An updated development plan around Chicago’s Blommer Chocolate Co. plant doesn’t invalidate the city’s initial taking of land through eminent domain, an appellate court has found.
The 1st District Appellate Court denied a motion to reconsider whether land near the cocoa-processing campus in River West was ill-gotten.
In an 18-page decision this week, the three-justice panel rejected claims made by the former landowner, Fred J. Eychaner, that the city’s justification for the taking changed midstream and that it mostly benefits Blommer’s owner, Fuji Oil Holdings, Inc., rather than the public.
The city approved the taking in the early 2000s so the factory could expand its campus, consistent with the River West Tax Increment Finance redevelopment plan, which aimed to preserve industrial jobs.
After the 1st District remanded the case back to the circuit court for a second trial on just compensation, the city introduced its North Branch Framework, promoting a different development plan for the area to attract companies and businesses “that drive Chicago’s knowledge-based economy.”
Eychaner argued the newly announced framework nullified the premise for the original taking. But the court this week wrote that while the details have changed, the goal of revitalization remains the same. And that goal is a worthy use of eminent domain.
“The [c]ity’s plans under the River West TIF, the redevelopment agreement, and the North Branch Framework continue to ‘carry out the same purpose of promoting ‘the economic revitalization of a conservation area,” Justice Michael B. Hyman wrote. “Thus, the trial court did not abuse its discretion in denying the motion to reconsider.”
The city council voted to take Eychaner’s land in 2002, not long after the River West TIF plan was designated. In 2005, it filed a complaint to condemn the property through eminent domain in Cook County Circuit Court.
It ultimately proceeded to a jury trial, in which Eychaner was awarded about $2.5 million. He appealed the denial of his traverse as well as the valuation, arguing the city’s taking was unconstitutional because it primarily benefited the chocolate company.
In 2015, the 1st District denied that claim. It cited the 2002 Illinois Supreme Court decision in Southwestern Illinois Development Authority v. National City Environmental, LLC, writing that deciding whether a development project is truly for the public good or a “sweetheart deal” in disguise can be tricky. But one indicator of a public-focused approach is a thoughtful, well-designed plan that can be openly vetted by citizens.
The River West TIF plan was such a plan, the court wrote in 2015, so the constitutional claim was rejected. But the panel remanded the case due to questions surrounding evidence about just compensation for the property, and Eychaner was ultimately awarded $7.1 million for the land.
While the case was on remand, the Chicago Plan Commission undertook a review of its industrial corridors and proposed allowing mixed-use development in a 760-acre area along the Chicago River’s North Branch that included Eychaner’s property and the Blommer factory. The city council also passed an ordinance creating a fund for the project and altered the zoning in the area from a planned manufacturing district to a downtown service zone.
After the second trial on compensation, Eychaner filed a post-trial motion, again challenging the constitutionality of the initial taking. He also sought reconsideration of the denial of his original traverse, arguing the North Branch Framework plan superceded the River West TIF plan, and without the latter, the justification for the original taking no longer existed.
He also argued it was “a naked transfer of private property through the power of eminent domain to benefit a private party — now Fuji Oil Holdings, Inc. It is a taking for private, not public use, and is thus barred in Illinois.”
On appeal, both parties conceded the law-of-the-case doctrine applied on the first claim. The appellate court can’t overrule itself in what was essentially the same legal case of whether the initial taking was constitutional, and Eychaner asserted he raised it again merely to preserve the question for the Illinois Supreme Court.
Hyman, joined by Justices John C. Griffin and Daniel J. Pierce, also found former Cook County Circuit Judge James M. McGing correctly rejected the motion to reconsider the original denial of Eychaner’s traverse.
The panel wrote that Eychaner was late in presenting claims about the North Branch Framework, noting the plan was in the works before the second trial on compensation. Some of the information about it was even presented during that trial, Hyman wrote.
“The circumstances plainly had changed; both parties were aware of it, as was the trial court. If Eychaner had filed his motion to reconsider beforehand and had prevailed, the parties and the court would have been spared the cost and time of conducting what would have been an irrelevant four-day jury trial on just compensation,” the court wrote.
“Instead, Eychaner waited until after the trial to ask the court to again consider the constitutionality of the taking based on evidence available well beforehand.”
The panel also wrote Eychaner didn’t show that the details of the North Branch Framework would change the outcome of a new trial. It noted that the River West TIF ordinance remains in effect until 2024, and the two concepts aren’t necessarily in conflict.
“Eychaner relies on what he deems ‘express language in the North Branch Framework stating that all prior plans are superseded.’ But he either purposely or erroneously misstates the language; it has nothing to do with the River West TIF,” Hyman wrote.
“The North Branch Framework states, ‘At least seven plans and studies have been completed since 2010 that provide recommendations which are relevant to the North Branch Industrial Corridor and its surrounding areas.’ It then identifies those specific seven plans. None involve the River West TIF plan.”
Finally, the justices noted Eychaner’s claim that the North Branch Framework was essentially a change in policy, from conserving industry in the area to relocating and replacing them with residential and commercial uses. But the court wrote the city has always been planning for redevelopment in the area.
They quoted from McGing’s ruling, in which he stated that “[h]ere there was a broad redevelopment plan implemented prior to the initial taking, and there was a broad redevelopment plan implemented at the time of the second trial.
“Changed circumstances in the manner of new developments in the subject area, which warranted the [c]ity conduct a new comprehensive study to determine what zoning best would promote its intention of economic revitalization of the conservation area bolsters its public purpose, rather than show an abuse of power.”
Justin A. Houppert, assistant corporation counsel, represented the city in the case.
“We are pleased that the appellate court ruled in favor of the [c]ity for the second time, stating that the [c]ity was within its rights to take actions that are constitutionally permissible for economic redevelopment and retention of jobs in the [c]ity,” the city’s Law Department said in a statement.
Thomas F. Geselbracht, senior counsel at DLA Piper, represented Eychaner in the case.
He did not respond to a request for comment.
The case is City of Chicago v. Fred J. Eychaner and Unknown Others, 2020 IL App (1st) 191053.