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07/27/89 the City of Oakbrook v. La Salle National Bank

July 27, 1989

THE CITY OF OAKBROOK TERRACE, PLAINTIFF-APPELLANT

v.

LA SALLE NATIONAL BANK, AS TRUSTEE, ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

542 N.E.2d 478, 186 Ill. App. 3d 343, 134 Ill. Dec. 299 1989.IL.1166

Appeal from the Circuit Court of Du Page County; the Hon. William E. Black, Judge, presiding.

APPELLATE Judges:

JUSTICE LINDBERG delivered the opinion of the court. DUNN and INGLIS, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LINDBERG

Plaintiff, City of Oakbrook Terrace (City), appeals from an order of the circuit court of Du Page County dismissing the City's complaint to condemn the property held in trust by La Salle National Bank for the benefit of defendant, Don Keller. The City raises two issues on appeal: (1) whether the City had authority to condemn the subject property; and (2) whether the City made a good-faith offer to purchase the property.

The parties stipulated to the following facts. The City is a municipal corporation organized pursuant to the laws of the State of Illinois. Keller is the sole beneficiary of La Salle National Bank trust No. 49834. The real property at 17W741 Butterfield Road, Oakbrook Terrace, Illinois (the property), contains approximately 22,500 square feet. The City hired an appraiser who, if called to testify, would state that he appraised the property on July 7, 1987, and in his opinion the fair cash market value was $80,000. In a letter dated September 2, 1987, the city attorney sent Keller an offer to purchase the property. Keller did not respond to the letter. Keller has maintained a sales price of $17 per square foot for the property. After the September 2, 1987, letter, the City did not make any further offers to purchase the property, nor did it make any attempt to agree or engage in negotiations with Keller.

On January 6, 1988, the City filed a petition to condemn the property alleging that it was "authorized to acquire a site for a Community Building by condemnation" and that the acquisition of the property was "convenient, required and needed for a site for a Community Building." The complaint also alleged that the parties were unable to agree on the amount of compensation. The City attached a copy of an ordinance passed by the Oakbrook Terrace city council, which provided that "an Historic and Municipal Building" be established on the property; that it was "necessary and desirable" for the City to acquire title to and possession of the property; that the city attorney was authorized and directed to negotiate with the owner of the property for its purchase; and that if the city attorney was unable to agree with the owners on the amount of compensation, then title to and possession of the property "shall be acquired by the City of Oakbrook Terrace through condemnation." The city clerk certified that the ordinance was passed at an authorized meeting of the city council on October 27, 1987. The condemnation complaint expressed that the City was proceeding pursuant to the authority granted it in section 11-63-5 of the Illinois Municipal Code (Ill. Rev. Stat. 1987, ch. 24, par. 11-63-5).

Keller filed a traverse and motion to dismiss, alleging: (1) the City was not authorized to acquire the property by eminent domain proceedings; (2) the ordinance did not authorize the City to acquire the property for any purpose authorized by statute; (3) the ordinance was "ineffective in law to vest the power of condemnation in plaintiff or to authorize plaintiff to condemn"; and (4) the City did not make a bona fide attempt to agree on the amount of compensation to be paid to Keller for the property.

The trial court granted Keller's traverse and dismissed the complaint with prejudice. In a letter of opinion, the court explained its reasons for granting Keller's motion. First, the court decided that section 11--63--5 must be read in conjunction with the other sections of division 63 of article 11, in particular section 11--63--2, which requires a referendum when a municipality seeks to establish and levy a tax for a community building. The court stated:

"To argue that Section 11--63--5 should stand apart from the rest of Section 63 so that the corporate authorities may acquire a site for community purposes without a referendum and yet may not establish, maintain or equip such a community building and the further reference to real property found in [section 11--63--3], leads me to conclude that a referendum is necessary before the plaintiff in this case can proceed to condemn the property."

The court also found that the offer embodied in the September 2 letter "was a hollow one in view of the fact the ordinance authorizing eminent domain had not yet been enacted." In addition, the court decided that because the ordinance provided that the property was to be acquired for "historic and municipal purposes," the property would first have to be designated a historic site before the City could condemn the property. See Ill. Rev. Stat. 1987, ch. 24, par. 11-48.2-1 et seq.

The City's first contention on appeal is that the trial court erred when it construed sections 11-63-1, 11-63-2, and 11-63-3 with section 11-63-5 when determining whether the City had authority to condemn the property. Section 11-63-1 provides that municipalities may "establish, equip, maintain and operate a community building or buildings . . . and may levy annually a tax . . . for these purposes." (Ill. Rev. Stat. 1987, ch. 24, par. 11-63-1.) Under section 11-63-2, a municipality:

"ay not exercise the authorities granted by Section 11-63-1 until the question of establishing, equipping, maintaining and operating a community building or buildings and the levying of an annual tax therefor . . . is submitted to the electors of such municipality . . .." (Ill. Rev. Stat. 1987, ch. 24, par. 11-63-2.)

Under section 11-63-3, the municipality which voted for the proposition may issue bonds "for the acquisition or construction, or both, of such property, either real or personal, or both, as may be necessary to establish, equip, operate and maintain a community ...


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