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03/29/96 HENRY COUNTY BOARD v. VILLAGE ORION

March 29, 1996

HENRY COUNTY BOARD, ORION COMMUNITY UNIT DISTRICT 223, WESTERN DISTRICT LIBRARY, ORION COMMUNITY FIRE PROTECTION DISTRICT, WESTERN TOWNSHIP AND THE BOARD OF TRUSTEES OF BLACKHAWK COLLEGE, PLAINTIFFS-APPELLEES,
v.
VILLAGE OF ORION, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of the 14th Judicial Circuit Henry County, Illinois. No. 94--CH--4. Honorable Jay M. Hanson, Judge Presiding.

Released for Publication May 9, 1996.

Present - Honorable Tom M. Lytton, Justice, Honorable Michael P. Mccuskey, Justice, Honorable John F. Michela, Justice. Justice Michela delivered the opinion of the court:

The opinion of the court was delivered by: Michela

The Honorable Justice MICHELA delivered the opinion of the court:

Plaintiff Henry County Board (County Board) and co-plaintiffs Orion Community Unit District 223, Western District Library, Orion Community Fire Protection District, Western Township, and the Board of Trustees of Blackhawk College, filed suit against defendant Village of Orion (Orion). Orion adopted ordinances creating a real property tax increment financing district (TIF district) and an attendant redevelopment plan and project pursuant to the Tax Increment Allocation Redevelopment Act (the Act). 65 ILCS 5/11--74.4--1 et seq. (West 1994). The County Board sought equitable relief to declare Orion's ordinances void and enjoin Orion's implementation of the TIF district and execution of its redevelopment project and plan. Following a bench trial the court found in favor of the County Board. Orion appeals. We affirm.

The Act enables municipalities to eliminate present and future blighted conditions from within its boundaries by diverting incremental real property tax revenues from taxing districts, e.g., school, park, sanitary and fire districts located within a proposed TIF district to fund public improvements. 65 ILCS 5/11--74.4--2(a), 2(c); 65 ILCS 5/11--74.4--3(t). The tax bases of a municipality and its taxing districts are enhanced through encouraging private investment within the proposed TIF district. 65 ILCS 5/11--74.4--2(b).

A proposed TIF district may be composed of blighted improved or blighted vacant realty, or of improved realty comprising a conservation area or as a combination blighted/conservation area. 65 ILCS 5/11--74.4--3(n), 3(a). To qualify as blighted improved property a combination of five or more of the following characteristics must exist:

"age; dilapidation; obsolescence; deterioration; illegal use of individual structures; presence of structures below minimum code standards; excessive vacancies; overcrowding of structures and community facilities; lack of ventilation, light or sanitary facilities; inadequate utilities; excessive land coverage; deleterious land use or layout; depreciation of physical maintenance; lack of community planning, is detrimental to the public safety, health, morals or welfare ***." 65 ILCS 5/11--74.4--3(a).

Blighted vacant realty qualifies as such if:

"(1) a combination of 2 or more of the following factors [is present]: obsolete platting of the vacant land; diversity of ownership of such land; tax and special assessment delinquencies on such land; flooding on all or part of such vacant land; deterioration of structures or site improvements in neighboring areas adjacent to the vacant land, or (2) the area immediately prior to becoming vacant qualified as a blighted improved area, or (3) the area consists of an unused quarry or unused quarries, or (4) the area consists of unused railyards, rail tracks or railroad rights-of-way, or (5) the area, prior to its designation, is subject to chronic flooding which adversely impacts on real property in the area and such flooding is substantially caused by one or more improvements in or in proximity to the area which improvements have been in existence for at least 5 years, or (6) the area consists of an unused disposal site, containing earth, stone, building debris or similar material, which were removed from construction, demolition, excavation, or dredge sites, or (7) the area is not less than 50 nor more than 100 acres and 75% of which is vacant, notwithstanding the fact that such area has been used for commercial agricultural purposes within 5 years prior to the designation of the redevelopment project area, and which area meets at least one of the factors itemized in provision (1) of this subsection (a) ***." 65 ILCS 5/11--74.4--3(a).

A conservation area is an improved area in which fifty percent or more of the structures equal or exceed thirty-five-years of age. 65 ILCS 5/11--74.4--3(b). Conservation areas are not blighted, but because of the presence of three or more of the following factors the area may become blighted:

"dilapidation; obsolescence; deterioration; illegal use of individual structures; presence of structures below minimum code standards; abandonment; excessive vacancies; overcrowding of structures and community facilities; lack of ventilation, light or sanitary facilities; inadequate utilities; excessive land coverage; deleterious land use or layout; depreciation of physical maintenance; lack of community planning, is detrimental to the public safety, health, morals or welfare ***." 65 ILCS 5/11--74.4--3(b).

In 1993, factors ranging from an inadequate sewer system, a perceived slow growth in economic development and a steadily declining population caused Orion to adopt ordinances authorizing a TIF district. A substantial portion of Orion was designated as the proposed TIF district and an expert determined the district qualified as a combination blighted and conservation area. Orion adopted ordinances authorizing the district and a redevelopment project and plan. The County Board filed suit contending that Orion's ordinances violated the Act. On May 9, 1995 the trial court issued a written opinion finding that Orion's ordinances violated the Act and enjoined Orion from implementing its ordinances and collecting funds. Orion filed no post-trial motions. The trial court entered its final judgment on May 23, 1995 and Orion filed a timely notice of appeal.

Orion argues the trial court erroneously found the County Board proved by clear and convincing evidence that the proposed TIF district was neither blighted nor a conservation area. Challenging Orion's ordinances required the County Board to overcome their presumptive validity by clear and convincing evidence. Castel Properties, Ltd. v. City of Marion, 259 Ill. App. 3d 432, 631 N.E.2d 459, 197 Ill. Dec. 456 (1994). Clear and convincing evidence is that "quantum of proof that leaves no reasonable doubt in the minds of the fact finder as to the truth of the proposition stated." Bazydlo v. Volant, 164 Ill. 2d 207, 213, 647 N.E.2d 273, 276, 207 Ill. Dec. 311 (1995). The fact finder's determinations will not be disturbed unless clearly contrary to the manifest weight of the evidence. Reed-Custer Community School District No. 255-U v. City of Wilmington, 253 Ill. App. 3d 503, 625 N.E.2d 381, 192 Ill. Dec. 421 (1993). The decision of the trial court is against the manifest weight of the evidence if a review of the record clearly establishes that the decision opposite to the one reached by the trial court was the proper result. In re Knapp, 231 Ill. App. 3d 917, 596 N.E.2d 1171, 173 Ill. Dec. 292 (1992). Thus, our inquiry is whether the trial court's decision that the County Board proved by clear and convincing evidence that the TIF district was neither blighted nor a conservation area is clearly contrary to the manifest weight of the evidence.

Eligibility for the Act's benefits rests upon a municipal determination that the proposed TIF district qualifies using the statutory factors enumerated above. In the case at bar, this determination was aided by both parties' reliance on guidelines promulgated by the Illinois Department of Revenue which, although intended to give guidance on sales tax increment financing districts, has an equal applicability to real property tax increment financing districts. See Wheeling v. Exchange National Bank of Chicago, 213 Ill. App. 3d 325, 333, 572 N.E.2d 966, 971, 157 Ill. Dec. 502 (1991) (tacitly approving the guidelines' use in real property tax increment financing cases). As the Department of Revenue guidelines suggest, qualifying statutory factors should be present to a meaningful extent and reasonably distributed throughout the proposed TIF district so that reasonable people will conclude that public intervention is necessary.

The trial court's opinion demonstrates it found that while isolated parcels of improved property were blighted the TIF district nonetheless did not qualify as a blighted and conservation area. For example, the trial court found Orion's characteristics study relied on loose or missing shingles, gravel drives, grass growing through the cracks in a driveway, surface cracking in driveways and sidewalks to establish the manifest presence of blighting factors within the proposed TIF district. The trial court further found twelve new building permits had issued for roofs, gutters and siding on properties Orion found blighted. Additionally, the trial court found the evidence insufficient to support a finding of inadequate utilities within the TIF district justifying the use of potential TIF revenues for a new sewer system. Finally, the accuracy of the characteristics study upon which Orion relied was called into question as testimony revealed various parcels of realty were either omitted or counted twice.

Our review of the record, including the photographic and demonstrative evidence, comports with the trial court's findings. For example, new building was occurring within the proposed TIF district signalling economic development. Further, photographs of the majority of the improved property indicates it was in routine disrepair common to many communities. While expert testimony clarified whether this disrepair statutorily qualified as "deterioration", "dilapidation" or "depreciation", we find the trial court assessed the weight of the experts' testimony and concurred with the County Board's expert view. We find no basis in the record to overturn the trial court's finding that the ...


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