Recent Developments in Zoning and Land Use Law

Recent Developments in Zoning and Land Use Law Municipal Attorneys Seminar Illinois Municipal League Friday, March 18, 2011 (Bloomington) Julie A. Tappendorf ANCEL, GLINK, DIAMOND, BUSH, DICIANNI & KRAFTHEFER, P.C. 140 South Dearborn Street. Sixth Floor Chicago, Illinois 60603 (312) 782-7606 www.ancelglink.com jtappendorf@ancelglink.com Copyright Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer, P.C. 2011

JULIE A. TAPPENDORF is a partner with the law firm of Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer, P.C. in Chicago. She practices in the area of local government, land use, economic development, and zoning litigation. Julie currently serves as Village Attorney for the Villages of Gilberts, Lindenhurst, and Island Lake, and counsel to the Village of Wadsworth and Glencoe Police Pension Board Fund. She is a frequent speaker at local and national conferences on government issues, such as federal land use claims, climate change, social networking by government bodies, housing and the economy, sunshine laws, ethics, historic preservation, and architectural controls. Julie has published on a variety of land use and related government issues, including books on development agreements and exactions, and chapters and articles on architectural design, annexation and subdivisions, and regulating distressed properties. Julie is a coauthor of the land use casebook Planning and Control of Land Development: Cases and Materials, recently published by LexisNexis (8 th Ed. 2011). She is an Adjunct Professor at The John Marshall Law School and a Faculty Member of the American Law Institute-American Bar Association's Land Use Institute. Julie earned her J.D. from the University of Hawaii, William S. Richardson School of Law and her B.A. from Illinois State University. Prior to her law career, she served in the United States Army, Military Intelligence Branch, as a Korean cryptologic-linguist. 2

PART ONE: LAND USE LEGISLATION ENACTED Prohibition of Political Signs HB 3785 (P.A. 96-0904). HB 3785 amends the Zoning Division of the Municipal Code to establish that other than reasonable restrictions as to size, no home rule or non-home rule municipality may prohibit the display of outdoor political campaign signs on residential property during any period of time, the regulation of these signs being a power and function of the State and, therefor, this [... ] is a denial and limitation of concurrent home rule powers and functions under subsection (i) of Section 6 of Article VII of the Illinois Constitution. As a result, home rule and non-home rule municipalities is prohibited from placing time restrictions on the display of outdoor political signs on residential property. Reasonable restrictions on the size of political signs are permitted. Publication of Notices - HB 5232 (P.A. 96-1144). This new law provides that when a publication in a newspaper is required and there is no newspaper published in the county where a unit of local government or school district is located, notice by publication must be given in a secular newspaper located in an adjoining county having general circulation within the unit of local government or school district. The law further provides that whenever notice is required by law, order of court, or a contract to be published in a newspaper, the newspaper publishing the notice must, at no additional cost to government, place the notice on the statewide website established and maintained as a joint venture of the majority of Illinois newspapers as a repository for the notices. Annexation Notices - HB 5671 (P.A. 96-1049). This new law provides that, if a specified territory containing 60 acres or less in an unincorporated county is to be annexed by a municipality, then the annexing municipality must provide at least 10 days' prior written notice of the time and place of the passage of the annexation ordinance to the corporate authorities of the county where the territory to be annexed lies, in addition to all of the other notices required pursuant to Section 7-1-13 of the Illinois Municipal Code. 3

PROPOSED Procedural Rules for Zoning - H.B. 1055 and 1056 (2011). These bills would establish procedural rules for zoning hearings on an application for a special use, variance, rezoning, or zoning amendment. The legislation would set forth the due process procedures concerning notice, subpoenas, and presentation of testimony and evidence at a zoning hearing. The Illinois Municipal League currently opposes Ill. H.B. 1056. Notice by Publication on Website H.B. 1869 (2011). Under this legislation, if a statute requires a unit of local government or school district ( local government ) to publish a public notice in a newspaper, the local government may choose to satisfy that requirement by publishing the public notice on its own website, accessible to the general public, for the same time periods applicable to the newspaper publication. If a public notice is published on a website in this manner, then the local government must publish a notification of the website publication in a newspaper which states the website notice is available, the accurate website address of the local government, and a location where print versions of the notice are available. The local government would have to maintain accurate records of the content and duration of each website publication for public inspection. If the website becomes temporarily unavailable due to technical reasons, a public notice published on a website is not invalidated provided that the public notice is available to the general public for at least 75% of the time that the public notice is required to be available. This bill is supported by the Illinois Municipal League, and opposed by the Illinois Press Association and AARP. Notice for Zoning Hearing - H.B. 3473 (2011). Prior to any hearing on a zoning amendment, the zoning commission for any county, township or municipality would have to serve written notice on the property owners of all property within 250 feet in each direction of the location for which the proposed ordinance will apply. Additionally, the zoning commission would also have to post the address of the property for sitespecific proposals and notify individuals and interest groups with a known interest in a proposal. Non-Home Rule Development Incentives - H.B. 1730 (2011). This proposal would allow municipalities to provide economic incentives to encourage economic development within the community. Non-home rule municipalities are currently limited in the incentives that they may offer to attract economic development to the municipality. Developer Form of Security - H.B. 0262 (2011). This legislative change would allow municipalities and counties, rather than developers, the ability to decide whether developers will need a bond or letter of credit for public improvements. It also would allow a municipality to require a developer to post a cash bond. Under current law, developers can choose whether they want to provide a bond or letter of credit to municipalities and counties for public infrastructure improvements. Plat Act Exceptions - H.B. 2090 (2011). This proposed legislation would amend the Illinois Plat Act to provide that the subdivision plat filing exemptions do not invalidate or otherwise excuse compliance with any local requirements applicable to the subdivision of land, with certain exceptions for utilities, railroads, and highways or to correct a prior conveyance. 4

PART TWO: RECENT LAND USE DECISIONS Zoning and Home Rule Condominium Ass'n of Commonwealth Plaza v. City of Chicago, 399 Ill.App.3d 32 (2010). Neighboring property owners challenged a City zoning amendment for an Institutional Planned Development (IPD), allowing a hospital to construct a medical office building and other improvements. The neighbors brought suit under 65 ILCS 5/11-13-25, to declare that the IPD was void because it did not comply with existing City zoning ordinances. The trial court held that ordinances enacted by the City, a home-rule unit, may not be invalidated merely based on the City s failure to follow its own self-imposed regulations. The First District Appellate Court agreed. Home-rule units have full authority to zone, provided that their zoning does not violate constitutional standards. However, the IPD ordinances enacted by City are not rendered unconstitutional simply because they violated the City s own self-imposed ordinances in enacting the ordinance. To prevail, the neighbors would have to demonstrate an independent constitutional violation, distinct from the relationship between the IPD ordinances and prior ordinances. In order to do so, the neighbors would have to show that the IPD ordinances failed rational basis review, but the City easily demonstrated a rational relationship between the IPD ordinances and legitimate health care goals. The neighbors argued that such deference was unwarranted because zoning decision are subject to de novo judicial review under 65 ILCS 5/11-13-25(a). Nevertheless, zoning decisions are legislative decisions under Section 11-13- 25(a), and such decisions are entitled to rational basis review. Ruisard v. Village of Glen Ellyn, 939 N.E.2d 1048 (Ill. App. Ct. 2d Dist. 2010). In 1991, a home rule Village adopted an ordinance authorizing a special use permit for the construction of a water tower, on condition that antennas on the tower were to be kept at a minimum. In 2007, the tower had 13 antennas, and the Village adopted an ordinance authorizing a special use permit for the installation of 9 additional antennas, and finding that only allowing antennas from three telephone companies on the tower kept antennas at a minimum. Neighboring landowners challenged the issuance of the special use permit for the construction of this 7-foot, 5-inch Megapod antenna structure atop the 125-foot water tower. The neighbors claimed that the highly visible, galactic structure violated the at a minimum requirement of the 1991 special use permit. The trial court dismissed the claim, and the neighbors appealed. According to the Second District Appellate Court, the pivotal issue in this case was whether the neighbors alleged a violation of the 1991 special use permit, based on the adoption of the 2007 special use permit. The Village tried to argue it impliedly amended the 1991 special use permit, however the Village made an explicit finding that the 1991 at a minimum requirement was satisfied in the adoption of the 2007 special use permit. Citing Condominium Ass'n of Commonwealth Plaza v. City of Chicago, 399 Ill.App.3d 32, 40, (1 st Dist. 2010), the Appellate Court noted that the Village could have simply amended the at a minimum condition in the 1991 special use permit. Instead, the Court found the Village attempted to harmonize the ordinances by tortured logic, and went on to analyze whether the 2007 special use permit satisfied the at a minimum requirement. Fortunately for the Village, the Court deferred to the Village interpretation of the ambiguous at a minimum requirement. As a result, the neighbors failed to state a claim that the at a minimum condition in the 1991 SUP was violated. 5

Zoning Notice and Due Process Passalino v City of Zion, 237 Ill.2d 118 (2010). In Passalino, property owners filed suit against the city to invalidate a zoning amendment that prohibited the use of their land for the construction of multi-family buildings. The trial court concluded that newspaper publication for notice of a comprehensive zoning amendment, as provided by statute, was unconstitutional as applied to the property owners. The court held that the owners were entitled to actual notice under the Constitution, and that the comprehensive zoning amendment was void. On appeal, the City argued that plaintiffs received adequate notice, as required by 65 ILCS 5/11-13-2. While the supreme court agreed the notice complied with statute, it concluded that the statute was unconstitutional as applied to these facts. Specifically, the court noted that notice by publication is not sufficient with respect to an individual whose name and address are known and easily ascertainable, especially where the owner had been receiving tax bills from the City for the affected property since 1973. Where it would have cost the City approximately $30 to mail notices to all affected property owners, the interests of the City were outweighed by the property owners interest in additional process. The court also made light of the fact that the published notice appeared underneath an advertisement for Oneida Bingo Casino and underneath a scuba diving advertisement. In any event, the Supreme Court limited the application of its opinion to the facts of the case. Vested Rights 1350 Lake Shore Associates v. Randall, 401 Ill.App.3d 96 (1 st Dist. 2010). In 1978, the City approved the Developer s application for a zoning change to allow for the construction of a 40-story apartment building. It was not until 1996 that the Developer started investigating a development on this property. The size of the proposed development proved to be controversial, leading an alderman to introduce an ordinance to down-zone the Developer s property. The next day, the Developer submitted plans to the City, but they did not act until the City adopted the ordinance to down-zone the property. Years of litigation and appeals followed. Ultimately, the Supreme Court decided that the Developer could not have reasonably expected its project to be approved after the introduction of the down-zone ordinance, and the case was remanded to determine if the Developer s expenditures prior to that date were substantial enough to give the Developer a vested right in continuation of the prior zoning. On remand, the trial court found $272,022.18 in pre-development costs prior to the introduction of the ordinance, and concluded these costs were not substantial enough for the Developer to acquire a vested right, noting that they reflected only ½ to 1% of the entire proposed project cost. On appeal, the Appellate Court noted that a comparison of the expenses incurred to the total projected cost of the development is the recent trend in judicial determinations of whether expenditures are substantial enough to acquire a vested right. Based on a totality of the circumstances, and the small proportion of the expenditures in reference to the projected cost of the development, the determination of the trial court was affirmed. 6

Takings Muscarello v. Ogle County Board of Commissioners, 610 F.3d 416 (7 th Cir. 2010). A property owner sued Ogle County alleging that the county s approval of special use permit to allow the construction of 40 windmills on adjacent property was a taking of her property. The district court dismissed the complaint finding that the federal court was not the proper forum, and the plaintiff appealed to the Seventh Circuit Court of Appeals. The court of appeals held that the special use permit approval was not a taking, that the plaintiff s case was not ripe under Williamson County because she had not exhausted her state remedies Annexation and Disconnection Falcon Funding LLC v. City of Elgin, 399 Ill.App.3d 142 (2d Dist. 2010). After an annexation agreement had expired, the current owner of the property filed a petition for disconnection. The city claimed that the owner was equitably estopped from disconnecting the property because the owner induced the city to provide over $9 million in sewer and water connections to the property in reliance on the annexation agreement, and the owner never developed the property. The owner claimed that the city was not entitled to use the doctrine of equitable estoppel as an affirmative defense because the agreement had expired. Citing Gaylor v. Village of Ringwood, 363 Ill.App.3d 543 (2d Dist. 2006), the appellate court held that the doctrine of equitable estoppel was available as an affirmative defense in disconnection cases even if the annexation agreement had expired. However, because the city failed to sufficiently plead the elements for an equitable estoppel, the property was subject to disconnection. Village of Glendale Heights v. Glen Ayre Enterprises, Inc. 404 Ill.App.3d 205 (2d Dist. 2010). The Village brought suit against a property owner to enforce various zoning ordinance violations. The owner raised an affirmative defense that the property was not subject to the Village s zoning because it had never been validly annexed into the Village. The Village responded that the owners were barred from seeking to overturn the annexation by the one year statute of limitations for annexation challenges. The court agreed, finding that the one year statute of limitations for annexation challenges also applies to affirmative defenses. In re Southcreek Development, LLC, 2010 WL 4683607 (C.D. Ill. 2010). The Village and Southcreek Development entered into an annexation agreement in 1996, amended in 1997, to govern the annexation and development of 314 acres in unincorporated Kankakee County. The property was subsequently annexed and zoned. In 2009, the Village filed suit against Southcreek to enforce its obligation under the agreement to improve the Frontage Road because construction had not yet commenced. Shortly thereafter, Southcreek filed for bankruptcy and listed the Village as a creditor for the estimated costs of improving Frontage Road. The Village filed a motion to protect its interest in the property, and argued that the property could not be sold without satisfaction of the road improvement requirement of the annexation agreement. The bankruptcy trustee filed a motion to dismiss, challenging the validity of the annexation agreement. Citing the Glen Ayre case, the court denied the trustee s motion to dismiss, holding that it was an affirmative defense that was barred by the one year statute of limitations for challenges to annexation agreements. 7

Religious Land Uses River of Life Kingdom Ministries v. Village of Hazel Crest, 611 F.3d 367 (7 th Cir. 2010). The Church applied for special use permit to operate in a commercial district and was denied. After the Church s request for a permit was denied, it filed a suit under RLUIPA to allow it to locate in the Service Business District, and sought a preliminary injunction to allow it to locate on the property while the RLUIPA suit was proceeding. During the pendency, the Village amended its ordinance to exclude from the District, among other things, community centers, nonreligious schools, meeting halls, art galleries, and recreational buildings. Both sides concede that this was done to bring the applicable ordinance into compliance with RLUIPA. The Court upheld the lower court s denial of the church s request for a preliminary injunction, noting that the village sought to create a tax revenue-generating commercial district, and that all of the permitted entities are commercial in nature, which churches, meeting halls, community centers and schools are not. The Court concluded that, A locality seeking to create a commercial area should be able to exclude non-commercial uses that do not contribute to its goal without violating RLUIPA. International Church of the Foursquare Gospel v. City of San Leandro, No. 09-15163 (9th Cir. February 15, 2011). The Foursquare Gospel Church filed a lawsuit against the city alleging violations of RLUIPA, the Civil Rights Act, and the First Amendment after the city denied a rezoning application and a conditional use permit to allow new church facilities on industrial land in the city, and that such a denial violated the "substantial burden" and "equal terms" provisions under RLUIPA. The district court granted the city's motion for summary judgment, finding that the city's denial of the church's rezoning and CUP applications did not violate the substantial burden provision of RLUIPA. The court reasoned that a zoning law, as a neutral law of general applicability, can impose only an incidental burden, and does not trigger RLUIPA's strict scrutiny standard. The district court also rejected the church's contention that the city's conduct violated the Equal Terms provision of RLUIPA, as well as its First and Fourteenth Amendment claims. The Ninth Circuit reversed and remanded, finding that there was an issue of fact regarding whether the city imposed a substantial burden on the church's religious exercise under RLUIPA, which precluded summary judgment. The court noted that while the zoning scheme itself may be facially neutral and generally applicable, the individualized assessment that the city made to determine that the church's rezoning and CUP request should be denied was not. The Ninth Circuit also found that the city's claimed need to preserve properties for industrial use for revenue generating purposes did not qualify as a compelling governmental interest. Legend Night Club v. Miller, No. 09-1540 (4th Cir. February 17, 2011). Plaintiffs operated adult entertainment establishments in Prince George's County, Maryland, which were licensed by the county to serve alcoholic beverages. The state enacted legislation that placed restrictions on the clothing and conduct in establishments licensed to sell alcoholic beverages. In 2005, plaintiffs filed separate complaints challenging the constitutionality of state statutory amendments, which, if enforced, would prohibit them from providing both alcoholic beverages and adult entertainment. The plaintiffs argued that the new law was overbroad in violation of the First Amendment and that the grandfather clause violated the Equal Protection 8

Clause of the Fourteenth Amendment because it carved out an exception for a politically connected business. The district court agreed and ultimately issued a permanent injunction against its enforcement. On appeal, the Fourth Circuit affirmed the district court, finding that nothing in the statute indicated the motivation for its adoption, nor did defendants present any studies to establish the secondary effects supposedly targeted by the amendment. Second, the statute imposed restrictions that extended well beyond strip clubs and other establishments primarily offering adult entertainment, and a statute prohibiting such a broad swath of expressive conduct would not pass constitutional muster. Moreover, while defendants argued that the statute has been, and will be, enforced only against adult entertainment establishments, they did not propose a way to read the statute such that it would apply only to those licensees. 9