Opinion ID: 2121906
Heading Depth: 1
Heading Rank: 3

Heading: discussion of issues properly presented

Text: Two issues remain for our consideration. The first is whether Highland Park had authority to enter into the recapture agreement. If Highland Park did have such authority, we must consider whether the recapture agreement entered into here is valid and enforceable. Highland Park's home rule powers provide authority to impose recapture fees. As a home rule unit, Highland Park has power to take an action so long as that action pertains to its government and affairs. (Ill. Const.1970, art. VII, § 6(a).) Through imposition of a recapture fee, a municipality is apportioning the cost of local improvements among those of its constituents who will use the improvements. This function is local in nature, and therefore, it pertains to the home rule unit's government and affairs. (See People ex rel. Bernardi v. City of Highland Park (1988), 121 Ill.2d 1, 12-13, 117 Ill.Dec. 155, 520 N.E.2d 316.) The courts of this State have consistently upheld recapture agreements in home rule municipalities. See, e.g., SBL Associates v. Village of Elk Grove (1993), 247 Ill.App.3d 25, 186 Ill.Dec. 939, 617 N.E.2d 178; Woodfield Lanes, Inc. v. Village of Schaumburg (1988), 168 Ill. App.3d 763, 119 Ill.Dec. 568, 523 N.E.2d 36. Although Highland Park has authority as a home rule unit to impose recapture fees, Beneficial claims that the recapture agreement entered into between Highland Park and Shaf is invalid. Highland Park has an ordinance governing recapture, and Beneficial asserts that Highland Park may effect recapture only through the recapture ordinance. Because the recapture agreement here was not created pursuant to the recapture ordinance, Beneficial claims that the recapture agreement is invalid. A municipality is without power to violate its own ordinances. ( Palella v. Leyden Family Service & Mental Health Center (1980), 79 Ill.2d 493, 38 Ill.Dec. 804, 404 N.E.2d 228.) The appellate court, however, found that the recapture agreement did not violate the recapture ordinance. The court reasoned that the ordinance did not apply to situations where Highland Park required improvements in connection with the development of a new subdivision. Beneficial claims that the recapture agreement entered into between Highland Park and Shaf violates the recapture ordinance. John Zimmerman, corporate counsel for Highland Park, testified that when a landowner wishes to construct a water or sewer line to benefit an individual piece of property, recapture is accomplished through the recapture ordinance. When, however, a developer wishes to create a subdivision, the city requires various improvements prior to approval of the subdivision. In this instance, the city executes a recapture agreement with the developer rather than utilizing the recapture ordinance. Highland Park need not enact an ordinance to execute its home rule power (see Sommer v. Village of Glenview (1980), 79 Ill.2d 383, 392-93, 38 Ill.Dec. 170, 403 N.E.2d 258), and the recapture ordinance does not state that it provides the sole means for recapture in Highland Park. The recapture ordinance merely provides one method of recapture. The recapture ordinance did not address all types of improvements for which there could be recapture, and therefore, it was more practical to enter into a recapture agreement. This course of action did not conflict with the provisions of the recapture ordinance. We believe, therefore, that Highland Park did not violate its recapture ordinance by entering into a recapture agreement with Shaf. We must next consider whether the terms of the recapture agreement entered into here are valid. Shaf made substantial on-site improvements to Tara Subdivision that will not be used by the owners of the Hoist property. The recapture agreement, however, includes the costs involved in making these improvements in the recapture fee. Beneficial claims that allowing the recapture of expenses incurred in making improvements that will not be used by adjoining property owners serves a private, rather than a public, purpose. Beneficial asserts, therefore, that allowing recapture of these types of expenses violates public policy. (See Crain Enterprises, Inc. v. City of Mound City (1989), 189 Ill.App.3d 130, 136 Ill.Dec. 554, 544 N.E.2d 1329.) The courts of this State generally will not enforce contracts that violate public policy. George v. City of Danville (1943), 383 Ill. 454, 457, 50 N.E.2d 467; Marvin N. Benn & Associates, Ltd. v. Nelsen Steel & Wire, Inc. (1982), 107 Ill. App.3d 442, 449, 63 Ill.Dec. 251, 437 N.E.2d 900. A recapture agreement binds a third party to a contract to which he did not consent and for which he was unable to bargain. Recapture agreements are nevertheless enforced because they allow developers to recoup a portion of the expenses incurred in making over-sized improvements. Municipalities frequently require that developers construct improvements so that the improvements are able to withstand larger capacities than the developers require. In this manner, municipalities facilitate future development because subsequent developers are able to utilize preexisting improvements. (9 Illinois Real Property Service § 48:49, at 68-70 (1989).) The facilitation of future development serves a public purpose, and any private benefit to the developers is merely ancillary. Allowing recapture of expenses incurred in making improvements that cannot be used by adjoining landowners does not serve the broader public purpose envisioned by recapture agreements. Unlike improvements that can be used by future developers, improvements that cannot be used by future developers do not facilitate future development. The availability of recapture for such improvements merely serves to distribute funds among private parties. Recapture under these circumstances violates public policy. Because the owners of the Hoist property will not use the on-site improvements to Tara Subdivision, it violates public policy to include the costs incurred in making these improvements in a recapture agreement. Accordingly, we will not enforce here that portion of the agreement that allows recapture of expenses incurred in making improvements to Tara Subdivision that cannot be used by the owners of the Hoist property. While there can be no recapture of expenses incurred in making improvements that will not be used by adjoining landowners, we do not believe that the entire recapture agreement here is unenforceable. The recapture agreement provides that recapture payments are to be based on the use of the improvements by the owners of the Hoist property. The recapture agreement was filed with the recorder of deeds of Lake County, and gave notice that there would be a fee for connection to the Tara Subdivision improvements. The recapture agreement is enforceable to the extent that it provides for recovery of the Hoist property owners' pro rata share of the costs involved in making the improvements that would be used by them. Section 9-5-1 of the Municipal Code (65 ILCS 5/9-5-1 (West 1992)) sets forth the requirements for recapture in non-home-rule units. While Highland Park, as a home rule unit, is exempted from application of section 9-5-1 (65 ILCS 5/9-5-3 (West 1992)), we note that our findings are not inconsistent with that statute. Section 9-5-1 provides that a subdivision developer may only recapture expenses incurred in constructing improvements that can be used for the benefit of property not in the subdivision. 65 ILCS 5/9-5-1 (West 1992). Defendants claim that it is not feasible to ascertain the individual cost of those improvements that will used by the Holst property owners. This argument is without merit. There was undisputed testimony that the Holst property owners would only use those improvements made on and along Tennyson Lane. Shaf's engineer, Charles W. Greengard Associates, Inc., provided Shaf with an estimate of probable construction costs for the improvements to be made in Tara Subdivision. This estimate was used in calculating the proposed recapture fees contained in the recapture agreement. The estimate was broken down into on-site and off-site improvements, and the off-site improvements consisted primarily of the improvements on and along Tennyson Lane. Furthermore, the estimate shows that the engineers were able to fix a price for each individual improvement. We remand this cause to the trial court to determine what improvements could be used by the Holst property owners. The recapture agreement is enforceable to the extent of the costs incurred in making such improvements. For the reasons stated, the judgments of the appellate and circuit courts are affirmed in part and reversed in part, and the cause is remanded to the circuit court. Appellate court affirmed in part and reversed in part; circuit court affirmed in part and reversed in part; cause remanded.