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Sunnybrook LP v. City of Alton

United States District Court, S.D. Illinois

November 13, 2019

SUNNYBROOK LP, Plaintiff,
v.
CITY OF ALTON, ILLINOIS, an Illinois Municipal Corporation, and BRANT T. WALKER, individually and in his official capacity as the Mayor of the City of Alton, Illinois, Defendants.

          MEMORANDUM AND ORDER

          NANCY J. ROSENSTENGEL CHIEF U.S. DISTRICT JUDGE

         This case is before the Court on the Motion to Dismiss filed by Defendants City of Alton, Illinois, and Brant T. Walker (Doc. 17), as well as the Motion to Strike filed by Plaintiff Sunnybrook LP (Doc. 28). For the reasons set forth below, both motions are denied.

         Background

         The Court accepts the following facts as true for purposes of Defendants' motion to dismiss. The City of Alton is home to approximately 27, 000 residents, 67 percent of which are White and 30 percent of which are African-American, Hispanic or Latino, or American Indian (Doc. 7, p. 6). The median household income is $37, 000; approximately 25 percent of the population lives below the poverty level (Id.). While about 60 percent of Alton residents own their homes, most of those people-82 percent-are White (Id.). Minorities, on the other hand, make up 38 percent of Alton's renter population (Id.).

         Plaintiff Sunnybrook LP is the developer of the “Community of Sunnybrook, ” a proposed affordable housing development to be built in the City of Alton (Id., p. 5). The project consists of 10 multiple family structures totaling 40 units. A portion of the development project would be financed through the federal Low-Income Housing Tax Credit (“LIHTC”) program, with 11 units subsidized by project-based vouchers and a percentage of those reserved for veteran applicants (Id.). After a 15-year period of leasing the units, as required by the LIHTC program, the units would be available for sale, thereby increasing home ownership (Id.).

         In early to mid-2017, a partner of Sunnybrook approached the City of Alton and its mayor, Brant Walker, for support for the Sunnybrook development (Id., p. 2). Defendants initially appeared supportive of the development and signed a Memorandum of Understanding that confirmed Sunnybrook was a LIHTC project and the units would be available for rent for 15 years (Id., p. 8). Just one day after Sunnybrook received approval for LIHTC funding, however, Walker withdrew the City's support for the development (Id., p. 9). A meeting was held on May 17, 2018, during which Walker and other officials expressed concerns about the development density, building and site layout, parking, and access, even though the project already met or exceeded the City's zoning standards (Id.). In response to the City's concerns, Sunnybrook agreed to make major changes to the development, including smaller structural footprints, bigger side yards, more parking, and wider sidewalks. These modifications added about $500, 000 to the cost of the project (Id. at p. 10).

         On May 31, 2018, the Sunnybrook team presented the design change to Walker, the police chief, the fire chief, and two aldermen (Id.). During the meeting, the police chief commented that “low income housing equates to crime.” (Id.). Nevertheless, the parties agreed that the Sunnybrook team would present to a committee consisting of all aldermen in June (Id.).

         On June 12, 2018, the Sunnybrook development team appeared at the meeting of City aldermen to present the development (Id., p. 11). The City Attorney, however, indicated that Walker and the City supported the project and there was no need for the team to present at the meeting (Id.). Accordingly, the development team did not present the development (Id.). The following day, Walker issued a press statement retracting support for the Sunnybrook project, stating he was misled about the project and claiming he never knew the units would be for rent or that vouchers would be available (Id.).

         On June 15, 2018, the City sent a letter to the Illinois Housing Development Authority formally withdrawing support for Sunnybrook (Id.). Within the letter, Walker and other City officials stated they no longer supported the project because of its LIHTC financing and allegations that subsidized rental developments “would depress the value of existing single-family homes and declining property values will reduce the city's revenue forcing reductions to vital services including public safety.” (Id., p. 12; Doc. 7-8). According to Sunnybrook, Walker's comments spurred several Alton residents to start a campaign against the Sunnybrook development on Facebook and IPetition (Id.). Some of the comments made against the development allegedly have racist undertones (Id.).

         Sunnybrook alleges that the City and Walker then attempted to amend the zoning code to remove “multiple family” as a permitted use in the multiple family zoning district, which would stop the Sunnybrook development and eliminate the possibility for future multiple family development anywhere else in Alton (Id., p. 16). The City, however, has postponed consideration of these changes (Id.).

         On June 20, 2018, the Madison County Grants Committee held a public meeting to consider three projects for grants, including the Sunnybrook project (Id., p. 18). Sunnybrook alleges Walker called the Committee Chair and expressed his strong opposition to the Sunnybrook development. Walker also appeared at the public meeting and expressed his opposition. Sunnybrook alleges that, as a result of these actions, the Grants Committee did not award any funds to Sunnybrook-costing Sunnybrook nearly $500, 000 in anticipated funding (Id.).

         On July 31, 2018, Sunnybrook submitted its initial building permit application (Id.). The City employed a third-party engineering consultant to review the application (Id.). On August 21, 2018, the City issued a letter denying Sunnybrook the building permit, supplemented with the engineer's comments (Id., p. 18-19). Particularly, the engineer noted Sunnybrook's failure to submit a subdivision plat for the project, assuming such a plat would be required when the units become available for sale in 15 years (Id., p. 19). Generally, a plat is only required under the Alton City Code prior to the sale of a portion of the land (Id.). The City has never required such an advanced plat from similar projects (Id.). Sunnybrook alleges on information and belief that the engineer did not list the plat requirement in his initial feedback but added it later upon the City's request (Id.).

         On November 5, 2018, Sunnybrook filed suit in the Circuit Court of Madison County, Illinois, against the City of Alton (Id.). On December 12, 2018, the Madison County court found the filing of a subdivision plat unnecessary because Sunnybrook can convert the property through a condominium association in 15 years (Id., p. 20). And on June 5, 2019, the City of Alton was ordered to grant the pending building permit for the Community of Sunnybrook by May 7, 2019. Sunnybrook LP v. City of Alton, Illinois, No. 2018MR884 (Madison Cty., Ill. June 5, 2019). The court again directed the City to issue the permit on June 27, 2019, noting that it would impose sanctions of $500 per day if the permit was not issued as directed. Id. Alton filed a motion to reconsider the court's June 5, 2019 Order, which was denied on August 1, 2019. Id. The City has now appealed the trial court's decision, and that appeal remains pending. Id.

         Despite the Illinois state court's ruling, Sunnybrook alleges the City of Alton may now require Sunnybrook to have an approved “planned development procedure, ” which is required when a proposed development has a mixed use (Id.). It may also require Sunnybrook to obtain a special use permit to convert the units into condos in 15 years (Id.). Sunnybrook asserts the continuing obstacles are designed to force it to seek approval from the City, so the City can then deny the request and stop the project for good.

         Sunnybrook claims that Walker and the City of Alton are acting to preclude the development of multiple family housing units for renters with full knowledge that minorities in Alton have a disproportionate need for affordable housing in the City. It further claims that Defendants' actions constitute a pattern or practice of unlawful discrimination against groups of persons on the basis of race and color.

         Sunnybrook filed its Complaint in this action on December 19, 2018, followed by an Amended Complaint on December 21, 2018 (Doc. 7). In Count 1 of its Amended Complaint, Sunnybrook alleges Defendants violated the Fair Housing Act, 42 U.S.C. § 3601, et seq. by making dwellings unavailable or denying dwellings to persons because of their race or color and interfering with persons in the exercise or enjoyment of rights granted or protected by 42 U.S.C. § 3604. It further alleges Defendants' discriminatory housing policies were intentional and willful, and that Defendants have put policies into practice to prevent further development of housing opportunities. Sunnybrook alleges it is an aggrieved party within the meaning of 42 U.S.C. § 3602(i) and 3613(a). In Count 2, Sunnybrook alleges the City of Alton has deprived it of its right to make and enforce contracts on the basis of race, color, and national origin in violation of the Civil Rights Act, 42 U.S.C. § 1981. In Count 3, Sunnybrook claims the City of Alton has deprived it of its right to purchase, lease, or otherwise hold or convey property, on the basis of race, color, and national origin in violation of the Civil Rights Act, 42 U.S.C. § 1982. ...


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