Land and Economic Development Law
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During all of its over 70 years, Ancel, Glink has helped its clients in issues relating to land and economic development. The firm has assisted municipalities and other governmental bodies to incorporate, and it has advised them as their boundaries expanded. Attorneys at the law firm wrote the original draft, and a number of amendments to the statute which permits municipalities to enter into annexation agreement with a term of up to 20 years, which typically govern the development of land. Those agreements often contain provisions which are different from the standard zoning ordinances of the municipality. In many cases, such annexation agreements contain the terms and conditions of special uses granted to the developer, including planned unit developments.
We have assisted our municipal clients in the process of creating and adopting comprehensive plans. This is a familiar process for a number of our attorneys who served as in-house employees in governmental planning departments. We have always recommended bringing into that process other governmental bodies such as townships, school districts, park districts, library districts and fire protection districts. Part of the process in the creation of the comprehensive plans is typically the development of an official map. That document describes locations within the community which should be set aside for public purposes.
Through the use of the comprehensive plan, the official map and the subdivision code, the municipality is permitted to require the developers of land to donate land for certain public purposes or to pay cash in lieu of land contributions. Ordinances requiring such contributions are known as "impact fee ordinances," and we created such an ordinance for the City of Naperville, and defended the validity of that ordinance at the Illinois Supreme Court. By using an impact fee ordinance, and the devices of special uses, variances, planned unit developments and recapture fees, our lawyers have assisted municipalities in their goal of achieving planned development, the costs of which will be borne by new residents, rather than existing citizens.
Not all disputes regarding land development and zoning can be settled. Our attorneys have litigated dozens of cases in which communities have attempted to uphold, usually successfully, their philosophical position regarding the intensity and manner in which land should be developed. In a less adversarial way, we have worked with governmental clients of all kinds in efforts to achieve common planning goals through intergovernmental agreements. Such agreements often result in land being purchased by one government, developed by a second and maintained by a third. This process can be extremely creative, especially where one of the contracting parties is a home rule community.
We have not only represented communities which are on the edge of development, but also many municipalities which wish to retain a viable central business district. Through our expertise in areas such as special assessments, special service districts and tax increment finances, we have assisted communities in efforts at public, private partnerships aimed at the retention and expansion of existing businesses and the relocation or creation of commercial ventures new to the community. We are often called in as special counsel to work on such projects.
Finally, although our principal business is the representation of governmental bodies, our lawyers have, from time-to-time, represented the owners of real estate in their developmental efforts. Because our firm is well known as an advocate for local governmental issues, we carefully select the developers we represent. We have often been successful in that role, because our private sector clients permit us to suggest developmental solutions to governmental bodies which truly are in the best interest of all parties.
Frequently Asked Questions About
Land And Economic Development
1. Can a municipality annex land to which it is non-contiguous?
ANSWER: With few exceptions governmental bodies cannot annex territory unless the land physically touches current municipal borders for a certain distance. Except for the annexation of individual lots, the distance regarding vacant land appears to require a minimum area of joint touching of 300 feet. Governmental bodies cannot annex territory that touches as a single point diagonally across an intersection. Annexations conducted without contiguity, either at the time of annexation or at the time a lawsuit is filed can generally be contested even after the passage of time. Municipalities, however, can enter into annexation agreements with the owners of land which is not contiguous at the time the agreement is entered into. These agreements can last for up to 20 years and will govern the manner in which the property is to be developed and the regulatory powers of the municipality.
Attorneys at Ancel, Glinkhave drafted or reviewed hundreds of annexation agreements and several of our attorneys are the authors of a chapter of more than a hundred pages on the subject of annexation and annexation agreements found in the Illinois Institute for Continuing Legal Education's three volume handbook, Municipal Law and Practice In Illinois. Municipalities which are not careful in the negotiation and drafting of annexation agreements can find that they have sold their governmental birthright to regulate and benefit from development. Agreements like this, even if proven to be lawful, should be avoided. Most municipalities, with good advice, will find annexation agreements to result in both short and long-term benefits for their communities.
2. When can a municipality impose conditions on a zoning grant?
ANSWER: The general concept of zoning is to establish standard rules which govern the uses which are permitted in any zoning district. In order to accord property owners equal protection of the laws, governmental bodies are generally not permitted to impose what might be considered arbitrary and unilateral conditions upon the use of land. Although this is the general applicable legal principle, in practice, municipalities over the last 30 years have been permitted by statute and by court decisions to deviate from this rule of conformity.
Although courts have prohibited so called "contract zoning" in which a municipality enters into a separate contract covering the way pieces of land will be developed, devices such as annexation agreements, special uses such as planned unit developments and variances have allowed municipalities to imposed conditions on land development.
The statutes specifically allow a municipality and a real estate owner to agree to a contract, binding for a period of up to 20 years, as to the way in which the land will be developed and how the ordinances of the municipality will or will not apply to the land. The statutes also permit a governmental body to impose conditions upon the development of land when the owner requests and receives either a variance or a special use including the grant of a planned unit development. Municipalities should be cautious, however, to impose only conditions which specifically relate to the type of development being approved. Aside from an annexation agreement where the owner and the government have great freedom to contract, terms and conditions imposed by municipality as part of a variance or a special use, which have nothing to do with the development itself would be struck down by a court.
There is also, however, at least one case in Illinois where a court, while criticizing the practice, upheld the imposition of a condition as a part of a grant of a new zoning category. In that case, the permitted use involved, an intense industrial use, was highly susceptible to some added governmental regulation. There is, however, a case where a municipality, in granting a multi-family zoning category which would allow for a two-unit building, required a covenant guaranteeing that a basement apartment would not be converted into a third unit. There, the courts refused to recognize a recorded covenant stating that the municipality should simply enforce its ordinance without requiring solemn promises from property owners that they will not be violators of the established law.
The question has also been raised as to whether a municipality may grant a variance or a special use which is applicable not to the property itself but only to the person who applies for the zoning modification. Generally the granting of variances of special uses or planned unit developments "run with the land" and can be utilized by any subsequent property owner. In certain special cases where the municipality would not have granted the conditional use without knowledge of the special expertise of the applicant such limitation can likely be imposed.
3. How can we rehabilitate our aging central business district?
ANSWER: This frequently asked question has a diverse set of answers. Ancel, Glink has worked with many municipalities in successfully retaining the vitality of their central business districts while acting upon opportunities to develop new commercial centers. The retention of a vibrant central business district generally involves significant public-private partnerships. Municipalities must be willing to seek the support and ideas of established business leaders. Some municipalities have utilized the partial rebate of sales tax revenues or a special service area to fund grants to a chamber of commerce or similar organization. Such an organization can work with the municipal staff and consultants in developing a plan, often part of a revised comprehensive plan, for the retention of existing businesses and the attraction of new businesses. Among devices open to municipalities are the construction of parking lots and parking structures, the use of special assessments or special service districts for sidewalk improvements and grant programs for facade rehabilitation. Where the central business district is particularly depressed or where a problem area prevents wider development, communities have used tax increment financing districts to acquire parcels in multiple ownership and to sell or even give the land away in return for a binding promise from an economically stable developer who is prepared to carry out the terms and conditions of pre-negotiated development agreement. Sometimes the need for central business district assistance will permit a municipality to ask its voters for home rule powers so that it can better face up to these challenges. Municipalities with downtown areas near commuter rail lines have often considered and acted upon requests by developers to permit multi-family construction to take place on the outskirts of the central business district. Such improvements bring and retain more citizens for the downtown district and encourage the location of restaurants and other specialty stores in these locations. The methods by which municipalities can assist their business communities are varied and are best accomplished with the knowledge and cooperation of the citizens and tax payers.
4. How can a municipality enforce its zoning and building codes?
ANSWER: Municipalities generally have good success when they seriously have an intent to enforce their zoning and building codes. This process requires cooperation between the building officials, the village attorney and the village prosecutor. If the ordinances of the municipality are well written and clear, then the owner of the property, where a violation is suspected, should be notified of the alleged violation and given an opportunity to respond. If no response is forthcoming then the municipality may need to seek an administrative search warrant from the circuit court in order to fully inspect the property where the violation is suspected. The burden of proof to achieve such a warrant is not high. Armed with the evidence the municipality will need to determine whether its regular attorney or its prosecutor should pursue the case. In important or serious cases it is often better to file the ordinance violation, sometimes with an injunction count, as a specifically filed case in the circuit court rather than having it heard along with traffic tickets and other minor matters. Judges often pay more attention to a case which is not heard as part of a standard traffic call of cases. The municipality must be prepared to have appropriate witnesses in court and it often helps if neighbors who objected to the problem also appear. While the courts may be lenient in giving the property owners some period of time to correct the violation the patience of the trial courts are not inexhaustible. While it may take some time, money and effort to pursue, the patient municipality almost always achieve good results.
If such prosecutions do not achieve these results then the ordinances may need to be amended to correct any errors used out by the defense attorneys and accepted by the courts. Sometimes neighbors believe that a municipality is not aggressive enough in seeking to enforce its ordinances. On occasion, the neighbors feel that a violation of the ordinances have taken place but the municipality does not agree. Your municipality should be aware of and point out to such neighbors the fact that there is a provision in the State law which allows property owners whose land is located within 1,200 feet of property where an alleged ordinance violation has taken place to independently bring a suit to enforce compliance with the municipality's ordinances. In the event that the neighbors are successful in that suit, the court may award them attorneys' fees. 65 ILCS 5/11-13-15.
5. What is the liability of a governmental body if it turns down a developer's request?
ANSWER: If a municipality unnecessarily delays, refuses to consider, or rejects a developer's request relating to zoning, planning or construction the most common relief sought is the filing of a lawsuit asking for a writ of mandamus or a declaratory judgment. Mandamus is a legal device which a person can ask for in the event that a governmental body refuses to take an action which the applicant believes must be granted as a matter of right. An example would be a municipality which refuses to grant a building permit even though the plans comply with all of the municipality's ordinances. A lawsuit would allege that the municipality had no choice and no discretionary power to issue the permit. Where ordinances do give the municipality some discretion and the developer will argue that to do so could only result in an approval, the appropriate lawsuit to be filed is a declaratory judgment joined with a request for the issuance of a mandatory injunction. There the plaintiff asks the court to evaluate the matter and to "declare" that the inaction by the municipality or its negative decision is incorrect. Where the request of the applicant is for the granting of a rejected variance, special use or zoning map amendment the allegation of the complaint is that the denial by the municipality constitutes a violation of the developer's constitutional right to utilize its property.
Neither a declaratory judgment nor a mandamus lawsuit generally results in damages being paid by the municipality even if the court finds that the municipality has made an error in denying the applicant's request. In recent years, however, two other types of lawsuits have been developed which can result in a municipality or even, in some cases its officials, be required to pay damages. Both types of lawsuits are filed under federal law. That is because under State law, governmental bodies and their officials are entitled to substantial immunities in issuing permits or in otherwise exercising their discretion. Under federal constitutional law, however, as codified in the Civil Rights Act, governments and their officials can be assessed damages if they unconstitutionally diminish the value of property. Cases using this theory are continuing to work their way through the courts. At one time, such damages could only be assessed if the governmental body removed all value of the land such as prohibiting the owner of the land to build on a beach front for the benefit of other citizens. The courts concluded that such actions actually constituted a "taking" of the land by a government which should be forced to pay for the damages its excessive claimed regulation has caused to the land owner. Some judges have even concluded that any regulation by a governmental body or limitations in the use of land, except those are 100 percent related to safety, should come with a price wherein the government must compensate the property owner for any diminution in the value of the land. This law is still in transition.
In recent years, a series of Federal cases have found municipalities liable where applications by developers have been rejected as a result of no rational basis other than vindictiveness, typically as a result of some ongoing dispute between the property owner and the municipality. In one case a municipality refused to grant the right to connect to the municipality's water system to a property owner unless the owner donated a easement to the municipality twice as wide as was required of other citizens. The municipality eventually relented and plaintiff who had been without water at a home filed suit. The court found that if the core reason for the denial of water service, until the wider easement was granted was simply irrational hatred for the property owner, that would be a fact pattern on which damages could be awarded.
Finally, under Illinois law a municipality has near absolute discretion as to whether it wish to annex property to its municipal boundaries. Unless a decision is made on racial or similar discriminatory grounds no one property owner can force a community to annex their property or probably even to provide services to such contiguous but not annexed territory. On the other hand if the decision of the municipality to withhold some governmental service or even to regulate interferes with a person's religion or a religious institution both, State and Federal legislation require the governmental body to adhere to an extremely high standard of proof as to the correctness of the decision. Municipalities rejecting requests by religious institution or even individuals seeking to fulfill religious practices for zoning and building permit approval must consider this new legislative context.
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