Opinion ID: 2200607
Heading Depth: 1
Heading Rank: 2

Heading: zoning case

Text: Oakdale was permitted to intervene in the zoning case, and we therefore address the issue of whether the down-zoning from R-8 to R-5 was unconstitutional and void as applied to the property. Pursuant to a comprehensive study conducted in 1961 on behalf of Chicago, it was determined that the properties fronting Lake Shore Drive, between Belmont and Diversey, including the subject property, should be zoned R-8. The properties were so classified, in accordance with a city policy of allowing the highest density zoning adjacent to the lakefront. A number of high rises in the area were constructed to the allowable limit under R-8 zoning. A hospital and convent, also located within the area, were developed in conformity with R-5 zoning. (The convent property was down-zoned from R-8 to R-5 after the subject property was down-zoned.) The properties between Lake Shore Drive and Sheridan Road (which runs immediately west of the subject properties) were zoned between R-5 and R-7. The properties on either side of Sheridan Road are in conformance with R-7 zoning. The Kellogg properties retained their R-8 classification from 1961 until 1979. At that time, as previously noted, an amendatory zoning ordinance was enacted, down-zoning the parcels to R-5. No other property was affected by the ordinance. As a result of the down-zoning, performance under the contract previously referred to did not take place. A number of witnesses testified concerning the propriety of the amendatory zoning ordinance. Rolf Campbell, a witness for Harris, stated that he was a city planning and zoning consultant. He indicated that the predominant use and trend of development in the subject area is multiple-family, high-rise buildings in conformance with R-8 zoning. In his opinion, an R-5 zoning classification would therefore not be consistent with the predominant use in the area. He further testified that the highest and best use of the subject parcels would be construction of a high-rise. He stated that development of the subject property in accordance with R-8 zoning would have no adverse effect on the community or adjacent properties. He further indicated that the fact that other properties in the area were down-zoned to R-5, after the subject property, did not change his opinion that an R-5 classification would be inconsistent with development in the area. In his opinion, rezoning of the property was not undertaken pursuant to a comprehensive zoning amendment. On cross-examination, Campbell stated that it may be proper to have more than one residential classification within a given block. On redirect examination, he testified that there should be only one zoning classification in the area in which the subject properties are located. Terrence O'Brien, a real estate appraiser, broker and consultant, also testified on behalf of Harris. He defined the phrase highest and best use as the use which would yield the greatest net return to a property and its owner. In his opinion, the highest and best use of the subject properties would be to develop them in accordance with an R-8 classification. In his view, such a development would not have an adverse impact on the value of surrounding properties. The witness agreed with Campbell's conclusion that the predominant use of the properties between Belmont and Diversey, on Lake Shore Drive, is multifamily construction similar to an R-8 classification. He further testified that the fair market value of the property under R-8 zoning is $3.2 million. He valued the property at $1.78 million under an R-5 classification, a difference of $1.42 million. Dale Park, Jr., an attorney specializing in estate planning and administration, stated that he was the director of the Helen L. Kellogg foundation. He testified that, in anticipation of the proceeds to be realized from the contract executed in 1978, the foundation pledged funds to the University of Notre Dame and Northwestern University. In reliance on the pledge, Northwestern renamed its management school the John L. Kellogg Graduate School of Management. Notre Dame created a new learning center and hired faculty to staff it. As a result of the down-zoning and consequent inability to perform under the contract, the foundation is unable to meet these binding pledges. Harris called Martin Murphy, commissioner of the Department of Planning, as an adverse witness. He testified that, after a study of the subject area, he recommended to the city council that the property not be down-zoned to R-5. In his testimony before the building and zoning commission of Chicago in June of 1979, he had stated that a rezoning from R-8 to R-5 was out of character with the established zoning. He later withdrew his objection because he understood that a comprehensive rezoning of the area was being considered. However, he still did not recommend passage of the ordinance. Wallace Nelson, a vice-president of the First National Bank, testified that the Kellogg account was assigned to him for supervision in 1971. At that time, Helen Kellogg owned two parcels of the subject property and wished to acquire a third. Pursuant to an appraisal of the parcel, the bank quoted $500,000, the purchase price, as the fair market value of the property. A reason cited for the valuation was the desirable R-8 zoning classification. Further testimony presented by Harris indicated that no attempt was made to sell the property under the R-5 zoning. Lance Morgan, the vice-president of the trust department at Harris, stated no effort was made to sell the property as R-5 because it should be zoned R-8, and was worth more under the latter classification. Two witnesses testified on behalf of the city. Jerome Jacobson, the deputy commissioner of the Department of Planning, stated that two zoning classifications can exist within one block and be compatible. He also stated that zoning changes were being undertaken throughout the area in order to reduce density. The changes were made pursuant to a general plan. Jacobson estimated that 85% to 90% of the land in the area had been down-zoned, excluding those properties already developed to the maximum density permitted under the ordinance. In his opinion, the subject property should be zoned R-5 in light of the development in the surrounding area and the desire to control congestion. On cross-examination, Jacobson admitted that the predominant use of the property in the area was in accordance with R-7 and R-8 zoning. He stated that properties in the immediate area currently zoned R-5 were so classified after the subject property. On re-cross-examination, he defined the highest and best use of property as that which best serves the needs of the community and the City itself. John McNamara, a real estate broker, appraiser and consultant, stated that the property, as zoned R-5, is worth $1.8 million. Under R-8 zoning, it is worth $3.05 million. He therefore agreed that the subject property is more valuable under an R-8 classification, but stated that the highest and best use of the property is in accordance with R-5 zoning. On cross-examination, McNamara defined the highest and best use of property as the use to which the property can be put over a period of time, with the greatest amount of monetary return to the owners. He nevertheless insisted that R-5 zoning represents the highest and best use, contrary to his definition thereof. Oakdale contends that a zoning ordinance is valid as long as there is any rational basis upon which it can be sustained. Here, the ordinance was allegedly enacted to reduce density in the lakefront area. Oakdale further argues that if the validity of the ordinance is fairly debatable, the city council's judgment must control. It is asserted that the ordinance does not constitute impermissible spot zoning because there has been a systematic down-zoning of properties in the subject area since 1975. Harris alleges that the ordinance is arbitrary and capricious because it relates only to the subject property (rendering it in nonconformance with existing uses in the area), and it fails to serve any public purpose. It is further argued that the reclassification violated Harris' vested rights acquired under the original classification. Harris points out that a purchase, a sale and certain charitable donations were undertaken in reliance on the R-8 zoning. As noted by the appellate court, a zoning ordinance is presumed valid, and the burden is upon the party attacking the ordinance to establish its invalidity by clear and convincing evidence. ( Duggan v. County of Cook (1975), 60 Ill.2d 107, 111.) Factors which may be taken into consideration in determining validity of an ordinance are the following: (1) The existing uses and zoning of nearby property [citations], (2) the extent to which property values are diminished by the particular zoning restrictions [citations], (3) the extent to which the destruction of property values of plaintiff promotes the health, safety, morals or general welfare of the public [citations], (4) the relative gain to the public as compared to the hardship imposed upon the individual property owner [citations], [and] (5) the suitability of the subject property for the zoned purposes   . La Salle National Bank v. County of Cook (1957), 12 Ill.2d 40, 46-47. We find that these factors weigh substantially in favor of Harris. As previously noted, most of the property within the immediate subject area, fronting Lake Shore Drive, was zoned R-8 and had been so classified since 1961. The ordinance in question affects only the Kellogg property. Although there was conflicting evidence as to whether the rezoning was pursuant to a comprehensive plan, this fact does not, as Oakdale suggests, require a finding that the reasonableness of the ordinance is debatable. (12 Ill.2d 40, 47.) In addition, the trial court found that the harm to Harris outweighed any benefit to the public. The down-zoning precluded the negotiated land sale, substantially reduced the value of the property, and impedes Harris' fiduciary responsibilities as to its charitable obligations. In terms of the suitability of the property for R-5 zoning, many of the witnesses testified that the highest and best use of the property was development in accordance with R-8 zoning. There was testimony to the effect that construction consistent with an R-8 classification would have no adverse effect upon the community, or the value of the surrounding properties. It has frequently been said that zoning ordinances must bear a substantial relationship to the public health, safety and welfare. ( E.g., La Grange State Bank v. County of Cook (1979), 75 Ill.2d 301, quoting Tomasek v. City of Des Plaines (1976), 64 Ill.2d 172, 179-80.) This is because a property owner has the right to expect that the classification imposed by the original zoning ordinance will not be changed unless such is required for the public good. ( Garner v. City of Carmi (1963), 28 Ill.2d 560, 564; Zilien v. City of Chicago (1953), 415 Ill. 488, 493.) The trial court found an undue invasion of Harris' constitutional rights without a sufficient concomitant benefit to the public. From our review of the record, we are unable to say that this determination was against the manifest weight of the evidence. See La Grange State Bank v. County of Cook (1979), 75 Ill.2d 301, 309; Pioneer Trust & Savings Bank v. County of Cook (1978), 71 Ill.2d 510, 516-17. In so holding, we find inapposite Agins v. City of Tiburon (1980), 447 U.S. 255, 65 L.Ed.2d 106, 100 S.Ct. 2138, and Amdur v. City of Chicago (7th Cir.1980), 638 F.2d 37, cert. denied (1981), 452 U.S. 905, 69 L.Ed.2d 406, 101 S.Ct. 3031, cited by Oakdale. Agins involved the question of whether the mere enactment of a zoning ordinance limiting property development constitutes a taking. In determining that it did not, the court noted that, contrary to the instant case, the ordinance did not prevent the best use of owners' land and, apparently, affected other property. The court in Amdur relied on the Agins opinion in resolving the same issue. It, too, noted that the ordinance did not prevent the best use of the owner's land. Further, unlike the instant case, there was no evidence indicating that the owner took any action in reliance on a preexisting zoning classification.