| Docket
No. 87809-Agenda 16-September 2001. THE
SOUTHWESTERN ILLINOIS DEVELOPMENT AUTHORITY, Appellant, v. NATIONAL
CITY ENVIRONMENTAL, L.L.C., et al.,
Appellees. Opinion
filed April 4, 2002. JUSTICE
GARMAN delivered the opinion of the court: The
issue in this case is whether the Southwestern Illinois Development
Authority (SWIDA) properly exercised the power of eminent domain to take
property owned by National City Environmental, L.L.C., and St. Louis
Auto Shredding Company (collectively NCE), and convey that property to
Gateway International Motorsports Corporation (Gateway). The circuit
court of St. Clair County ruled that SWIDA had properly exercised its
authority to take the land in question. The appellate court reversed.
304 Ill. App. 3d 542. On April 19, 2001, we reversed the decision of the
appellate court, but subsequently granted rehearing. We now affirm the
decision of the appellate court. BACKGROUND SWIDA
was created in 1987 by the Illinois General Assembly through passage of
the Southwestern Illinois Development Authority Act (the Act) (70 ILCS
520/1 et seq. (West
1998) (formerly Ill. Rev. Stat. 1991, Ch. 85, par. 6151 et
seq.)). SWIDA is a political entity and municipal
corporation whose stated purpose is to "promote industrial,
commercial, residential, service, transportation and recreational
activities and facilities, thereby reducing the evils attendant upon
unemployment and enhancing the public health, safety, morals, happiness
and general welfare of this State." 70 ILCS 520/2(g) (West 1998). The
Act mandates that SWIDA "promote development within the geographic
confines of Madison and St. Clair counties." 70 ILCS 520/5 (West
1998). It is the duty of SWIDA to assist in the development,
construction, and acquisition of industrial, commercial, housing or
residential projects within these counties. 70 ILCS 520/5 (West 1998). A
"[c]ommercial project" is defined as "any cultural
facilities of a for-profit or not-for-profit type including ***
racetracks *** [and] parking facilities." 70 ILCS 520/3(j) (West
1998). To
accomplish the purposes of the Act, the legislature empowered SWIDA to
issue bonds for the purpose of acquiring, improving or developing
projects, including those established by business entities attempting to
locate or expand property within Madison and St. Clair Counties. 70 ILCS
520/7 (West 1998). SWIDA also has the authority to acquire property by
condemnation. According to the Act, SWIDA's "acquisition by eminent
domain of such real property or any interest therein by [SWIDA] shall be
in the manner provided by the 'Code of Civil Procedure' [735 ILCS
5/1-101 et seq. (West
1998)], *** including Section 7-103 thereof [735 ILCS 5/7-103 (West
1998)]." 70 ILCS 520/8(b) (West 1998). In
June 1996, SWIDA issued $21.5 million in taxable sports facility revenue
bonds. The proceeds of the bonds were lent to Gateway to finance the
development of a multipurpose automotive sports and training facility in
the region (the racetrack). Gateway signed a loan agreement and a note
to evince its obligation to repay the loan. Revenues received by SWIDA
pursuant to the loan agreement are pledged to secure payment of the
bonds. 70 ILCS 520/7(d) (West 1998). If at any time SWIDA is unable to
pay the principal and interest on the bonds, it shall so certify to the
Governor, who then submits the amounts so certified to the General
Assembly. As such, the bonds constitute a moral obligation of the state.
70 ILCS 520/7(f) (West 1998). The
racetrack was developed and has flourished. In 1997, the racetrack had a
total attendance of 400,000 at various large and small events. Seating
included 25,000 grandstand seats and 25,000 portable seats. In 1998,
Gateway increased its seating capacity and desired to increase its
parking capacity as well. It called upon SWIDA to use its quick-take
eminent domain powers to acquire land to the west of the racetrack for
the purposes of expanded parking facilities. The adjacent 148.5-acre
tract of land sought was owned by NCE. NCE
operates a metal recycling center in an area of St. Clair County that,
until recently, was National City, Illinois. NCE employs 80 to 100
persons full time and has been at its present location since 1975. NCE
shreds cars and appliances and separates the reusable metals. It
disposes of nearly 100,000 cars per year. Nonrecyclable by-products of
the process, referred to as "fluff," are deposited in NCE's
landfill, located to the east of its recycling center. When this
landfill site reaches capacity, NCE plans to expand its landfill
operations onto the 148.5-acre tract of land it owns to the east of the
current landfill. NCE uses clay and dirt from the 148.5-acre tract to
fill and cover fluff in the landfill area currently in use. In
early 1998, Gateway attempted to discuss the purchase of NCE's land with
NCE's owner. NCE would not discuss the matter and, initially, Gateway
made no offer to purchase the land. Instead, Gateway asked SWIDA to
exercise its quick-take eminent domain powers to take the 148.5 acres of
land and transfer it to Gateway. Gateway
completed a "Quick-Take Application Packet" and stated that it
wanted to use the land as a parking lot for the purpose of increasing
the value of Gateway's racetrack. Gateway paid SWIDA an application fee
of $2,500, and the sum of $10,000 to be applied toward SWIDA's sliding
scale fee of 6% to 10% of the acquisition price of property being
condemned. In addition, Gateway agreed to pay SWIDA's expenses,
including the acquisition price of the property, and other costs
associated with the quick-take process. Approval
of the county board is required before SWIDA can use its quick-take
eminent domain powers within unincorporated areas of a county. 70 ILCS
520/8(b) (West 1998). On February 23, 1998, the St. Clair County board
adopted a resolution authorizing SWIDA to exercise its quick-take
eminent domain authority to acquire the NCE tract of land for Gateway
parking. The board noted that dramatic attendance increases could be
expected at the racetrack and that it was necessary to create additional
parking facilities to adequately serve patrons. The board also found
that expansion of the racetrack facilities would enhance the public
health, safety, morals, happiness, and general welfare of the citizens
of southwestern Illinois by increasing the tax base in the area and
generating additional tax revenues. On
March 5, 1998, SWIDA held a public meeting to address the proposed
taking. Notice was given to NCE and adjacent property owners. Over the
objections of NCE's counsel, SWIDA adopted a resolution manifesting an
intent to assist Gateway with racetrack expansion through the
acquisition of NCE's property. Like the St. Clair County board
resolution, SWIDA's resolution recounted the numerous benefits that
could be created for the region. SWIDA found that the acquisition of
NCE's property was essential to the success of the proposed expansion
and further development of the racetrack, and authorized its executive
director, Alan Ortbals, to acquire title to the property by all
necessary and appropriate means, including negotiations and quick-take
eminent domain proceedings. SWIDA authorized the execution of an
agreement with Gateway for acquisition of the property through
quick-take eminent domain proceedings and subsequent conveyance of the
property to Gateway. In
an effort to acquire the property through a negotiated sale, Ortbals
attended a meeting on March 17, 1998, at which he delivered to NCE a
written offer to purchase the property for $1 million. By letter dated
March 19, 1998, NCE rejected the $1 million offer but indicated its
willingness to meet with SWIDA the week of March 30, 1998, following an
expected appraisal of the property. On March 20, 1998, SWIDA made
another written offer to NCE to purchase the property for $1 million and
advised NCE that SWIDA would initiate proceedings to condemn the
property if NCE did not accept the offer by 5 p.m. on March 30, 1998. NCE
did not respond to the second offer and ultimatum until April 20, 1998.
By letter, NCE indicated that it felt it was unnecessary to respond to
the offer, as SWIDA was aware of NCE's prior rejection of the earlier
offer to purchase the property for the identical sum of $1 million.
However, to be clear on the matter, NCE indicated that it was again
rejecting the offer of $1 million for the sale of its property. Meanwhile,
on March 31, 1998, SWIDA filed a complaint in the circuit court of St.
Clair County seeking condemnation of, and acquisition of fee simple
title to, the property. In addition, SWIDA filed a motion for immediate
vesting of title, and asked the circuit court to fix a date for
quick-take proceedings pursuant to sections 7-103 and 7-104 of the Code
of Civil Procedure (735 ILCS 5/7-103, 7-104 (West 1998)). On the same
date, NCE filed a motion to dismiss the complaint and on April 2, 1998,
filed a traverse and motion to dismiss. NCE argued that the proposed
taking was for an unconstitutional private use; the proposed taking was
excessive; additional parking at Gateway's racetrack was not needed; and
SWIDA had failed to make a good-faith effort to negotiate an acceptable
purchase price with NCE. In addition, NCE filed a motion to strike
SWIDA's request for immediate vesting of title. The circuit court denied
both the motion to dismiss and the motion to strike the request for
immediate vesting of title. The
circuit court held a quick-take hearing and on April 27, 1998, ruled in
SWIDA's favor. Relying on testimony from Mike Pritchett of the Illinois
Department of Transportation (the Department), the circuit court found
that the taking was for a public purpose as there were serious public
safety issues involved. Pritchett had testified that the Department was
working with Gateway to develop a traffic plan that would move traffic
into and out of the racetrack facility, while minimizing impact on the
surrounding state and interstate highways. According to traffic pattern
data studied by the Department, significant traffic congestion occurred
on Interstate 55-70 when major events were held at the racetrack.
According to Pritchett, a safety hazard was created because drivers do
not normally anticipate stopped traffic on the interstate. Pritchett
further testified that pedestrians often crossed Illinois Route 203 from
the parking areas east of the highway to the racetrack. A traffic signal
was in place to allow patrons to cross Route 203. However, the signals
created even more automobile traffic delays. There was additional
testimony that there was a risk pedestrians would be struck by
automobile traffic as they crossed Route 203 at improper locations away
from the designated crossing area and signal. Pritchett testified that
construction of a parking lot on NCE's property, as suggested in the
Department's 1996 traffic impact study, would provide parking to the
west of the racetrack and alleviate traffic problems when major events
were taking place at the racetrack. Therefore, according to Pritchett,
there was some urgency in acquiring the property and developing parking
facilities to alleviate stress on the highway system and improve safety. The
circuit court also relied on Ortbals' testimony regarding public safety,
economic development, and elimination of blight. According to Ortbals,
the county was experiencing serious traffic problems on days the
racetrack hosted events. Like Pritchett, Ortbals also referred to
congestion on Interstate 55-70 and traffic and pedestrian concerns
related to Illinois Route 203. In addition, Ortbals testified that
development of a parking facility on the property was necessary to
promote economic development, as the number of spectators, development
and expansion of neighboring businesses, and other economic spin-off,
all had exceeded initial expectations. Ortbals testified that it was
necessary to acquire the entire 148.5 acre tract owned by NCE because
areas that had previously been used for patron parking, such as areas
now occupied by hotels and restaurants and the golf course, were no
longer available. In addition, Ortbals testified that the development of
the racing facilities had indirectly helped to eliminate blight in the
area. Rod
Wolter, president and general manager of Gateway International Raceway,
testified that by turning the 148.5 acres owned by NCE into parking for
the racetrack, Gateway would grow and profits would increase. Wolter
acknowledged that Gateway had discussed developing a parking garage
facility to meet its needs but that it would be much less expensive to
have SWIDA take the property in question from NCE and give it to Gateway
for ground parking. The
circuit court also heard testimony from a number of other sources,
including city officials from the region, area businessmen and other
Gateway officials. Most, if not all, testified as to the many benefits
that continued expansion of Gateway could potentially bring to the area.
The court found that the taking was not excessive and that NCE had been
unwilling to negotiate in a meaningful fashion for the sale of the
property. The court found that SWIDA had bargained for the property in
good faith and NCE's failure to timely reject SWIDA's final offer of
sale or to present a counteroffer was dispositive of this issue.
Therefore, the circuit court held that quick-take procedures were
necessary to avoid any negative economic impact to the people of the
region. The
circuit court denied NCE's oral motion for a stay of proceedings (see
735 ILCS 5/7-104(b) (West 1998)) and heard evidence of just compensation
for the property (see 735 ILCS 5/7-104(c) (West 1998)). On April 28,
1998, the circuit court made a preliminary finding that $900,000 was
just compensation for the property. On April 30, 1998, the circuit court
entered an order of taking, vesting SWIDA with title to the property in
fee simple and granting it the right to immediate possession of the
property. See 735 ILCS 5/7-105(a) (West 1998)). On the same day, SWIDA
conveyed title to the property to Gateway by way of a quit-claim deed.
NCE filed an emergency motion in the circuit court seeking a stay of the
transfer of title or, in the alternative, an order requiring SWIDA to
post a bond of $38 million pending appeal. The motion was denied. Pursuant
to section 7-104(b) of the Code of Civil Procedure (735 ILCS 5/7-104(b)
(West 1998)) and Supreme Court Rule 307(a)(7) (188 Ill. 2d R.
307(a)(7)), NCE filed an interlocutory appeal arguing in part that SWIDA
lacked constitutional authority to take the property and convey it to
Gateway. NCE also filed an emergency motion for a stay of the
condemnation, which was granted. The
appellate court determined that SWIDA had exceeded its constitutional
authority in taking NCE's land by eminent domain and reversed the
decision of the circuit court. 304 Ill. App. 3d 542. SWIDA
filed a petition for leave to appeal pursuant to Supreme Court Rule 317
(134 Ill. 2d R. 317). We granted the petition and on April 19, 2001,
reversed the judgment of the appellate court and remanded the cause.
Subsequently, NCE petitioned this court for rehearing, which we allowed
on June 4, 2001. 155 Ill. 2d R. 367. On rehearing, we now affirm the
decision of the appellate court. ANALYSIS The
State of Illinois, as a sovereign, has the inherent right to condemn
property, subject to the state constitutional mandate that private
property shall not be taken or damaged for public use without just
compensation to its owner. Ill. Const. 1970, art. I, §15; Forest
Preserve District v. West Suburban Bank, 161 Ill. 2d 448,
455 (1994). The Fifth Amendment to the United States Constitution (U.S.
Const., amend. V), made applicable to the states through the fourteenth
amendment (U.S. Const., amend. XIV), also provides that private property
shall not be taken for public use without just compensation. Hawaii
Housing Authority v. Midkiff, 467 U.S. 229, 231, 81 L. Ed.
2d 186, 191, 104 S. Ct. 2321, 2324 (1984). In
this case, we determine whether this taking achieves a legitimate public
use pursuant to the constitutionally exercised police power of the
government (Berman v. Parker,
348 U.S. 26, 99 L. Ed. 27, 75 S. Ct. 98 (1954)) and, therefore, whether
eminent domain powers authorized by the State of Illinois were
improperly exercised in the taking of private property from one private
entity for the benefit and use of another private entity. The
right of a sovereign to condemn private property is limited to takings
for a public use. U.S. Const., amend. V; Ill. Const. 1970, art. I, §15;
Gaylord v. Sanitary District,
204 Ill. 576, 588 (1903). Clearly, private persons may ultimately
acquire ownership of property arising out of a taking and the subsequent
transfer to private ownership does not by itself defeat the public
purpose. Hawaii Housing Authority,
467 U.S. at 243-44, 81 L. Ed. 2d at 199, 104 S. Ct. at 2331. However,
that principle alone cannot adequately resolve the issues presented in
this case. "Before the right of eminent domain may be exercised,
the law, beyond a doubt, requires that the use for which the land is
taken shall be public as distinguished from a private use." People
ex rel. Tuohy v. City of Chicago, 394 Ill. 477, 481 (1946). SWIDA's
action in taking NCE's property and transferring it to Gateway for
Gateway's private use presents fundamental constitutional issues that
are essential to resolving this dispute. The essence of this case
relates not to the ultimate transfer of property to a private party.
Rather, the controlling issue is whether SWIDA exceeded the boundaries
of constitutional principles and its authority by transferring the
property to a private party for a profit when the property is not put to
a public use. It
may be impossible to clearly delineate the boundary between what
constitutes a legitimate public purpose and a private benefit with no
sufficient, legitimate public purpose to support it. "We deal, in
other words, with what traditionally has been known as the police power.
An attempt to define its reach or trace its outer limits is fruitless,
for each case must turn on its own facts." Berman,
348 U.S. at 31-32, 99 L. Ed. at 37, 75 S. Ct. at 102. "While, from
time to time, the courts have attempted to define public use, there is
much disagreement as to its meaning." Tuohy,
394 Ill. at 481. Great deference should be afforded the legislature and
its granting of eminent domain authority. Berman,
348 U.S. at 31-32, 99 L. Ed. at 37, 75 S. Ct. at 102; Old
Dominion Land Co. v. United States, 269 U.S. 55, 66, 70 L.
Ed. 162, 165, 46 S. Ct. 39, 40 (1925); United
States ex rel. Tennessee Valley Authority v. Welch, 327 U.S.
546, 552, 90 L. Ed. 843, 848, 66 S. Ct. 715, 718 (1946). However, the
exercise of that power is not entirely beyond judicial scrutiny (see
Hawaii Housing Authority, 467 U.S. at 241, 81 L. Ed. 2d at
197, 104 S. Ct. at 2329 (and cases cited therein)), and it is incumbent
upon the judiciary to ensure that the power of eminent domain is used in
a manner contemplated by the framers of the constitutions and by the
legislature that granted the specific power in question. "Courts
all agree that the determination of whether a given use is a public use
is a judicial function." Tuohy,
394 Ill. at 481. SWIDA
contends that the condemnation and taking of NCE's property is
sustainable because a public purpose will be served through (1) the
fostering of economic development, (2) the promotion of public safety,
and (3) the prevention or elimination of blight. Moreover, once the
determination is made that one or all of these requirements is
satisfied, "possessory use by the public is not an indispensable
prerequisite to the lawful exercise of the power of eminent
domain." People ex rel.
Gutknecht v. City of Chicago, 3 Ill. 2d 539, 544-45 (1954). SWIDA
contends that any distinction between the terms "public
purpose" and "public use" has long since evaporated and
that the proper test is simply to ask whether a "public
purpose" is served by the taking. While the difference between a
public purpose and a public use may appear to be purely semantic, and
the line between the two terms has blurred somewhat in recent years, a
distinction still exists and is essential to this case. We agree that
these terms are necessarily somewhat loosely defined. However, that does
not mean they are indistinguishable. The term " '[p]ublic
purpose' is not a static concept. It is flexible, and is capable of
expansion to meet conditions of a complex society that were not within
the contemplation of the framers of our constitution."
People ex rel. Adamowski v. Chicago R.R. Terminal Authority,
14 Ill. 2d 230, 236 (1958) (citing People
ex rel. Gutknecht v. Chicago Regional Port District, 4 Ill.
2d 363 (1954), Grasse v. Dealer's
Transport Co., 412 Ill. 179 (1952), People
v. Chicago Transit Authority, 392 Ill. 77 (1945), and People
ex rel. Greening v. Bartholf, 388 Ill. 445 (1944)). However,
this flexibility does not equate to unfettered ability to exercise
takings beyond constitutional boundaries. "A purely private taking
could not withstand the scrutiny of the public use requirement; it would
serve no legitimate purpose of government and would thus be void." Hawaii
Housing Authority, 467 U.S. at 245, 81 L. Ed. 2d at 200, 104
S. Ct. at 2331. As this court held in Gaylord,
204 Ill. at 584, "[t]he public must be to some extent entitled to
use or enjoy the property, not as a mere favor or by permission of the
owner, but by right." Clearly,
the taking of slums and blighted areas is permitted for the purposes of
clearance and redevelopment, regardless of the subsequent use of the
property. See, e.g., Village
of Wheeling v. Exchange National Bank of Chicago, 213 Ill.
App. 3d 325 (1991); City of Chicago v. Gorham, 80 Ill. App. 3d 496 (1980); City
of Chicago v. Walker, 50 Ill. 2d 69 (1971). However, this
proposition and the cases supporting it are of little assistance in this
instance, as we are not dealing with a taking for the purposes of
eliminating slums or blight. If
this taking were allowed to stand, it may be true that spectators at
Gateway would benefit greatly. Developing additional parking could
benefit the members of the public who choose to attend events at the
racetrack, as spectators may often have to wait in long lines of traffic
to park their vehicles and again to depart the facility. We also
acknowledge that a public use or purpose may be satisfied in light of
public safety concerns. See Illinois Toll Highway Comm'n v. Eden Cemetery Ass'n, 16 Ill.
2d 539 (1959). The public is allowed to park on the property in exchange
for the payment of a fee. Gateway's racetrack may be open to the public,
but not "by right." Gaylord,
204 Ill. at 584. It is a private venture designed to result not in a
public use, but in private profits. If this taking were permitted, lines
to enter parking lots might be shortened and pedestrians might be able
to cross from parking areas to event areas in a safer manner. However,
we are unpersuaded that these facts alone are sufficient to satisfy the
public use requirement, especially in light of evidence that Gateway
could have built a parking garage structure on its existing property. We
have also recognized that economic development is an important public
purpose. See People ex rel. City of
Canton v. Crouch, 79 Ill. 2d 356 (1980); People
ex rel. City of Urbana v. Paley, 68 Ill. 2d 62 (1977); People
ex rel. City of Salem v. McMackin, 53 Ill. 2d 347 (1972).
SWIDA presented extensive testimony that expanding Gateway's facilities
through the taking of NCE's property would allow it to grow and prosper
and contribute to positive economic growth in the region. However,
"incidentally, every lawful business does this." Gaylord,
204 Ill. at 586. Moreover, nearly a century ago, Gaylord
expressed the long-standing rule that "to constitute a public use,
something more than a mere benefit to the public must flow from the
contemplated improvement." Gaylord,
204 Ill. at 584. This
case is strikingly similar to our earlier decision in Limits
Industrial R.R. Co. v. American Spiral Pipe Works, 321 Ill.
101 (1926). In Limits Industrial,
this court held that a railroad could not exercise eminent domain
authority to acquire property for the purpose of expanding its
facilities. Despite a certificate of convenience and necessity issued by
the Illinois Commerce Commission, we found the proposed spur track and
public freight house provided minimal public benefit and principally
benefited the railroad itself and a few other business entities. Limits
Industrial, 321 Ill. at 109-10. Similarly, it is incumbent
upon us to question SWIDA's findings as to the parking situation at
Gateway and determine whether the true beneficiaries of this taking are
private businesses and not the public. We
do not require a bright-line test to find that this taking bestows a
purely private benefit and lacks a showing of a supporting legislative
purpose. As was the case in Limits
Industrial, members of the public are not the primary
intended beneficiaries of this taking. Limits
Industrial, 321 Ill. at 109-10. This condemnation clearly
was intended to assist Gateway in accomplishing their goals in a swift,
economical, and profitable manner. Entities
such as SWIDA must always be mindful of expediency, cost efficiency, and
profitability while accepting the legislature's charge to promote
development within their defined parameters. However, these goals must
not be allowed to overshadow the constitutional principles that lie at
the heart of the power with which SWIDA and similar entities have been
entrusted. As Justice Kuehn stated in dissent in the appellate court,
"If property ownership is to remain what our forefathers intended
it to be, if it is to remain a part of the liberty we cherish, the
economic by-products of a private capitalist's ability to develop land
cannot justify a surrender of ownership to eminent domain." 304
Ill. App. 3d at 556 (Kuehn, J., specially concurring). While
the activities here were undertaken in the guise of carrying out its
legislated mission, SWIDA's true intentions were not clothed in an
independent, legitimate governmental decision to further a planned
public use. SWIDA did not conduct or commission a thorough study of the
parking situation at Gateway. Nor did it formulate any economic plan
requiring additional parking at the racetrack. SWIDA advertised that,
for a fee, it would condemn land at the request of "private
developers" for the "private use" of developers. In
addition, SWIDA entered into a contract with Gateway to condemn whatever
land "may be desired *** by Gateway." Clearly, the foundation
of this taking is rooted not in the economic and planning process with
which SWIDA has been charged. Rather, this action was undertaken solely
in response to Gateway's expansion goals and its failure to accomplish
those goals through purchasing NCE's land at an acceptable negotiated
price. It appears SWIDA's true intentions were to act as a default
broker of land for Gateway's proposed parking plan. This
point is further emphasized by the fact that other options were
available to Gateway that could have addressed many of the problems
testified to by Pritchett, Ortbals and others. Gateway could have built
a parking garage structure on its existing property rather than develop
the land owned by NCE. However, when Gateway discovered that the cost of
constructing a garage on land it already owned was substantially higher
than using SWIDA as its agent to take NCE's property for open-field
parking, Gateway chose the easier and less expensive avenue. As
a result of the acquisition of NCE's property, Gateway could realize an
estimated increase of $13 to $14 million in projected revenue per year.
While we do not deny that this expansion in revenue could potentially
trickle down and bring corresponding revenue increases to the region,
revenue expansion alone does not justify an improper and unacceptable
expansion of the eminent domain power of the government. Using the power
of the government for purely private purposes to allow Gateway to avoid
the open real estate market and expand its facilities in a more
cost-efficient manner, and thus maximizing corporate profits, is a
misuse of the power entrusted by the public. The
legislature intended that SWIDA actively foster economic development and
expansion in Madison and St. Clair Counties. 70 ILCS 520/2(g), 5 (West
1998). However, the actions of SWIDA in this case blur the lines between
a public use and a private purpose. A highway toll authority may justify
the use of eminent domain to ensure that motorists have reasonable
access to gas stations. Illinois
Toll Highway Comm'n, 16 Ill. 2d at 546. Does the highway
authority's power include the ability to use eminent domain authority to
take additional land for a car wash, and then a lube shop? Could the
authority then use its power to facilitate additional expansions for a
motel, small retail shops, and entertainment centers? The initial,
legitimate development of a public project does not justify condemnation
for any and all related business expansions. SWIDA
contends that the "wisdom *** of the legislation and 'the means of
executing the project' are beyond judicial scrutiny 'once the public
purpose has been established.' It is that purpose which controls and not
the 'means' or 'mechanics' of how the purpose is carried out." We
disagree. The Constitution and the essential liberties we are sworn to
protect control. In its wisdom, the legislature has given SWIDA the
authority to use eminent domain power to encourage private enterprise
and become involved in commercial projects that may benefit a specific
region of this state. While we do not question the legislature's
discretion in allowing for the exercise of eminent domain power,
"the government does not have unlimited power to redefine property
rights." Loretto v.
Teleprompter Manhattan CATV Corp., 458 U.S. 419, 439, 73 L.
Ed. 2d 868, 885, 102 S. Ct. 3164, 3178 (1982). The power of eminent
domain is to be exercised with restraint, not abandon. CONCLUSION Accordingly,
we agree with the appellate court's finding that, in this case, SWIDA
exceeded its constitutional authority in taking NCE's land by eminent
domain. The judgment of the appellate court is therefore affirmed. Affirmed.
The
majority holds that the Southwestern Illinois Development Authority (SWIDA)
may not use the power of eminent domain to take real property owned by
National City Environmental, L.L.C., and St. Louis Auto Shredding
Company (collectively NCE), and convey same to Gateway International
Motorsports Corporation (Gateway). Because I believe the taking at issue
is for a public use, and in furtherance of the purposes for which SWIDA
was created, I respectfully dissent. BACKGROUND I
agree with that portion of the majority's statement of facts setting
forth the procedural posture of this case. I also agree with that
portion of the statement of facts outlining the creation of SWIDA, the
purposes of SWIDA, and the issuance of bonds by SWIDA to finance the
costs of acquiring, constructing and installing a multipurpose
automotive sports and training facility in the City of Madison. As to
the balance of the statement of facts, I find that it contains
conclusions unfairly slanted toward the result the majority desires to
reach. Additionally, the majority omits certain facts adduced at trial
which outline the reasons for the taking, and support the conclusion
reached by the circuit court. I believe the reader of this opinion may
benefit from a more complete rendition of the evidence in the record. In
June 1996, SWIDA issued $21.5 million in taxable sports facility revenue
bonds. Gateway used the proceeds from the bonds to acquire a small
racetrack and transform it into a racing and training facility capable
of hosting major race car events. In 1997, the racetrack had 25,000
grandstand seats and 25,000 portable seats. The racetrack hosted three
major events and a number of smaller events, with total attendance of
400,000. In 1998, Gateway increased seating capacity and hosted four
major events at the racetrack. Gateway's goal is to increase seating
capacity in increments to the point where the racetrack has the 85,000
to 100,000 seats needed to host a Winston Cup NASCAR event. On
February 20, 1998, Gateway requested that SWIDA use its quick-take
eminent domain powers to acquire a 148.5-acre tract of land (the
Property) west of the racetrack for parking. Gateway asked SWIDA to
acquire the Property from its owner, NCE, and convey it to Gateway.
Gateway paid an application fee of $2,500 to SWIDA, and the sum of
$10,000 to be applied toward SWIDA's sliding scale fee of 6% to 10% of
the acquisition price of property being condemned. Gateway also agreed
to pay SWIDA's out-of-pocket expenses or other costs associated with the
quick-take process, including the acquisition price of the Property.
Members of SWIDA's board are not entitled to compensation (70 ILCS
520/4(c) (West 1998)) and did not receive any part of these fees. On
February 23, 1998, the St. Clair County board adopted a resolution
authorizing SWIDA to exercise its quick-take eminent domain powers to
acquire the Property for use by Gateway for racetrack parking. See 70
ILCS 520/8(b) (West 1998) (requiring the approval of the county board
before SWIDA can use its quick-take eminent domain powers within the
unincorporated areas of a county). The board noted that attendance at
the racetrack was expected to increase from 400,000 in 1997 to 600,000
in 1998, and that other development projects in the area would reduce
available racetrack parking by 100 acres. The board found that it was
necessary to create additional parking areas to safely and adequately
service the spectators who would be attending events at the racetrack
during 1998 and in subsequent years. Further, the board found that
expansion of the racetrack would enhance the public health, safety,
morals, happiness, and general welfare of the citizens of southwestern
Illinois by increasing the tax base in St. Clair County and generating
additional tax revenues. Upon
receipt of the St. Clair County board resolution, SWIDA held a public
hearing on March 5, 1998, with notice given to NCE and adjacent property
owners. Ray Reott, an attorney representing NCE, attended the meeting
and voiced NCE's objections to the proposed taking. At the meeting,
SWIDA adopted a resolution to assist the expansion of the racetrack (the
Development Project) through the acquisition of the Property. SWIDA
found that the Development Project would enhance the public health,
safety, morals, happiness, and the general welfare of the citizens of
southwestern Illinois through the creation of job opportunities, the
generation of additional tax revenues and the expansion of the tax base
within St. Clair County. SWIDA also found that the Property was integral
to the success of the Development Project and authorized its executive
director to take all necessary and appropriate actions, including
negotiations and commencement of quick-take eminent domain proceedings,
to acquire title to the Property. Further, SWIDA authorized its chairman
or vice-chairman to execute an agreement between SWIDA and Gateway for
acquisition of the Property through the use of quick-take eminent domain
proceedings and conveyance of the Property to Gateway in furtherance of
the Development Project. Alan
Ortbals, SWIDA's executive director, attended a meeting in Chicago on
March 17, 1998, in an attempt to acquire the Property through
negotiations. At the meeting, Gateway delivered a written offer to NCE
to purchase the Property for $1 million. By letter dated March 19, 1998,
NCE rejected the offer, but indicated its willingness to meet the week
of March 30, 1998, when NCE expected to have a completed appraisal of
the Property. In a separate letter to SWIDA, NCE requested that SWIDA
forward copies of any appraisals of the Property in its possession by
March 25, 1998. SWIDA complied with this request. On
March 20, 1998, SWIDA made a written offer to NCE to purchase the
Property for $1 million, and advised NCE that it would initiate
condemnation proceedings if NCE did not accept the offer by 5:00 p.m. on
March 30, 1998. SWIDA also attempted to follow through with the
suggestion in NCE's letter of March 19, 1998, that the parties meet the
week of March 30, 1998. On March 30, 1998, Harry Sterling, SWIDA's
attorney, and Ortbals attempted to place a conference call to Reott.
Reott was not available and failed to return the telephone call. NCE
did not respond to SWIDA's offer by the stated deadline. Instead, by
letter dated April 20, 1998, NCE indicated that it did not feel that it
was necessary to respond to SWIDA's offer because SWIDA knew that NCE
had rejected Gateway's offer to purchase the Property for the identical
sum of $1 million. However, to remove any uncertainty on the subject,
NCE indicated that it was rejecting SWIDA's offer. Meanwhile,
on March 31, 1998, SWIDA filed a complaint for condemnation in the
circuit court of St. Clair County, seeking to acquire fee simple title
to the Property. SWIDA also filed a motion for immediate vesting of
title and requested that the court fix a date for a quick-take hearing,
pursuant to the quick-take provisions of the Code of Civil Procedure.
See 735 ILCS 5/7-103, 7-104 (West 1998). Also
on March 31, 1998, NCE filed a motion to dismiss the complaint for
condemnation. Subsequently, on April 2, 1998, NCE filed a traverse and
motion to dismiss, arguing that the proposed taking was for an
unconstitutional private use; that the proposed taking was excessive;
that the racetrack did not need additional parking; and that SWIDA had
not made a good faith attempt to agree with NCE on an acceptable
purchase price. NCE also filed a motion to strike SWIDA's request for
immediate vesting of title. The circuit court denied NCE's motion to
dismiss and motion to strike SWIDA's request for immediate vesting of
title. The
court proceeded to hold a quick-take hearing. At the hearing, John
Baricevic, St. Clair County board chairman, testified that the Property
is located in unincorporated St. Clair County, and that the board
adopted a resolution authorizing SWIDA to exercise its quick-take
eminent domain powers to acquire the Property. Baricevic also testified
that certain economic studies were done in connection with the bond
issue and Gateway's acquisition of the racetrack. These studies showed
the projected economic impact from the development of the racetrack and
from increased attendance as the racetrack expands. No specific studies
were made regarding the impact of the proposed taking on tax revenues or
the tax base. Alan
Ortbals testified regarding the economic and traffic impact of the
racetrack on the surrounding area. Ortbals stated that the racetrack
hosted more major races and drew more spectators in 1997 than
anticipated in studies performed prior to the development of the
racetrack. The racetrack had added 10,000 seats and was ahead of
projections for attendance in 1998. As a result, the county was
experiencing faster economic spin-off than anticipated. A truck stop
across from the racetrack was undergoing expansion; a parcel of land
across from the racetrack sold for development of a restaurant; and a
golf course was being developed on the site of a former junkyard. In
addition, several hotels and restaurants were being developed in the
immediate area of the racetrack and in nearby municipalities. Due
to the success of the racetrack, the county was experiencing serious
traffic problems on race days with traffic backed up on both sides of
Interstate 55-70. A number of racetrack patrons parked east of Illinois
Route 203, creating traffic safety problems as they crossed Illinois
Route 203 to gain access to the racetrack. Using the Property for
racetrack parking would alleviate both of these traffic problems. Ortbals
also testified that when Gateway approached SWIDA regarding the
Property, he reviewed the studies that were done in connection with the
financing of the racetrack, including an analysis of Gateway's business
plan, an analysis of the economic impact of the racetrack, an analysis
of the traffic impact of the racetrack, and a market demand study. He
also reviewed an analysis of the economic impact of a similar racetrack
in Topeka, Kansas. He presented a report to SWIDA board members
regarding these studies. In Ortbals' opinion as an expert in the field
of economic development, SWIDA's acquisition of the Property by
quick-take was necessary to promote economic development, alleviate
traffic safety problems, and eliminate blight. On
cross-examination, Ortbals testified that SWIDA did not commission any
studies analyzing the effect of the condemnation of the Property on
employment levels, the tax base of St. Clair County, or traffic safety
problems. Ortbals admitted that there were no slums on the Property.
However, the development of the racetrack has had an indirect effect on
the elimination of blight in the area. The golf course replaced an old
junkyard and three or four dilapidated and abandoned homes on Bend Road
have been demolished. Mike
Pritchett, a design and planning engineer employed by the Illinois
Department of Transportation (the Department) testified as an expert in
the field of civil engineering. He stated that the Department was
working with Gateway to find a traffic plan that would move traffic in
and out of the racetrack efficiently, with minimal impact on the state
and interstate highways. To that end, the Department has studied the
traffic patterns occurring around the racetrack. On days of major
events, there were significant backups on Interstate 55-70, extending
into Missouri. Because the interstate was designed to facilitate travel
at high speeds, drivers do not anticipate that cars will be stopped in
traffic on the interstate. Stopped traffic on the interstate is thus a
safety hazard. Pritchett
also testified that large numbers of racetrack patrons crossed Illinois
Route 203 from the parking areas east of the highway to the racetrack.
Illinois State Police troopers operate a traffic signal at Ohio Street
and Illinois Route 203 manually to allow racetrack patrons to cross the
highway. However, the traffic backed up at the signal had negative
repercussions on Interstate 55-70. Furthermore, many racetrack patrons
crossed at random locations along the highway. When the Department put a
fence along Illinois Route 203 to try to channel racetrack patrons to
Ohio Street, they pushed the fence down to cross the highway. Although
no accidents had yet occurred, there was no assurance that none would. Pritchett
testified further that the Department had improved Illinois Route 203 to
help the flow of traffic in and out of the racetrack. These improvements
were based on a traffic impact study conducted in 1996, which assumed a
considerable amount of parking west of the racetrack. Construction of a
parking lot on the Property would provide parking west of the racetrack,
as suggested in the study, and alleviate traffic problems on race days.
Pritchett concluded that it was necessary, from a safety standpoint, for
SWIDA to acquire the Property for development of a parking lot. On
cross-examination, Pritchett testified that taking the Property would
not solve all the traffic problems in the area. Some racetrack patrons
would continue to park east of Illinois Route 203 and cross the highway
to gain access to the racetrack. And if the racetrack was able to host a
Winston Cup race, the traffic jams in the area would increase. However,
construction of a parking lot on the Property was one of several
measures the Department was considering to provide additional access to
the racetrack and ease the pressure on Illinois Route 203. The
mayor of the City of Madison testified that the racetrack had brought
new jobs to the city and increased revenues from sales and entertainment
taxes. He attributed the development of the golf course to the racetrack
and testified that several developers were negotiating plans with the
city to develop motels and restaurants in the area. He also testified
regarding the traffic problems on race days and stated that it would be
beneficial to have parking on the Property. The
president of the Village of Fairmont City attributed the development of
an 86-room hotel in the village to the racetrack. He testified that
continued growth of the racetrack was in the best economic interest of
the village. The
president of the Southwestern Illinois Tourism and Convention Bureau, a
not-for-profit corporation representing eight southwestern Illinois
counties, testified that tourism was the second largest industry in the
area. He estimated that in 1997 tourism added between $520 million and
$530 million to the economies of the eight counties, with the economic
impact of the racetrack being $43.4 million. He also testified that,
since January 1, 1996, in excess of 30 hotels had been built, were under
construction, or were slated for construction in the area. The racetrack
was a major contributing factor to the construction and proposed
development of the hotels. Scott
Harding, a consulting engineer, performed an offsite evaluation of the
Property. He testified that approximately 27 to 48 acres of the Property
constitute wetlands. A developer who proposes to drain and build on an
area that has been designated a wetland must first obtain a permit from
the United States Army Corps of Engineers, listing conditions that must
be met to minimize impact on the wetland, or steps, such as
compensation, that must be taken in mitigation. Compensation involves
replacing wetland that is used in a project with wetland that is created
on another part of the same site or on a different site. Harding
testified that Corps of Engineers policies call for compensation ratios
of three to one for wooded wetlands, two to one for wetlands with scrub
shrub, one and a half to one for emergent wetlands and one to one for
farm wetlands. The Corps of Engineers may determine that certain high
quality wetlands should not be impacted at all. Based
upon the types of wetland found on the Property, Harding estimated that
the Corps of Engineers would require two to one compensation, that is,
for every acre of wetland impacted by construction, the Corps of
Engineer would require that Gateway create or construct two acres of
wetlands. Thus, assuming that Gateway impacted 48 acres of wetlands and
compensated on site, approximately 50 acres of land would remain for
development. Rod
Wolter, Gateway's president and general manager, testified that all the
major events at the racetrack were sold out in 1997. Total attendance at
the racetrack that year was 400,000. The racetrack's schedule for 1998
listed more events than in 1997. In addition, the racetrack expected
sell-out crowds at the major events in 1998. Attendance at those events
would be greater than in 1997 because of increased seating capacity at
the racetrack. On
cross-examination, Wolter testified that the racetrack had an immediate
need for 2,000 to 5,000 parking spaces. The racetrack can park 2,000
cars on as little as 20 acres, and 5,000 cars on as little as 49 acres.
The racetrack could get through the 1998 season without the Property,
using remote parking areas. On redirect, Wolter testified that it was
not in the racetrack's best interest to "get by" with parking.
Lack of adequate parking could result in faltering attendance at the
racetrack. Christopher
Pook, the CEO of Grand Prix, testified that Gateway added 10,000 seats
to the racetrack in the spring of 1998 and planned to add another 20,000
seats in the fall. He also testified that, in order to obtain a contract
to host a NASCAR Winston Cup event, Gateway would have to increase
seating capacity to a minimum of 85,000 seats and have adequate parking
in place. Gateway has considered building a raised parking garage at the
racetrack. However, building such a garage was not economically
feasible. Pook
testified next regarding several unsuccessful attempts, starting in May
1995, to reach an agreement with NCE for the use or purchase of the
Property. Irv Pielet, one of NCE's owners, told him repeatedly that NCE
was not interested in selling the Property or in any business
relationship with Gateway. Pook also testified that two nearby
landowners had notified Gateway that 30 acres of land previously used
for parking would no longer be available. Roger
Bowler, the plant manager for St. Louis Auto Shredding Company,
testified that the plant employed 80 people on a full-time basis. During
periods of peak activity, the plant hired additional employees on a
part-time basis. On an annual basis, the plant recycled 90,000 to
100,000 cars, recovering metals from the cars for shipment to foundries,
steel mills and smelters, and depositing other materials in a landfill
operated by the plant. Bowler also testified that the current landfill
would be capped in five to eight years and NCE planned to use the
Property as its new landfill. In
lieu of personal testimony, the circuit court admitted into evidence Irv
Pielet's discovery deposition. Pielet stated that Pook was interested in
some part of NCE's land for a business venture, but he denied that Pook
spoke to him about purchasing the Property. Pielet claimed that he
learned of Gateway's interest in the Property from a newspaper account
of the St. Clair County board's resolution. Pielet
stated further that the NCE's current landfill had less than 10 years of
capacity remaining. However, no studies had been done of the landfill's
capacity and 11 acres of the landfill had not yet been used. Pielet also
stated that NCE had taken dirt once from the Property to cover a portion
of the current landfill. NCE planned to take more dirt from the Property
as needed to cover the section of the landfill the auto recycling plant
was currently using. Lastly, Pielet indicated that the Property has 9.2
acres of wetlands. At
the conclusion of the quick-take hearing, the circuit court approved the
condemnation. The court found that the taking was for a public purpose,
referring specifically to Pritchett's testimony regarding public safety
and Ortbals' testimony regarding public safety, economic development and
the elimination of blight. The court also found, in light of the
testimony regarding wetlands and testimony that parking west of the
racetrack would promote public safety, that the taking was not
excessive. Further, the court found that Pielet had been unwilling to
negotiate in a meaningful fashion and the use of quick-take procedures
was necessary to avert any negative economic impact to the people of
Madison and St. Clair Counties. Finally, the court found that the SWIDA
had bargained for the Property in good faith; NCE's failure to reject
SWIDA's offer in a timely manner or to present a counteroffer was
dispositive of this issue. ANALYSIS A.
Public Use The
majority recognizes that the State, as a sovereign, has the inherent
right to condemn property, subject to the constitutional mandate that
private property may not be taken or damaged for public use without just
compensation to the owner. See slip op. at 7. Further, the majority
recognizes that the subsequent transfer of property to a private entity
does not transform a taking for public use into a taking for private
use. See slip op. at 8. The majority correctly cites Hawaii
Housing Authority v. Midkiff, 467 U.S. 229, 81 L. Ed. 2d
186, 104 S. Ct. 2321 (1984), and Berman
v. Parker, 348 U.S. 26, 99 L. Ed. 27, 75 S. Ct. 98 (1954),
for these propositions. However, Hawaii
Housing Authority and Berman
provide additional guidance in this area of law, which the majority
fails to acknowledge. Contrary to the holdings of Hawaii
Housing Authority and Berman,
the majority gives little deference to the legislature's public use
determination. Further, the majority engrafts upon Hawaii
Housing Authority and Berman
a requirement that property taken by eminent domain be put into use for
the public, a proposition specifically rejected by the Court in Hawaii
Housing Authority. See Hawaii
Housing Authority, 467 U.S. at 243-44, 81 L. Ed. 2d at 199,
104 S. Ct. at 2331. Today's opinion is not an accurate rendition of the
holdings of Hawaii Housing Authority
and Berman and of the
principles of law involved in this area. In
Berman, 348 U.S. 26, 99
L. Ed. 27, 75 S. Ct. 98, the Supreme Court upheld the constitutionality
of the District of Columbia Redevelopment Act of 1945 (60 Stat. 790,
D.C. Code §§5-701 through 5-719 (1951)). That act provided for the use
of eminent domain to acquire property in slums and blighted areas and
for the lease or sale of the property to private interests for
redevelopment pursuant to a comprehensive redevelopment plan. The
appellants argued that their property could not be taken
constitutionally because the property was commercial, not residential
property; the property was not slum housing; the property would be put
into the project under the management of a private, not a public, agency
and redeveloped for private, not public, use. The Court considered first
whether the takings authorized by the act were for a public use,
stating: "The
power of Congress over the District of Columbia includes all the
legislative powers which a state may exercise over its affairs.
[Citation.] We deal, in other words, with what traditionally has been
known as the police power. An attempt to define its reach or trace its
outer limits is fruitless, for each case must turn on its own facts. The
definition is essentially the product of legislative determinations
addressed to the purposes of government, purposes neither abstractly nor
historically capable of complete definition. Subject to specific
constitutional limitations, when the legislature has spoken, the public
interest has been declared in terms well-nigh conclusive. In such cases
the legislature, not the judiciary, is the main guardian of the public
needs to be served by social legislation, whether it be Congress
legislating concerning the District of Columbia [citation] or the States
legislating concerning local affairs. [Citations.] This principle admits
of no exception merely because the power of eminent domain is involved.
The role of the judiciary in determining whether that power is being
exercised for a public purpose is an extremely narrow one." Berman,
348 U.S. at 31-32, 99 L. Ed. at 37, 75 S. Ct. at 102. The
Court then rejected the appellants' contention that their property was
being taken for a private use because the property would be transferred
to a private individual or company, stating: "Once
the object is within the authority of Congress, the right to realize it
through the exercise of eminent domain is clear. For the power of
eminent domain is merely the means to the end. [Citations.] Once the
object is within the authority of Congress, the means by which it will
be attained is also for Congress to determine. Here one of the means
chosen is the use of private enterprise for redevelopment of the area.
Appellants argue that this makes the project a taking from one
businessman for the benefit of another businessman. But the means of
executing the project are for Congress and Congress alone to determine,
once the public purpose has been established. [Citations.] The public
end may be as well or better served through an agency of private
enterprise than through a department of government-or so the Congress
might conclude." Berman,
348 U.S. at 33-34, 99 L. Ed. at 38, 75 S. Ct. at 103. In
Hawaii Housing Authority,
467 U.S. at 240, 81 L. Ed. 2d at 197, 104 S. Ct. at 2329, the Supreme
Court explained that the public use principle is "coterminous with
the scope of a sovereign's police powers." The Court also explained
the role of the judiciary in reviewing a legislature's public use
determination: "There
is, of course, a role for courts to play in reviewing a legislature's
judgment of what constitutes a public use, even when the eminent domain
power is equated with the police power. But the Court in Berman
made clear that it is 'an extremely narrow' one. [Citation.] The Court
in Berman cited with
approval the Court's decision in Old
Dominion Co. v. United States, 269 U.S. 55, 66 (1925), which
held that deference to the legislature's 'public use' determination is
required 'until it is shown to involve an impossibility.' The Berman
Court also cited to United States ex
rel. TVA v. Welch, 327 U.S. 546, 552 (1946), which
emphasized that '[a]ny departure from this judicial restraint would
result in courts deciding on what is and is not a governmental function
and in their invalidating legislation on the basis of their view on that
question at the moment of decision, a practice which has proved
impracticable in other fields.' In short, the Court has made clear that
it will not substitute its judgment for a legislature's judgment as to
what constitutes a public use 'unless the use be palpably without
reasonable foundation.' [Citation.] ***
[W]here the exercise of the eminent domain power is rationally related
to a conceivable public purpose, the Court has never held a compensated
taking to be proscribed by the Public Use Clause." Hawaii
Housing Authority, 467 U.S. at 240-41, 81 L. Ed. 2d at
197-98, 104 S. Ct. at 2329-30. See
also National R.R. Passenger Corp.
v. Boston & Maine Corp., 503 U.S. 407, 422, 118 L. Ed.
2d 52, 69, 112 S. Ct. 1394, 1404 (1992). Additionally,
the Court reaffirmed the principle outlined in Berman that a taking for a public use is not transformed
into a private taking through a subsequent transfer to a private party.
The Court stated: "The
mere fact that property taken outright by eminent domain is transferred
in the first instance to private beneficiaries does not condemn that
taking as having only a private purpose. The Court long ago rejected any
literal requirement that condemned property be put into use for the
general public. 'It is not essential that the entire community, nor even
any considerable portion, ... directly enjoy or participate in any
improvement in order [for it] to constitute a public use.' [Citation.]
'[W]hat in its immediate aspect [is] only a private transaction may ...
be raised by its class or character to a public affair.' *** [G]overnment
does not itself have to use property to legitimate the taking; it is
only the taking's purpose, and not its mechanics, that must pass
scrutiny under the Public Use Clause." Hawaii Housing Authority, 467 U.S. at 243-44, 81 L. Ed. 2d
at 199, 104 S. Ct. at 2331. This
court has, heretofore, been guided by the principles outlined in
Berman. Thus, in People
ex rel. Adamowski v. Chicago R.R. Terminal Authority, 14
Ill. 2d 230 (1958), this court held constitutional the Railroad Terminal
Authority Act (Ill. Rev. Stat. 1957, Ch. 114, pars. 361 through 389).
This court noted that the plaintiff's basic objection was that the
principal beneficiaries of the act were private corporations. This court
stated: "To
the extent that plaintiff's contentions are directed to an alleged
absence of public use and public purpose, they are without merit. The
General Assembly has described in considerable detail the conditions,
which the act is designed to eliminate and has declared the public use
and public interest that it found to exist. Such a legislative
declaration is not to be lightly set aside. [Citations.] 'Public
purpose' is not a static concept. It is flexible, and is capable of
expansion to meet conditions of a complex society that were not within
the contemplation of the framers of our constitution. [Citations.] The
primary objects of the statute are the removal of the blighted
conditions caused by antiquated terminal areas, the promotion of the
growth and development of the city and the relief of traffic congestion
***. [Citations.] It may be that private railroad corporations will
derive some benefit under the act. Those benefits, however, will be
incidental to the principal purpose of the statute ***." Adamowski,
14 Ill. 2d at 235-36. In
Illinois Toll Highway Comm'n v. Eden
Cemetery Ass'n, 16 Ill. 2d 539, 541 (1959), the Illinois
Toll Highway Commission sought to acquire an underground easement for
sewer and water facilities through the defendants' cemetery property.
The defendants objected that the property was being taken to service a
gasoline station to be operated by a private corporation and to service
a privately owned restaurant. This court noted that the purpose of the
toll highways was to provide fast, through traffic in a safe manner, and
that it was necessary that gasoline service stations and restaurants be
located on or in close proximity to the highway proper, thereby reducing
a great number of entrances and exits to reach these services. This
court reasoned: "As
plaintiff points out, the operations of a gas station or a restaurant
are specialized businesses, and are enterprises calling for experts in
these fields. So the legislature wisely granted to the Commission the
power to make contracts with, and to grant concessions to, and to lease
to persons and private corporations. As the court said in the case of Berman
v. Parker, 348 U.S. 26, 99 L. ed. 27, at pages 33-34: 'The
public end may be as well or better served through an agency of private
enterprise than through a department of government-or so the Congress
might conclude. We cannot say that public ownership is the sole method
of promoting the public purposes of community redevelopment projects.' We
therefore conclude that service stations and restaurants are an integral
part of the toll road system, whether they be operated by the Toll
Highway Commission or leased to a private corporation who may be better
able to carry on the business, thus bringing about the desired result.
We think, further, that since access to sewer and water facilities is
essential to the operation of service stations and restaurants, the
reasoning which sustains the propriety of arrangements for the latter
must uphold as well a reasonable exercise of condemnation powers in
obtaining the former. The present exercise of the power has not been
shown to be unreasonable under the circumstances ***." Eden
Cemetery Ass'n, 16 Ill. 2d at 545-46. See
also People ex rel. City of Urbana
v. Paley, 68 Ill. 2d 62, 76 (1977) ("It is apparent
that the city of Urbana intends to undertake the redevelopment in
question primarily for the purpose of revitalizing an economically
stagnant downtown area. The purpose of the project is therefore clearly
and predominantly a public purpose, and the benefit reaped by private
developers is merely an inevitable incident thereto"); People
ex rel. City of Salem v. McMackin, 53 Ill. 2d 347, 355
(1972) ("While we acknowledge that there is a benefit to private
interests in the financing of industrial projects under the Act, we hold
that the principal purpose and objective of the Act is public in nature.
Therefore, it does not matter that there will be an incidental benefit
to private interests"); City of
Chicago v. Barnes, 30 Ill. 2d 255, 257 (1964) ("it does
not follow that because the land may later be sold to a private
developer its taking and clearance cannot have been for a public
purpose"). Turning
to the statute in the present case, I note that the legislature
determined that "labor surplus areas currently exist in the
southwestern part of the State" (70 ILCS 520/2(a) (West 1998)) and
recognized that "the economic burdens resulting from involuntary
unemployment fall in part upon the State in the form of increased need
for public assistance and reduced tax revenues and, in the event that
the unemployed worker and his family migrate elsewhere to find work, may
also fall upon the municipalities and other taxing districts within the
areas of unemployment in the form of reduced tax revenues, thereby
endangering their financial ability to support necessary governmental
services for their remaining inhabitants." 70 ILCS 520/2(b) (West
1998). The legislature also found "[t]hat a lack of decent housing
contributes to urban blight, crime, anti-social behavior, disease, a
higher need for public assistance, reduced tax revenues, and the
migration of workers and their families away from areas which fail to
offer adequate, decent, affordable housing." 70 ILCS 520/2(d) (West
1998). Thus, the legislature described in detail the conditions the Act
was designed to eliminate. Further,
the legislature declared that "decent, affordable housing" (70
ILCS 520/2(e) (West 1998)) and access to "educational institutions,
recreation, parks and open spaces, entertainment and sports, a reliable
transportation network, cultural facilities and theaters" (70 ILCS
520/2(f) (West 1998)) should be available to every citizen. The
legislature also declared that "the State has a responsibility to
help create a favorable climate for new and improved job opportunities
for its citizens by encouraging the development of commercial and
service businesses and industrial and manufacturing plants within the
southwestern part of the State." 70 ILCS 520/2(c) (West 1998). The
legislature affirmed that "the main purpose of this Act is to
promote industrial, commercial, residential, service, transportation and
recreational activities and facilities, thereby reducing the evils
attendant upon unemployment and enhancing the public health, safety,
morals, happiness and general welfare of this State." 70 ILCS
520/2(g) (West 1998). The
legislature created SWIDA to promote development in Madison and St.
Clair Counties. It charged SWIDA with the duty to assist in the
development, construction and acquisition of industrial projects,
housing or residential projects, and commercial projects including
cultural facilities such as sports training facilities, racetracks, and
parking facilities. 70 ILCS 520/3, 520/6 (West 1998). In turn, SWIDA
issued $21.5 million of bonds to facilitate the development of the
racetrack. SWIDA now seeks to condemn the Property to further the
development of the racetrack by increasing available parking. The
development of parking facilities is both a project contemplated under
the Act and part of the continued development of the racetrack. This
court has previously upheld the validity of legislative enactments
designed to assist economic development (People
ex rel. City of Canton v. Crouch, 79 Ill. 2d 356, 364
(1980); Paley, 68 Ill.
2d at 76; McMackin, 53
Ill. 2d at 358), to prevent or eliminate blight involving both
structural infirmity and economic deterioration (Paley,
68 Ill. 2d at 74; Barnes,
30 Ill. 2d at 256; People ex rel.
Gutknecht v. City of Chicago, 3 Ill. 2d 539, 545 (1954); Chicago Land Clearance Comm'n v. White, 411 Ill. 310, 316
(1952); Cremer v. Peoria Housing
Authority, 399 Ill. 579, 588 (1948); Zurn
v. City of Chicago, 389 Ill. 114, 128 (1945), and to promote
public safety (Eden Cemetery Ass'n,
16 Ill. 2d at 544). See also Adamowski,
14 Ill. 2d at 236 (blighted conditions, promotion of the growth and
development of the city and the relief of traffic congestion). Such
legislative determinations are well within the State's police powers. In
the present case, the majority cannot dispute the legislative findings
regarding the need to alleviate certain economic, housing and other
conditions in the southwestern part of this state. Nor can the majority
dispute that alleviation of these conditions furthers certain public
purposes. The legislature is, after all, "the main guardian of the
public needs to be served by social legislation." Berman,
348 U.S. at 31-32, 99 L. Ed. at 37, 75 S. Ct. at 102. And, the
legislature has determined, as it well may, to use the power of eminent
domain to realize its objective. See Berman,
348 U.S. at 31-32, 99 L. Ed. at 37, 75 S. Ct. at 102. The legislature
has vested in SWIDA the power of eminent domain so that SWIDA may assist
in the development of housing, industrial and commercial projects in the
area. The legislature has also given SWIDA the power to issue bonds to
generate the financial wherewithal for the development of the projects.
The means employed by the legislature to further the public purposes at
issue are not irrational. Applying
the holdings of Hawaii Housing
Authority and Berman,
this court should defer to the legislative determination of the public
use. Although the majority acknowledges that great deference is due the
legislative determination (see slip op. at 9), the majority does not act
in accordance with such deference. Indeed, the majority does not afford
any measure of deference to the legislative determination. The
majority opinion is alarming both for its use of selective portions of Hawaii
Housing Authority and Berman
and for its attempt to engraft an additional principle upon the public
use doctrine. The majority states, " 'A
purely private taking could not withstand the scrutiny of the public use
requirement; it would serve no legitimate purpose of government and
would thus be void.' Hawaii Housing
Authority, 467 U.S. at 245, 81 L. Ed. 2d at 200, 104 S. Ct.
at 2331. As this court held in Gaylord,
204 Ill. at 584, '[t]he public must be to some extent entitled to use or
enjoy the property, not as a mere favor or by permission of the owner,
but by right.' " Slip op. at 10. The
majority fails to acknowledge, however, that the Court in Hawaii
Housing Authority specifically rejected a requirement that
the property be put into use for the public, "The
Court long ago rejected any literal requirement that condemned property
be put into use for the general public. 'It is not essential that the
entire community, nor even any considerable portion, ... directly enjoy
or participate in any improvement in order [for it] to constitute a
public use.' [Citation.] '[W]hat in its immediate aspect [is] only a
private transaction may ... be raised by its class or character to a
public affair.' *** [G]overnment does not itself have to use property to
legitimate the taking; it is only the taking's purpose, and not its
mechanics, that must pass scrutiny under the Public Use Clause." Hawaii
Housing Authority, 467 U.S. at 243-44, 81 L. Ed. 2d at 199,
104 S. Ct. at 2331. Not
only is the majority disingenuous in its citation to Hawaii
Housing Authority and Berman
but it seeks to unravel the holdings of these opinions, for in imposing
a requirement that the property be put into use for the general public,
the majority effectively interdicts any taking for the purpose of
economic development. I
must inquire of the majority what development project can satisfy the
requirement that the public be "entitled to use or enjoy the
property, not as a mere favor or by permission of the owner, but by
right"? Can a member of the general public enter a manufacturing
plant as of right? What of a sports facility? Can a member of the
general public enter a stadium, or for that matter the racetrack at
issue, without paying a fee for the privilege? The majority states, "We
also acknowledge that a public use or purpose may be satisfied in light
of public safety concerns. See Illinois
Toll Highway Comm'n v. Eden Cemetery Ass'n, 16 Ill. 2d 539
(1959). The public is allowed to park on the property in exchange for
the payment of a fee. Gateway's racetrack may be open to the public, but
not 'by right.' " Slip op. at 10-11. Again,
I ask what project will survive the majority's requirement of use as of
right by the general public? I
suggest that, in its attempt to reach a particular result, the majority
does great harm to the public use doctrine and to the interests of this
state. B.
Particular Taking The
majority errs in other ways. In considering the taking at issue, the
majority applies the wrong standard of review and ignores the evidence
adduced at trial. Section
7-104(b) of the Code of Civil Procedure provides in part: "At
the [quick-take] hearing, if the court has not previously, in the same
proceeding, determined that the plaintiff has authority to exercise the
right of eminent domain, that the property sought to be taken is subject
to the exercise of such right, and that such right is not being
improperly exercised in the particular proceeding, then the court shall
first hear and determine such matters." 735 ILCS 5/7-104(b) (West
1998). A
finding on each of these three issues amounts to a determination of
whether or not the plaintiff has the right to take the property by
eminent domain. See Department of
Public Works & Buildings v. Dust, 19 Ill. 2d 217, 219
(1960). As this court noted in Department of Transportation v. First Galesburg National Bank &
Trust Co., 141 Ill. 2d 462, 468 (1990), the plaintiff has
only such powers of eminent domain as are conferred upon it by the
legislature. See also Department of
Public Works & Buildings v. Keller, 61 Ill. 2d 320
(1975). The law conferring the right of eminent domain must be strictly
construed. First Galesburg National
Bank, 141 Ill. 2d at 469. When
a defendant files a motion to dismiss challenging the authority to
condemn, the burden is on the condemning authority to make a prima facie case of the disputed allegations. First
Galesburg National Bank, 141 Ill. 2d at 469; Keller,
61 Ill. 2d at 324. This burden may be met by introducing in evidence a
statute affirming the authority's right to acquire property by eminent
domain (see First Galesburg National
Bank, 141 Ill. 2d at 469), or a resolution and ordinance
approving the taking (see City of
Chicago v. Walker, 50 Ill. 2d 69, 71 (1971)). Once the
condemning authority has made a prima
facie case, the defendant is required to go forward with
evidence showing that there was an abuse of discretion by the condemning
authority. First Galesburg National
Bank, 141 Ill. 2d at 470; Keller,
61 Ill. 2d at 325. The courts will interfere only where an abuse of
discretion is shown, for as this court has held many times: "[W]hether
the exercise of the power of eminent domain is necessary or expedient to
accomplish an authorized purpose is not a question within the province
of the court to determine. The agency on which the power has been
conferred also has the authority to decide the necessity for its
exercise. In the absence of a clear abuse of this authority the courts
will not inquire into the necessity or the propriety of its
exercise." Keller,
61 Ill. 2d at 325 (citing Department
of Public Works & Buildings v. McNeal, 33 Ill. 2d 248
(1965), Forest Preserve District v.
Wike, 3 Ill. 2d 49 (1954), City
of Chicago v. Vaccarro, 408 Ill. 587 (1951), and Zurn
v. City of Chicago, 389 Ill. 114 (1945)). In
the present case, SWIDA satisfied its prima
facie burden of proof. Pursuant to section 8 of the Act,
SWIDA may acquire real property, or rights therein, upon condemnation.
70 ILCS 520/8(b) (West 1998). Section 5 of the Act commands SWIDA to
assist in the development of commercial projects, including racetracks
and parking facilities. 70 ILCS 520/5 (West 1998). SWIDA introduced into
evidence a resolution adopted by the St. Clair County board authorizing
the acquisition of the Property by use of quick-take eminent domain.
SWIDA also introduced into evidence a resolution it adopted to acquire
the Property by quick-take eminent domain. The resolutions state that it
is necessary to create additional parking areas for the racetrack to
safely and adequately service racetrack spectators and that the
acquisition of the Property for parking purposes will enhance the public
health, safety, morals, happiness, and the general welfare of the
citizens of southwestern Illinois through the creation of job
opportunities, the generation of additional tax revenues and the
expansion of the tax base within St. Clair County. This evidence
suffices for a prima facie
case. It
became incumbent upon NCE to introduce evidence showing that SWIDA had
abused its discretion. NCE failed in this undertaking. The evidence at
the hearing fully supports the circuit court's determination that taking
the Property will further economic development, promote safety, and lead
to the elimination of blight in the area. The
majority disagrees. As to the elimination of blight, the majority simply
states, "we are not dealing with a taking for the purposes of
eliminating slums or blight." Slip op. at 10. Nothing is said of
Ortbals' testimony on the subject. The
majority is more forthright on the subject of economic development. As
the majority notes, "SWIDA
presented extensive testimony that expanding Gateway's facilities
through the taking of NCE's property would allow it to grow and prosper
and contribute to positive economic growth in the region." Slip op.
at 11. However,
the majority quickly dispenses with this "extensive testimony"
of economic development. The majority simply notes that " 'incidentally,
every lawful business does this.' " Slip op. at 11, quoting Gaylord
v. Sanitary District, 204 Ill. 576, 586 (1903). The
majority reluctantly acknowledges the evidence regarding public safety.
The majority notes, "If
this taking were permitted, lines to enter parking lots might be
shortened and pedestrians might be able to cross from parking areas to
event areas in a safer manner." Slip op. at 11. However,
this acknowledgment fails to convey the full impact of the trial
testimony regarding public safety. Pritchett testified that it was
necessary, from a safety standpoint, for SWIDA to acquire the Property
for development of a parking lot. Ortbals testified that using the
Property for racetrack parking would alleviate the traffic back-ups on
Interstate 55-70 and allow racetrack patrons parked east of Illinois
Route 203 to gain access to the racetrack safely. Acknowledgment
aside, the majority then rejects the evidence as to the traffic safety
concerns. The majority states, "[W]e
are unpersuaded that these facts alone are sufficient to satisfy the
public use requirement, especially in light of evidence that Gateway
could have built a parking garage structure on its existing
property." Slip op. at 11. The
majority's conclusion is not supported by the record. Wolter testified
at trial that the racetrack had an immediate need for 2,000 to 5,000
parking spaces. Pook testified at trial that Gateway had considered
building a raised parking garage at the racetrack. However, building
such a garage was not economically feasible. NCE introduced no evidence
that building a raised parking garage with 5,000 parking spaces was
feasible, economically or otherwise. Given the number of parking spaces
at issue and NCE's failure to present any evidence on this matter, the
majority's conclusion demonstrates either a general misapprehension of
the nature of appellate review or a deliberate choice to substitute the
judgment of this court for the record and proper inferences to be drawn
therefrom. Moreover,
in questioning the necessity of the taking, the majority applies the
wrong standard of review. As noted above, this court has previously
recognized that "The
agency on which the power has been conferred also has the authority to
decide the necessity for its exercise. In the absence of a clear abuse
of this authority the courts will not inquire into the necessity or the
propriety of its exercise." Keller,
61 Ill. 2d at 325 (citing McNeal,
33 Ill. 2d 248, Wike, 3
Ill. 2d 49, Vaccarro,
408 Ill. 587, and Zurn,
389 Ill. 114). The
legislature has vested in SWIDA the power of eminent domain to assist in
the development of commercial projects including racetracks and parking
facilities. The acquisition of the Property being in furtherance of
three distinct public purposes, SWIDA did not abuse its discretion by
the use of its eminent domain powers. The evidence at trial is not
contrary and judicial intervention is unwarranted. CONCLUSION I
agree with the circuit court that SWIDA properly exercised its power of
eminent domain. The taking of the Property was for a public use, not a
private use. The majority errs in its application of the standard of
review. The majority also errs in its willingness to dispense with
strong evidence at trial supporting the circuit court's decision.
Lastly, the majority commits great disservice to the State of Illinois
and its citizens in engrafting upon the public use doctrine the
requirement that property taken by eminent domain must be accessible to
the general public as of right. This requirement is the death of social
legislation in furtherance of economic development and revitalization. I
respectfully dissent. JUSTICE
McMORROW joins in this dissent. http://shipmangoodwin.com/images/sgimages/docket_no_87809.htm
|