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Board of Education, Pleasantdale School District No. 127 v. Village of Burr Ridge

June 30, 2003

BOARD OF EDUCATION, PLEASANTDALE SCHOOL DISTRICT NO. 107, COOK COUNTY, ILLINOIS, PLAINTIFF-APPELLEE
v.
THE VILLAGE OF BURR RIDGE, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County, Chancery Division No. 99 CH 02398 (transferred to Law Division) Honorable Thomas P. Quinn, Judge Presiding.

The opinion of the court was delivered by: Justice Hall

UNPUBLISHED

On September 28, 1998, defendant-appellant, the Village of Burr Ridge (Village), adopted ordinances numbers 854, 855, and 856, establishing a tax increment financing (TIF) district, along with a redevelopment plan and project, for approximately 85 acres of vacant land (Subject Property) located within the Burr Ridge Corporate Park in Burr Ridge, Illinois. It is undisputed that this tract of land is located in one of the wealthiest communities in Illinois.

On February 16, 1999, plaintiff-appellee, the Pleasantdale School District No. 107 (School District), filed a complaint for injunctive and declaratory relief against the Village. In the complaint, the School District claimed that the Village's ordinances did not comply with the provisions of the Tax Increment Allocation Redevelopment Act (TIF Act) (65 ILCS 5/11-74.4-1 et seq. (West 1994)), because the Village's legislative findings made in the ordinances that the statutory criteria necessary to establish the Subject Property as a blighted area were met was erroneous and not supported in fact. The School District claimed that if the TIF ordinances were implemented and the attendant redevelopment plan and project allowed to proceed, the School District and other overlying taxing districts would be irreparably harmed by the illegal and improper diversion of tax revenues from their taxing districts. The School District sought an order declaring that the ordinances were void as a matter of law and an injunction preventing the Village from implementing the ordinances and selling bonds or undertaking any obligations or making expenditures pursuant to the ordinances.

On March 15, 2000, the trial court entered an order denying the Village's motion for summary judgment. Thereafter, on September 17, 2001, the trial court entered an order granting the School District's motion for summary judgment on the ground that the Subject Property did not contain any of the blighting factors necessary to qualify it for TIF designation under the TIF Act. The trial court subsequently denied the Village's motion for rehearing to allow introduction of alleged new facts. The Village now appeals from the trial court's entry of summary judgment in favor of the School District and from denial of its motion for rehearing.

On appeal, the Village contends that: (1) the trial court erred in finding that the Subject Property did not contain any of the blighting factors necessary to qualify it for TIF designation under the TIF Act; (2) the trial court's "but-for" finding was in error; (3) in ruling on the School District's motion for summary judgment, the trial court erred by considering evidence that after the Village adopted the ordinances establishing the TIF district, two new developments were commenced in the proposed TIF district without the aid of TIF financing; and (4) the trial court erred by denying the Village's motion for rehearing to introduce newly discovered evidence. For the reasons that follow, we affirm.

FACTUAL BACKGROUND

The relevant facts are not in dispute. The Subject Property consists of approximately 85 acres of vacant land located immediately south of Interstate 55 and east of the County Line Road interchange, which divides Cook and DuPage Counties. The Village of Burr Ridge lies in both counties, but the Subject Property lies solely in Cook County. There is no dispute that establishing the Subject Property as a TIF district would enable the Village to more rapidly develop the Subject Property by allowing the Village to provide various financial incentives to selected developers to offset the higher Cook County commercial real estate taxes.

Prior to the present litigation, the Village had been advised that the Subject Property did not qualify as a TIF district. Steven Stricker, the Village administrator, sent a memo dated December 8, 1995, to the Village president and board, stating that he had spoken with Phil McKenna from the consulting firm of Kane, McKenna & Associates in order to "once again discuss the possibility of implementing a T.I.F. District in the Burr Ridge Corporate Park." In the memo, Stricker informed the Village that, "[a]fter reviewing the statutes we have determined once and for all that the Village of Burr Ridge would not be eligible to implement a T.I.F. District on the Corporate Park property."

Approximately two years later, Stricker sent a memo dated February 13, 1998, to the Village's economic development committee, informing the committee that developer Richard A. Barton sought to develop a Radisson Hotel and Conference Center (Burr Ridge Inn) on the Subject Property. The memo stated that Barton and his attorney had suggested that due to the tax disparities between Cook and DuPage Counties, the Village should look into the possibility of qualifying the Subject Property as a TIF district. The memo went on to remind the committee that, "[o]n at least three occasions over the past 8 years, the Village of Burr Ridge has looked seriously into the possibility of creating a Tax Increment Financing District for the Burr Ridge Corporate Park and, on all three occasions, the consultants hired to look into this issue determined that the Village did not qualify. The last discussion of this issue was in the fall of 1995."

Thereafter, the economic development committee recommended that the Village consider creating a TIF district for the Subject Property in order to create parity between Cook and DuPage Counties real estate taxes. The committee generated a chart illustrating the inequities of the tax structure between commercial property in Cook County and DuPage County, showing that businesses locating in Cook County pay almost double in taxes what they would pay in DuPage County. On April 13, 1998, the Village accepted Barton's request and awarded Camiros, Ltd., a contract to prepare a TIF eligibility study and a redevelopment plan and project for the Subject Property.

The Camiros eligibility study was undertaken in April and May 1998, and completed in July 1998. The Camiros study found that pursuant to the TIF Act, growth and development of the Subject Property had been impeded by four blighting factors: diversity of ownership, flooding, obsolete platting, and tax delinquencies. After reviewing the Camiros study, the Village's legal counsel sent a letter dated July 10, 1998, to the Village president stating, "[i]n our opinion, this is a 'good' TIF in that it will encourage desired development which will be in the best interests of the Village and all of the underlying taxing districts. However, at the same time it is our opinion that this is a 'weak' TIF in terms of meeting the required statutory criteria. The reason for this opinion is that compliance with each of the statutory criteria identified in the Camiros report appears to be rather marginal."

On August 3, 1998, a joint review board hearing was convened to determine whether the four blighting factors identified in the Camiros eligibility study were present on the Subject Property. The hearing was attended by representatives from some of the taxing districts that would be affected by the proposed TIF. At the conclusion of the hearing, the board found by a formal vote that the eligibility factors necessary to establish the Subject Property as blighted under the TIF Act were not present.

On September 14, 1998, a public hearing was held regarding the proposed TIF district. On September 28, 1998, the board of trustees of the Village voted to adopt ordinances numbers 854, 855, and 856, establishing a TIF district and a redevelopment plan and project for the Subject Property.

ANALYSIS

I. TIF Act - Statutory Blighting Factors

On January 10, 1977, the TIF Act became effective in Illinois. See People ex rel. City of Canton v. Crouch, 79 Ill. 2d 356, 360, 403 N.E.2d 242 (1980). The Illinois legislature adopted the TIF Act to provide municipalities with the means to eradicate blighted conditions by developing or redeveloping areas so as to prevent the further deterioration of the tax bases of these areas and to remove the threat to the health, safety, morals, and welfare of the public that blighted conditions present. 65 ILCS 5/11-74.4-2(a),(b),(c) (West 1994); People ex rel. City of Canton, 79 Ill. 2d at 360; Castel Properties, Ltd. v. City of Marion, 259 Ill. App. 3d 432, 433-34, 631 N.E.2d 459 (1994); Board of Education of Community High School District No. 218 v. Village of Robbins, 327 Ill. App. 3d 599, 602, 765 N.E.2d 449 (2001). The TIF Act enables a municipality to eliminate blighted conditions existing within its boundaries by allowing the municipality to collect real property tax increment revenues from local taxing districts such as schools, park, sanitary and fire districts located within the TIF district and divert these revenues to fund TIF development projects or other ancillary expenses within the TIF district. 65 ILCS 5/11-74. 4-2(a), (c), 11-74.4-3(t) (West 1994); People ex rel. City of Canton, 79 Ill. 2d at 369; Henry County Board v. Village of Orion, 278 Ill. App. 3d 1058, 1060, 663 N.E.2d 1076 (1996). In essence, TIF allows a municipality to use incremental tax dollars or public funds to fund redevelopment of blighted areas.

To be eligible for tax increment allocation financing, a municipality must first establish that the proposed redevelopment area meets the statutory criteria for designation as a "blighted area," a "conservation area," or a combination thereof or an "industrial park conservation area." 65 ILCS 5/11-74.4-3(a), (b), (c), (d), (n) (West 1994). In the present case, the issue concerns whether the Subject Property qualifies as a "blighted area." Here, the Subject Property consists entirely of vacant land. Before vacant land can be deemed blighted, a number of statutory blight factors must be established, some of which are not applicable under the factual circumstances in this case. See 65 ILCS 5/11-74.4-3(a) (West 1994).

Under the facts in this case, in order for the Subject Property to be deemed blighted, the Village was required to establish that the growth and development of the property as a taxing district was impaired by a combination of two or more statutory blight factors. These blight factors are: "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." 65 ILCS 5/11-74.4-3(a) (West 1994). The Village also claimed that the Subject Property should be deemed blighted on the ground that immediately prior to becoming vacant it qualified as a blighted improved area under the statute. Thus, under the factual circumstances in this case, the Subject Property would be eligible for TIF financing if at least two or more of the blight factors were established or the Subject Property qualified as a blighted improved area before becoming vacant.

The Village first contends that in granting the School District's motion for summary judgment, the trial court failed to give appropriate deference to the Village's legislative findings in the ordinances and erroneously ignored the ...


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