mr william when one mr james carroll mr sean staples from much fellas as well as mr william ryan and miss lauren ryan from ryan and ryan all of which represent those opponents i'm going to start with a twenty minute opening argument after the city has had a chance to have their argument mr ryan from my firm is going to be doing a ten minute rebuttal as this court is aware this is a case of first impression the issue before the court is whether to fons issued by the village advanc our property interests quarreling payment of just compensation when the underlying fees simple title to all the real estate from which the bonds are paid is condemned through the power of eminent domain by the city of chicago in the year ten of the term this is a case a person question for the court because municipalities do not condemn their own redevelopment projects within their own tift districts and it's a rare situation for a municipality to extra territorially condem that the property interest held by the bondholders is a protected property right and not a mere unilateral expectation second the bonds operate to encumber the redevelopment project area through the year twenty fifteen and thus this is not a case involving consequential loss under animal but it is a direct loss of property right requiring payment of just compensation and third the denial of just compensation to the that make up the redevelopment agreement in the bond ordinance which not only created the bonds but together with the bonds form one contract with the village advance until and if we analyze those covenants in the contract it makes clear that the and generated from the entire redevelopment project to the bondholders through the year two thousand and fifteen as this court is aware of tax income and is the increase in the real estate taxes created by the new development over the frozen taxes when the redevelopment plan is approved the contract also required danceable to collect the tax income and pay it to the bondholders additional bunch of them wanted to take all action necessary to ensure that the development would occur  also wanted it would take no action or omit to take any action that would adversely affect the bonds finally this contract is not revokable by benson bill and therefore the combination of all these covenants constitutes protecting property interest because it gives the bondholders an absolute entitlement to one hundred percent of the taxing comment until you're twenty fifteen whatever that tax income may be from year to year ryan white why is it your argument defeated i mean i know there was a property interest but you would agree or not secured by the land itself i agree that they don't have a security interest in the land in the sense but let me know as a second brother question then you can pick up where they were secured only real i don't think it's any different because in our whole info what if the issue in that case was whether the elimination of the right to collect future assessments for the construction and future maintenance of a drainage district required payment  leave the any kind of right to the land itself the assessments were not securitize in any way with the land and i think in that case the court struggled to really find a name for that kind of interest at one point they called in the state at one point they call it an easement at one point a couple called a covenant a deed at one point they call it a covenant running of the land but the gist of it was that they did not find a lien but decided that created a year and a half after the government are you quote of the property in that case the court actually said that ordinance was an already because the government already owned the property at the time the ordinance came into existence are ordinance was created ten years prior to the kind of nation in this case right the time when the interest is created is very important if it's created before the kind of nation then you have a lot you don't you have a secured interest before the property is condemned if something is created after it's subject to the government's ownership the city argues of the plans because of the phrase if any are not protected property rights but are mere unilateral expectations chicago is the bonds are worth nothing because the existence of any tax increment is speculative chicago is wrong this argument aside change the fact that the bonds are your vocal contractual rights which are transferable and they can have the holder of any bond the right to one hundred percent of the tax income and from the redevelopment project until twenty fifteen whatever that value months exist for us to be paid so it's our position that if any whether it's any instrument or not it were the same thing it's just an emphasis that our interest is in the tax increment but what's critical in this this case is that chicago is arguing that we're speculative because we're going to be worth some may not be birth something and i think the bats attempting to prematurely value the bonds and it's not an appropriate analysis to determine whether an interest is protected property because this court would be required to make a finding that the tax increment put on the bonds makes them too speculative to value without the aid of expert testimony such a determination can only be made at the trial court level after exports have testified and are cross examined not to mention the record facts contain only one expert report which is done on behalf of the bondholders that values the bonds of twelve point seven million dollars chicago has knowledge of an impending condemnation project does not prohibit a purchaser of property from receiving just compensation assumption a list is not applying kind of nation cases if an individual knows of the road project is planned and they buy a house in the path of the new road that new owners still entitled to just compensation the fact they knew about the project before they bought it is meaningless so you're nervous and much more than just the accusation i think we have to look in this case to all the the bonds themselves as well as the covenants that make up the bonds which are in the redevelopment agreement in the bond ordinance and i think it's critical that we look at that intent but they read the intent of the statute to show that what the legislature wanted was for those assessments always to be paid because otherwise the projects would fail texican the financing is no different in allen florida the drainage district they said if these projects and assessment if the substance weren't paid for the project the drainage district probably would become valueless well in illinois there's a fine that's required before it took district to set up and that's but for the existence  financing bonds aren't paid for and if you look at the intent of buying three months i think it's clear that all these different contingencies that the city throws out have been covered for example they argue that a charity or a church or religious organization could buy the property but i'm for some direction happened based on the agreements we have to besmirch the side of the exact use for the property that we development plan in the redevelopment agreement both set forth the exact type of development is supposed to be built they have site plans included in the documents aside from that we have these covenants that states the that the won't take any action that's adverse to the bondholders therefore the best deal would breach those covenants if it rezone the also chicago says well produce the owner of the property they may not pay the taxes and then you won't get an increment well that's not true either because the nature of our interest interest gives us statutory tax liens so if for some reason property taxes aren't paid these tax liens operate versus first national bank of waukegan to argue that this is a case involving consequential loss in lake county the court held that a school district like an individual taxpayer did not have standing because the school districts interest in future real estate taxes was too remote to the real estate condemned however in our hold the court also explains that cases involving general real estate taxes are controlling of the issue the our court stated that general taxes are public burdens imposed to liquidate the general obligations of the state county municipality on the other hand special assessments in the tax income in here are intended to pay for improvements that specifically benefit particular individuals and property in a designated area the outer court specifically stated that future general taxes to the various taxing districts to liquidate general obligations are not compensable but the united states had to pay for just happened just compensation for the future districts furthermore the lake county court not draw distinction between taxing comment and special suspense and general real estate taxes because that was an issue in the case thus lake county won't correct on its merits has no application to the instant case because it involved general taxes along another difference between the bondholders in the school district in lake county is that the loss tax revenue could be made up by the school district by reassessing other parcels in schools district on this case chicago's condemn the entire we develop an area so there's no other property available for us to receive in from finally i'm a county the school district had no agreements in place that restricted the use of the property documents means that we're waving just compensation in the event of a condemnation and in your annoying we have the case department of public works and buildings first change national bank which holds that enormous penalty cannot adapt an ordinance that requires in order to give up compensation upon condemnation by either that municipality that issue that ordinance or any other municipality or any other government any that condemns the property so chicago's arguments on constitutional norms under change on the property they would have reached the covenant they would had to pay chicago and on the property in their district they would have had like covenants because they were needed them to ensure developers would come in to redevelop the property and to have marketable bonds so in chicago they'd be paid but in this case chicago's coming in arguing that if it condemns in bands for it doesn't have to pay well that's just an unjust result and they're just reading our covenants to give us absolutely no protection also the united states supreme court has stated that the purpose of the taking is to the bar the government from forcing some people wont to bear the public burns which in all fairness and justice should be borne by the public as a whole this is a prime example of that the only here poor is a benefit just the bondholders it's the public as a whole so the bottom of those shouldn't have to forego just compensation will quote with remote the number of parties willing to redevelop property in tough districts that much less there for the very intent of the touchback to provide tax income and to foster private development in redevelopment areas would be undermined potential developers would try to seek additional security for the misspelling in the form of general obligation bonds so in conclusion the bonds are protect the property the bonds income of the real estate and therefore the bond holders are entitled to just only if the fifth property generated and pence in the received incremental taxes the bonds were special limited obligations of benson and felt that made the bond holders interest interest and payment interest in payment of interest and repayment of principal bondholders had no constitutional right to property and why even if they did chicago did not take it on either ground chicago does not owe the bondholders compensation in general investors as a matter of course assume the risk that they will get lower than expected returns no return at all or even that it was their entire investment the bonds offer the possibility of very generous returns but such for transvestites only come with serious risks  instead under the expressed terms of the bonds themselves and the bond ordinance which is a contract between the bond holders and benson bill the bond holders have a right to payment only out of incremental taxes if any exist the bond holders can't compel predevelopment equalise assessed value the phrase if any which also appears in the bonds themselves is standard language taken from a to act in addition the bond ordinance like the redevelopment agreement makes the income tax is the so security for payment on the bonds chicago's combination of the real property for which it paid imposes no additional uncertainty or risk on the bondholders beyond that already incorporated by the if any language and the so security provision the bondholders accepted the possibility when they purchased the bonds that principal and interest would not be paid the bond holders nevertheless an attempt to trade again was a sure thing but there could be no incremental taxes and thus no bond payments for many reasons beyond the bondholders control the economy could decline the property could be destroyed or the location to become less desirable and there would be no incremental taxes though seem to me to be standard risk that would be  be become non exempt from taxation the risks that you numerated earlier were the typical no increase in value of the different use of the property no incremental taxes here there's going to meddle taxes because it becomes tax that specific risk by itself i would say it is not it is what it is one of many risks that they took in purchasing these bonds the risks of not nonpayment on the bonds and again that could be for any reason have nothing to do with the city of chicago and again that the relevant time to consider this is when the bonds were acquired before the kind of nation because that's when the property interest the excuse me the interest was created the c ontractor interest was created and all of these risks were present at that time the project could fail in there be no incremental taxes or that for any number of reasons in addition there are other factors that could to try to determine the amount of property taxes addition to the market value the level of assessment because asian factor and the tax rate could fall or be kept legislative lee reducing eliminator incremental taxes altogether therefore the risks in which there be no acquittal taxes such as if the owner defaults on property taxes because the tenants didn't pay rent condemnation by another can done nor council mentioned that state federal government railroad or purchased by a private any for texas hemp use house referred to a situation where a charity would purchase a property and use it for taxes and to use but it's equally plausible mr ryan would indicate that that was in permissible under the contract of the covenant with events and you are you disputing that to the extent that the conversion occurred after the acquisition and disputing that if you're saying that it could be converted to tax exempt used by them in a supposedly or by the owner conveying it to the church or someone else and there's no obligation then t in addition to bondholders attorney tempted to characterize the bonds as an incumbrance on the redevelopment property but the bonds conferred no protected interest whatsoever in real property again pursuant to the to facts the sole source of payment was exempt from federal taxes if the bonds were secured by anything other than a committal taxes the bondholders did not obtain interest on the property such as a mortgage rather as the bond ordinance make clear the bond holders had only a rights and federal taxes if any the real property was fully authorized by the o'hare modernization act as well as the only mystical before it if there's some inequity in the situation it could have been addressed legislatively a during the consideration of these of the statutes authorized in chicago trying to acquire property it doesn't matter to others pal if for airport purposes and again that authority existed it certainly was  place taxes from sources other than the redevelopment property itself and there was a choice here i think by benson phil to structure this obligation but the rights if any of the bondholders to payment spring from the contract and that only runs with tencent bill that their remedy if any is against  sizing the bond and the kind of payout that they would get if if the conditions were met chicago in addition to what chicago paid produce the fee simple owner for the real property and maurice does not increase the award of compensation for them from party because it does not increase the value of the property therefore a mortgage would give the for a portion of the award not a claim against the city for compensation beyond a knife four point five million dollars the city paid for the real property the bondholders rely heavily on one florida cases from another jurisdiction that are neither presidential nor persuasive in any event the bondholders are nothing like the drainage districts in a hole in floria their districts their levy to cessna's to cover the costs of drainage works that benefit all land within the range districts here of the payments were made from taxes which the property owner would have had to pay even if they had had there been no bonds the allocation of incremental taxes to a special fund from bond payments does not make such taxes assessments moreover the floria represented a right of all landowners in the drainage district to a constant level of assessment to protect them from higher levies and to ensure that the project remain financially feasible which it's clear from those cases that it is a serious concern cut chicago's kind of nation destroyed no pre determined allocation of payments among property owners there are no property owners left in the two affected revolving area and no owner was obligates repay the bonds in the first place a second independent round in which the bondholders claim fails is that chicago did not take or damage the bond holders interest in bond income or the bonds themselves at most chicago's condemnation frustrated of the real estate frustrated the takings claim clause is we are controlling here do you think or well your honor those cases involves assessments on the land and those and the property there didn't matter the property was taxable the cessna's would have still been owed under oregon law in this case we have obligations funded by general taxes which don't become something else  example by being allocated to a special fun which is expected to generate the taxes mr paul a few minutes ago you mentioned that if this were a mortgage there wouldn't be a separate right for the mortgage holder to be compensated a r the proceeds at first blush it seems and equitable to say that money from this from these bonds would go into the project improve the project and the developer it's the benefit of that are you arguing i think maybe you did argue that this action should be by the bondholders against prolog just because the value emanating from the bonds that were purchased and used in this project were included or the value of that road i think that if there is a claim if they have a claim against anyone it's it is against privileges because you're correct that the proceeds of the bonds were invested in the property to pay for certain if eligible costs acquisition of the property environmental reviews side assessments and those approaches except the compensation agreed final judgment order that covered all of the the value of improvements as well as the dirt the property itself so doing it is in his essence some of the benefit of the process the use of the proceeds from the bonds that were invested in the property before kind of nation that timing was significant among them because only assessments that preceded the government's acquisition could become liens on the property and they misfiled a claim that by precluding the possibility of imposing liens on for recess and the federal government had implied th promised to pay the recesses that is not taking claim which is all our case involves in any event here the bonds were not a leading or a commerce of the real state for reasons having nothing to do with when they were issue dition we also argued there's there's no damaging here there was no physical disturbance of the bonds or any right to in connection with them and this is a nonphysical consequential injury little thing from lawful condemnation of property and finally neither equity nor some policy favors the bondholders despite the references to repeated references as to actual tauriel condemnation there's nothing suspect or even a precedent about chicago acquiring property adjacent to  and to condemn property for airport purposes nor does it help the bondholders bondholders that as they claim they fail to perform their contractual obligations they funded nothing of value to chicago which intense uses for airport purposes and i've not been asked to do so indeed benson build the only party with which they did contract and the intended beneficiary of the great development doesn't even know them compensation because the contract recognised the bondholders would get nothing if there were no incremental taxes chicago's condemnation simply triggered the risk that was out there all along that there would be no taxes and nothing to pay the bondholders with good morning my name is william lyon and chief justice in your honors for me please the court i'd like to address a number of the points that were raised by the city of chicago mr ryan can i can we start with something that i believe was raised by mr all of it the right of action is either against bentonville although i thought that was somewhat disputed in the last statement where they say there is no remedy against bensenville or any answer to cause of action against the village of bensenville bensenville has performed under our agreement they gave us all the tax increment that was generated before the city condemned we have no action against benson go we also have no action against pro low just the intervening bond owners and the reason is this the city of chicago and we agreed in the judgment order that the bonds owned by the intervening bond owners are not part of the ninety four point five million that's a specific agreement in the judgment order now the bonds that pro loaches owns and the bonds the deeper meaning zones there's a total twelve bottles prologue this is two point eight the remaining b are four point two million they're identical bonds there is no difference in one single word between those bonds so when the city agreed that the four point two in the room owned by the eleven interveners is not in the ninety four point five million it's also clear the pro lotus is behind isn't in the ninety four point five million that's for the real estate and the appraisers we had our own appraiser they had their appraiser which we site no brief they appraised the propert subject to the right or the obligation to pay future texas like every appraiser does but in our instance we have a plus because for ten years after the condemnation from six to sixteen we get bonds that is in addition to the land value subject to taxes so in our home in florida the court said we're going to have to determine where the trial court's going to have to determine the value of this interest of the future assessments and that will be added to the land so it's crystal clear we don't have a court that interveners don't have a cause of action against polo just because it's not in the ninety four point five million city agreed the second thing i'd like to address is we haven't talked this morning about the facts and the city keeps our going look there isn't going to be any increment you don't have any right to anything who knows if there's going to be anything there we're reading more of the facts this district was created hundred six by two thousand and six when they condemned the property we have built five buildings the total six hundred thirteen thousand square feet which accommodates over ten football fields of new industrial buildings right at the cargo entrance door here airport we also had a cheve as of two thousand and six two point three room down was an increment that had been paid to us so there's no question about it are we ever going to get increment we were getting increment we were getting about seven hundred thousand dollars a year per our reports that some no record and when the city came along and condemned it that stopped o this fashion we'd have to go back to the trial court and value our bonds we have a report in the record that values our bonds to twelve million i'm sure the city would dispute that but it's a valuation issue to look at what's there in two thousand and six six buildings how much increment of a generating in the past that was about seven hundred thousand here for three plus years and what's the next ten years going to be and there's another factor it's key that we haven't mentioned today and that's this and it's in our reply brief the frozen base was three point nine million of assessed value that's when they created the district after we built we were far in excess of that hence we're getting the tax increment and half of the property really sixty percent of the buildings are in cook county we had a six b tax assessment that was issued there so i'm good all six they are says value was sixteen percent of market value it was going to go up to twenty three percent thirty percent then thirty six percent in the future so we were guaranteed that as time went on our assessed value was going to go up on the same buildings and we were going to get more tax increment but all of that really goes to value which we're suggesting should be done at the trial court level where there's expert testimony in both sides are and allowed to put on all the relevant evidence but it's important to understand that in this case and this isn't make believe and i disagree with ruutu ninety six is when we look at this interest i think we look at it in two thousand and six when the city filed the petition to come down that's when you determine what interests are taken that's when you determine what the properties value in our view there's a number of other issues and let me address some of those the city wants to take the position that eminent domain is a risk that we took i think there was a question about that and now they seem to be saying well that may have been a risk well clearly it wasn't a risk we don't eat we're not responsible for assuming there's going to be a future condemnation and then because of our moving which i'm using the right to just compensation if was in existence reason is this department of public works was exchange bank in that case that my firm handle the owner of the property went to the village of addison and they said we'll resume your property to business but when around fifty three comes through your property will you agree well i think the the chilling effect that we're talking about is the validity of the whole tift program the there's a thousand tift districts in illinois one hundred forty in the city of chicago and it's a tool that's used throughout been a subpoena these if people that purchased if bonds understand from a case or a decision like this that if you own the tiff bonds and they're not secured by the real estate they're secured only by a contract with the municipality for taxing commit and you're not going to be compensated when those defines ar condemned or taken or destroyed we think that'll affect what purchases were paid for to finance in effect the whole  well i think that the animal in florida courts look to the effect that the kind of nation had it would have on the drainage districts and i think similarly it's fair for this court to look at the effect this kind of a decision would have on tax increment districts so that when they analyzed the nine one floria that the whole intent of that drainage district was for people to be paying these assessments in the future well the same is true here the intent is pursuant to our entire agreement that this property would be taxable in the future and that people would pay the tax increment and you get paid on your bonds but the one other point i'd like to make is that i really want to make sure that at least i'm addressing it correctly i don't think risk of condemnation is a valid point for the city to argue if i buy a piece of property the day before it's condemned they must pay me and i don't think if any mean i waved my right to just kind of you know your life if it's ok with the chief justice which you just said it was we bantered about a number of times are going to number of questions or just be interested in your take on molineaux well my take on moment is that the united states supreme court said the ordinance in mall and that was an act that a year and a half after they own the property to create new assessments was in no what any of the our whole court use that analysis in distinguishing i don't know i respectfully think we should do the same in this case our bond was an act of ten years before the city of chicago came on the scene now the year and a half after they own the