2015 IL App (1st) 131833
Ill. App. Ct.2015Background
- The City of Chicago used eminent domain to acquire vacant land owned by Fred Eychaner within the River West Tax Increment Financing (TIF) area and planned manufacturing district (PMD), then planned to transfer it to Blommer Chocolate Co. for expansion of its industrial campus.
- The City created the PMD and River West TIF to protect industrial uses near the Loop, to prevent residential encroachment, and to promote reinvestment; studies underlying the TIF identified conservation-area blighting factors and articulated redevelopment strategies.
- Eychaner refused Blommer’s purchase offer; the City passed ordinances adopting the PMD and authorizing the TIF and the taking, finding the taking necessary to achieve redevelopment objectives.
- Eychaner filed a traverse and motion to dismiss challenging the constitutionality of the taking; the trial court denied it and a jury later awarded just compensation of $2.5 million after a bench/jury valuation trial.
- At trial dispute centered on whether PMD zoning (and related depreciation) should be excluded under the statutory "scope of the project" (project-influence) rule, and on several evidentiary issues concerning appraisers (disclosure, cross-examination limits, and violation of motion-in-limine rulings).
Issues
| Issue | Plaintiff's Argument (City) | Defendant's Argument (Eychaner) | Held |
|---|---|---|---|
| 1) Constitutionality of taking property in a conservation area for economic redevelopment | The taking furthers public purposes: preventing blight, protecting industry, promoting investment; City relied on PMD and TIF studies and ordinances | The taking was a private-purpose transfer (a "sweetheart" deal) and unconstitutional under SWIDA unless property is blighted | Held: Taking constitutional — public purpose satisfied; government may use eminent domain in a conservation area to prevent future blight (affirmed) |
| 2) Admissibility of PMD zoning evidence at valuation (scope-of-the-project rule) | PMD zoning and any depreciation were part of the same overall project and thus probative of value | PMD zoning should be excluded because it was an independent later project that depressed value (project-influence rule applies) | Held: PMD zoning should have been excluded under the Illinois statutory scope-of-the-project rule; trial court erred (reversed as to valuation) |
| 3) Evidence about why/how PMD zoning was adopted (City motive) | Motive and legislative process are irrelevant to valuation and are not jury questions | Process evidence is relevant to whether rezoning was probable (thus affects valuation) | Held: Court declined to address relevancy of PMD adoption process; because PMD zoning itself is excluded under scope rule, jury should not consider how it came about |
| 4) Appraiser testimony and trial-court evidentiary rulings (late disclosures, cross-examination limits, in limine violation) | City could call experts it previously disclosed for Eychaner; limiting cross-exam was within discretion; curative instruction addressed in-limine violation | Eychaner argued prejudice from City adding his former experts, from limits on cross-examining MaRous about rezoning probability, and from MaRous identifying Eychaner as his original client | Held: Trial court did not abuse discretion in allowing late-use of experts, and curative instruction cured the in-limine revelation; but court abused discretion by unduly limiting cross-examination of MaRous on assumptions underlying his valuation; new compensation trial ordered |
Key Cases Cited
- Southwestern Illinois Dev. Auth. v. National City Envtl., L.L.C., 199 Ill. 2d 225 (2002) (distinguishes valid public-purpose takings from pretextual transfers benefiting private parties)
- People ex rel. Gutknecht v. City of Chicago, 3 Ill. 2d 539 (1954) (supports use of eminent domain in conservation areas to prevent future blight)
- Kelo v. City of New London, 545 U.S. 469 (2005) (broad public-purpose standard for takings tied to comprehensive redevelopment plans)
- United States v. Miller, 317 U.S. 369 (1943) (origin of the scope-of-the-project/project-influence rule excluding value changes caused by the condemning public improvement)
- City of Chicago v. Barnes, 30 Ill. 2d 255 (1964) (individual non-blighted parcels may be taken as part of a blighted or conservation area)