVERED THE OPINION OF THE COURT:

On December 4, 1980, plaintiffs filed a complaint against defendants seeking an injunction, declaratory judgment, and other relief primarily on the grounds that Ordinance No. 80-37, adopted by defendant Kane County on March 11, 1980, was invalid. After a bench trial, the trial court entered an order on March 25, 1982. That order upheld the validity of Ordinance No. 80-37 amending the zoning ordinance of Kane County; restricted the use of the subject property, a restricted landing area, to no more than 155 based airplanes; and granted plaintiffs the right to apply to defendant for such other use or intensification of the use according to the ordinance of defendant.

It is not clear from the record how many planes are now based at the Landings. However, there is presently space for 99 hangar units in 14 hangar buildings. Twelve of the buildings are constructed on the north side of the runway, and two buildings are constructed on the south side of the runway.

Plaintiffs appeal praying that the order of March 25, 1982, be modified in part and reversed in part to provide: that Ordinance No. 80-37 be declared unconstitutional on its face and as applied to the subject property; that plaintiffs are entitled to use the subject property for a restricted landing area for the basing of not less than 276 aircraft; that plaintiffs are entitled to use the entire area of the subject property, which was accorded a special use permit approved September 9, 1969, for a restricted landing area; and that damages of $4,500,000 be awarded or in the alternative the cause be remanded for a new trial on the question of damages.

Defendants cross-appeal from the March 25, 1982, order to the extent that order adjudged that plaintiffs are entitled to use the subject property as a restricted landing area basing up to 155 aircraft. Defendants seek to limit the number of aircraft to the number based there as of March 11, 1980, and such additional aircraft as are housed in hangars lawfully under construction on March 11, 1980.

This is an action brought by the Ford City Bank as trustee and mortgage holder of a part of the property developed as "The Landings," a condominium airport in unincorporated Kane County. The plaintiffs also include Barko Development Corporation, the beneficiary of the trust, and developer of the airport; the Landings Airstrip Corporation, owner of the landing strip; and the Landings Airport Condominium Owners Association, which consists of the owners of the 99 hangars at the airport. The airstrip corporation is wholly owned by the condominium association.

The subject property is the Landings Airport, a 53.7-acre private condominium airport. The surrounding area is zoned for agricultural and light industrial use. Adjoining the airport to the south are approximately 104 acres classified for single-family homes and developed by the plaintiffs.

On September 9, 1969, defendants adopted an ordinance granting plaintiffs' predecessor in title a special use for the 53.7 acres to be used as a restricted landing area. The ordinance did not contain restrictions with respect to the number of aircraft to be based at the airport. The underlying zoning for the landing area remained F-Farming district. On October 10, 1972, an ordinance granting single-family, R-1, zoning for the adjoining 104 acres was adopted. On June 8, 1973, a final plat for 41 lots was approved by the county and recorded with an additional 33 lots recorded on June 13, 1978. At the time of the trial, 25 homes had been built in the residential portion and 53 lots had been sold.

In 1972, a five-member group, including plaintiff Kovac, who is now president of Barko Development Corporation, acquired the airport and adjoining residential property. In April 1972, a notice of landing area proposal was filed with the FAA indicating that the anticipated number of aircraft in the next five years would be 15 multi-engine aircraft and 300 single-engine aircraft. FAA approval of the air space was obtained in 1972. That approval did not refer to the number of hangars which could be placed on the subject property. On December 13, 1972, the Illinois Division of Aeronautics issued a certificate to the Landings Airstrip Corporation to operate the airport. No reference was made on that certificate as to the number of hangars that could be built on the subject property.

Also in 1972 and 1973, defendants submitted plans to the county for the development of the airport. An early alternative plan was to tie the sale of hangars to lot ownership. That plan was abandoned as economically unfeasible. Another alternative plan proposed a hangar area on the north side of the runway together with a grass tie-down area and homes on the south side. This plan, dated March 12, 1972, showed 10 hangar buildings. (Referred to as defendants' exhibit No. 14 in the March 25, 1982, judgment order.) A subsequent plan dated May 25, 1972, also showed 10 hangar buildings on the north side of the runway with a grass tie-down area on the south side of the runway. (Referred to as defendants' exhibit No. 15 in the March 25, 1972, judgment order.)

Finally, a plan dated January 25, 1973, prior to plaintiffs' acquisition of the property, showed 39 buildings located on both sides of the runway, and according to plaintiff Kovacs, became the operative plan after Barko purchased the property in June 1973. A detailed drawing of the plan showed 17 buildings on the north side of the runway and 22 buildings on the south side. However, it is not clear from this plan how many individual hangar spaces were to be incorporated into these 39 buildings. Moreover, none of the three plans indicated how many individual hangar spaces were to be incorporated into the proposed hangar buildings or how many planes were to be based at the Landings.

Plaintiffs submitted the plans dated March 12, 1972, and May 25, 1972, to the county in 1972. Hangars in these plans are shown on the north side of the runway only. According to the testimony of Frank Olson, director of the Platting and Zoning Division of the Kane County Development Department, plaintiffs' plan dated January 25, 1972, was not in the Kane County files relating either to the airport or the subdivision. Phillip Bus, director of Kane County Development Department, testified that the county never evaluated plaintiffs' January 25, 1973, plan or any other site plan showing accommodations for 276 or more based aircraft at the Landings. Further, on cross-examination, Burrell Coppernoll, an employee of the Illinois Department of Transportation, Division of Aeronautics, testified that he had not seen the ultimate plan depicted by the January 25, 1972, site plan. The function of that division is to make sure that the physical standards for landing areas in the State are safe. The only testimony regarding submission of this site plan to the county was by plaintiff Kovacs, who was impeached by his prior inconsistent statement that it had not been submitted to the county.

According to the testimony of Frank Olson, there were no discussions prior to the summer of 1979 between anyone in the Kane County Development Department and anyone with Barko or in ownership of the Landings about the possibility of 276 hangars or 300 based aircraft. Further, Olson testified that all engineering discussions and studies were based on defendants' plan dated May 25, 1972, showing hangars on the north side of the runway only.

Press releases and brochures were released by Barko in 1972 and 1973 (referred to as defendants' exhibit No. 2 in the March 25, 1982, judgment order). The brochure for potential lot purchasers was a conceptual drawing showing that land had been set aside for 10 hangar buildings on the northwest side of the runway. The south side showed a proposed grass tie-down area only and no hangars. Nothing for distribution to potential lot buyers showed hangars on both sides of the runway. Moreover, plaintiffs' January 25, 1973, plan showing 39 buildings located on both sides of the runway was not released to the public.

On June 11, 1973, Ford City Bank as trustee acquired the airport and the adjacent residential property. Barko acquired the beneficial ownership under the trust. The initial loan by Ford City Bank to Barko was for $1,500,000. The loan proposal from the bank to Barko showed that the airport would include 112 separate hangars and sufficient tie-down space for approximately 175 airplanes. The loan was secured by the land itself, including 234 acres divided into four separate tracts.

The 1973 loan was not paid back, and the bank considered foreclosure. The bank made additional loans in 1975 and 1976 of approximately $2,500,000. The total loan was $3,500,000 for the airport and $500,000 for the single-family portion of the property. At the time of the trial, there was a balance of approximately $1,870,000 outstanding.

In 1974, Barko's attorney sent a letter to the Kane County Development Department explaining a proposal to change the ownership of the subject property to condominium units. There was no mention of intensity level. In response to that letter, Marvin Dunn, Kane County Assistant State's Attorney, indicated that the condominium format would be permissible. There was no mention of an intensity level in that opinion.

In 1976, construction of the hangars began. All construction of the hangars had to be approved by the Division of Aeronautics. Approval was given by the division on three different occasions up to March 15, 1978. Of the 14 buildings currently on the site, all but two ranch or executive hangars are on the north side of the runway. The ranch or executive hangars are on the southeast side of the runway. The airport is presently improved with 3,100 feet of paved and lighted airstrip, taxiways, fuel pumps and related facilities costing $1,970,000. Individual hangars range in price up to $36,000 per hangar. Each hangar was constructed pursuant to a building permit issued by the county. At the time of trial, a total of 87 of the 99 existing hangars had been sold.

Later, the 1976 loan expired because of an inability to sell sufficient hangars to amortize the debt. Foreclosure was instituted in 1979 or 1980 and a settlement agreement was executed. The bank testified that it recently decided that 250 hangars needed to be sold.

There were no representations made to the credit manager at the bank by anyone at Kane County relating to the approval of 276 or 300 or any specific number of based aircraft, and there was nothing in the bank's file indicating county approval of a project to build hangar units for a specific number of airplanes.

In September 1976, plaintiff Kovacs received a letter from Valjean Smith, of the Division of Aeronautics, requesting documentation of the county's approval for basing 300 aircraft on the strip. In response, Kovacs sent the notice of landing area proposal he had originally filed with the FAA in which he projected 315 based aircraft at the Landings. However, Kovacs had received nothing from the FAA indicating that 300 planes would be acceptable.

Prior to 1976, there was no notice given and there were no hearings held prior to the issuance of orders by the Division of Aeronautics authorizing construction of hangars currently in place on the north side of the runway. Since that time, the division, as a matter of form, has sent out notices and given people an opportunity to comment. Division procedures provide that surrounding property owners and government bodies are to receive such notice. It is unclear why notice was not originally given.

In 1977, sale of the single-family lots commenced. The sales office was at the airport in front of the first hangar on the north side of the runway. At the time of the first sale of the lots, about 14 hangars were up. The runway was in as well as the taxiways. Before the first house was built, 48 hangars were in place. Plaintiff Kovacs testified that he informed purchasers with respect to the use of the airport and that the airport would be fully developed.

In 1979, an application for four more buildings containing 24 additional individual hangar units was filed with the Division of Aeronautics. The proposed hangars were projected for the south side of the runway. A plat of survey, dated August 25, 1978, showing the Landings Airport, was submitted to the Division of Aeronautics with the application. The plat was the most recent in the division file and the only one showing proposed construction on the southwest side of the runway. However, the division had no drawings or plats on file showing hangars or proposed hangars to house 276 or more airplanes.

The application for additional hangars was dropped because of complaints and because the new board of the condominium association felt that the north side should be developed before the south side. The condominium association and the Landings Airstrip corporation had determined at a meeting of the directors on November 3, 1979, that construction on the south side of the runway could pose a safety hazard. On January 18, 1980, plaintiff Kovacs represented to the condominium association that he would not build on the southwest ...


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