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State of the State: Whose right is it, anyway? States play the domain game with private property

Bethany Jaeger
WUIS/Illinois Issues

Picture a husband and wife refurbishing their 100-year-old home and opening a bed and breakfast that overlooks a lake in an old resort community. Then imagine a construction crew erecting three-story townhouses right across the street and clearing the way for 39 condominiums in hopes of attracting businesses to a sleepy town.

The plot of land that encompasses the condos and the bed and breakfast is part of a tax increment financing district, an area set aside to boost economic development in Lake Zurich, a northwestern suburb of Chicago and a former resort town. And that has the bed and breakfast owners worried the town could grab their property against their wishes. 

Lawmakers found that Illinoisans throughout the state share these worries, so they approved legislation aimed at clarifying the rights of property owners and communities. 

Under federal case law, government can take private property and give it to private developers for economic development that would benefit the entire community. But it also allows states to enact limits, which is exactly what the Illinois General Assembly wanted to do this spring. 

Under a measure sent to the governor, future TIF districts would operate under new rules making it more difficult and more expensive for governments to take private property.

This private-public conflict over land use is at the crux of a national debate that has been on the political burner since the U.S. Supreme Court decision in Kelo v. New London a year ago this month. The controversial ruling gave a Connecticut town the power to take private land to further economic development. 

Landowners balked for the same reason Justice Sandra Day O'Connor dissented. She wrote: "All private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded." In other words, lawmakers decide whose property to take, whom to give it to and what it will be used for. O'Connor said that wipes out the distinction between public and private uses of land that has been protected by the Fifth Amendment to the U.S. Constitution since 1791.

The Illinois Bill of Rights goes one step further, restricting governments' ability to redefine those property rights. Illinois landowners were reassured in 2002 when the state Supreme Court confirmed that governments can't justify taking private land and giving it to a private entity — in this case, a NASCAR racetrack — by claiming it would benefit the general public. 

Because the state's courts have repeatedly swung the pendulum in favor of individual landowners, some question whether the state actually needs a new law in response to Kelo. But, argues Thomas Geselbracht, a partner at DLA Piper Rudnick Gray Cary and an instructor at Northwestern University School of Law, there's always room for more landowner protections.

Times have changed. We're embeded in sprawling suburbs and surrounded by fewer farms.

Times have changed. We're embedded in sprawling suburbs and surrounded by fewer farms. And local governments are doing everything they can to spur economic development, even if that means uprooting people from their homes.

That doesn't sit well with the American public, Geselbracht says. He adds that the Kelo decision was expected, given the Supreme Court's makeup and the support for government in case law. "And yet it generated a firestorm of public opinion that I've never seen before, and I've been doing this for 30 years," he says. "The question is why. I think people are upset that in this country, people that play by the rules can end up losing their land."

Kelo, then, spurred states to take a deeper look at the overall process of land acquisition. Illinois, and nearly every state, has considered ways to strengthen protections of private landowners while encouraging municipalities to revive downtowns.

After many public hearings and multiple drafts, Illinois lawmakers agreed on a measure that further scales back the power granted under Kelo. The proposal is sitting on the governor's desk, and his office says it's currently "under review."

If Gov. Rod Blagojevich signs it into law, that would ensure balance in what state Sen. Susan Garrett calls a lopsided process. 

"The municipalities had all the authority and the expertise and the resources," she says. "And the property owner, because nothing was written into state law, they had no choice but to relinquish everything or hire an attorney." And property owners, she says, have to pay all court costs, despite having a slim chance of winning.

The Lake Forest Democrat sponsored the measure in her chamber this spring. "We leveled the playing field, and we made the state statutes very clear on what the condemning authority's rights are and what the property rights are for the private owner."

Rep. John Bradley took up the effort in the House. The Marion Democrat and attorney received praise on his chamber's floor last month for including all sides in the discussion and finding a compromise that was approved overwhelmingly in both chambers. The proposal that went to the governor makes it more difficult for municipalities to take land. And, in the limited instances in which they can acquire private property, the measure increases the value for the landowner.

The measure also eases some concerns of municipalities by exempting existing tax increment financing districts and the O'Hare International Airport expansion project so that those efforts can't be halted midstream.

Municipalities still aren't thrilled, but they say the measure is "livable." Roger Huebner, general counsel for the Illinois Municipal League, says members of his group can live with the proposal because it recognizes the ways in which government recruits private developers to revive deteriorating or underused property.

But the measure isn't perfect. Huebner says the substantial change in the law would cost municipalities more money if property owners hold out for bigger settlements. And, he says, interpreting the new language will take time and require court filings at the government's expense. 

He agrees the changes did put more balance in the system, but he and many others question why a new law is needed.

A couple who might know is Fred and Suzanne Branding of Lake Zurich. They hope the state does enact a law that will prevent future economic development projects from turning landowners into sitting ducks.

For four years Suzanne Branding has worried about the future of her home- turned-bed-and-breakfast. "We're always at the risk of being condemned for whatever reason," she says. "If they think they can make an extra buck by taking our property away, they'll do it in a minute."

The village intends to build condos to guarantee a consumer base, attracting business, says Craig Taylor, a village trustee on the Planning and Development Committee. 

Proponents also hope the extra revenue will relieve the taxpayers' burden of maintaining the aging area. 

"The sewer and the water lines and electric, the maintenance of that was a drain on the general fund," Taylor says. "In fairness to the rest of the residents, they were, in essence, subsidizing the improvements. I don't know that was fair. You try to strike a balance."

Public meetings were held, but the Brandings say they never felt part of the process nor as though their concerns were truly heard. Instead, they felt like obstructionists.

Fred Branding, a lawyer, says the proposed condominiums aren't a good fit for the area. "It's too much. It's too dense. It's too high. It's too big," he says. "We don't object to the redevelopment, but we object to the enormity of it." 

The village did come under fire from some property owners, but Taylor says all cases were settled out of court.

Suzanne Branding says that doesn't mean everyone's content. "[Home-owners] don't really know and understand what's going on because they're busy putting food on the table, getting kids to school, getting to their jobs," she says.

She was one of them until she felt as though her neighborhood came under siege. "The reason that I'm so passionate about it is, it's just not the right thing to do. 

"In TIF districts, for the most part, especially in the suburbs, the reason that your property is being condemned and taken away from you is so a developer can redevelop the property and make money on it. So what's happening is, people are making money on other people's backs. And the government not only is giving them permission to do this, but they're encouraging them to do it."

Taylor says the village's plans are not about power, but about what's best for the community. "As painful as eminent domain is, we certainly tried to minimize the impact on everyone involved and be as fair as possible," he says. "Seriously, none of us on the board took this lightly at all. It's a gut-wrenching experience when you're talking about places where people live."

Cases like Lake Zurich's resonate statewide, but Bradley says he hasn't heard from the governor. "I would hope that he would look at the large number of votes [the measure] received in both chambers and recognize the people of Illinois want this to happen." 

In the meantime, Geselbracht says, there's no telling where the momentum will stop. "For many years, the pendulum was swinging in favor of the government. Now I think the pendulum is clearly swinging back in the other direction," he says. "Will it swing too far? Clearly, time will tell." 

 


Bethany Carson can be reached at capitolbureau@aol.com.

Illinois Issues, June 2006

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