Grais v. City of Chicago

• Decision Date: 01 October 1992
• Docket Number: No. 72842,72842
• Citation: 176 Ill.Dec. 47,151 Ill.2d 197,601 N.E.2d 745
• Parties: , 176 Ill.Dec. 47 Ronald B. GRAIS, Appellant, v. The CITY OF CHICAGO et al., Appellees.
• Court: Illinois Supreme Court

Page 745

601 N.E.2d 745

151 Ill.2d 197, 176 Ill.Dec. 47

Ronald B. GRAIS, Appellant, v. The CITY OF CHICAGO et al., Appellees.

No. 72842.

Supreme Court of Illinois.

Oct. 1, 1992.

Kevin M. O'Keefe, O'Keefe, Ashenden, Lyons & Ward, Chicago, for Ronald B. Grais.

Kelly R. Welsh, Chicago Corp. Counsel, Lawrence Rosenthal, Deputy Corp. Counsel, Chicago, for City of Chicago.

Chief Justice MILLER delivered the opinion of the court:

Plaintiff, Ronald B. Grais, owner of several parcels of commercial real estate in the central area of Chicago, filed an action in the circuit court of Cook County challenging the constitutionality of several Chicago city ordinances. These ordinances create a special service area in central Chicago and levy taxes on commercial property in that area to fund the design and construction of the "Central Area Circulator," a new public transportation system for central Chicago. The parties stipulated to the facts and filed cross-motions for summary judgment. The trial judge denied Grais' motion and granted the city's motion, declaring the ordinances to be constitutional. Grais appealed directly to this court pursuant to Supreme Court Rule 302(b) (134 Ill.2d R. 302(b)).

Facts

The circulator project began with a study by the city's department of public works in 1986. The department recommended determining whether a light rail or trolley system would be feasible for the central area. In 1987, the Regional Transportation Authority sponsored a similar study by the Metropolitan Planning Council. In December 1989, the Metropolitan Planning Council issued a final report recommending a light rail transit system.

The Metropolitan Planning Council report noted that about 850,000 people enter the central area every weekday and that the need for improved transportation was the result of substantial growth in the central area. Specifically, the report noted: office space in the central area has doubled in the past 20 years; 18,000 housing units have been added since 1980; there has been a significant increase in retail activity; and there have been more than 4,000 new hotel rooms added recently. The report also predicted that the central area's growth was likely to continue with a similar increase in office space and almost 40% more downtown jobs by the year 2010. The report estimated that about 72,000 people would use the circulator system each day. Of these, 23,000 would be transferring to or from CTA service, 17,000 would be transferring from Metra commuter train service, 28,000 would be midday travellers (mostly downtown workers travelling to lunch or shopping), and 4,000 would be central area residents commuting to work within the downtown area.

In January 1990, the Chicago department of planning issued a "Project Scoping Report" for the circulator project. The report warns that the development of Chicago's central area can continue only if the transportation system is improved. No major expansion of the downtown transit system has been made since the 1950s, while jobs in the central area have continued to increase. The report states that there were more than 630,000 jobs in the central area in 1980, and that there are projected to be more than 870,000 by 2010. The report warns that growing traffic makes the downtown area more expensive and less desirable as a business location, and that the job-growth predictions cannot be met without improving the downtown transit system. The scoping report does not identify specific routes or stops for the proposed circulator system, but does identify priority corridors by which the system will link important parts of the central area, including Union and Northwestern stations, Navy Pier, North Michigan Avenue, and McCormick Place. It also identifies four important land-use to land-use linkages the circulator would be designed to serve: (1) employment to shopping, restaurants, personal services and cultural activities; (2) trips between financial, legal, corporate and government offices; (3) hotel to convention center and visitor activities; (4) central area residential to employment. The report estimates that by 2010, the ratio of workers to residents in these corridors will be 832,000 to 99,500, or about 8 to 1.

The actual transportation system to be used by the Central Area Circulator has not yet been determined, but a light rail or trolley system, a bus system, or a combination of the two are being considered. The cost of the system will be shared equally by the Federal government through the Urban Mass Transportation Administration, the State of Illinois, and the City of Chicago through the special service area tax.

To begin to implement the ideas presented in the various studies, the Chicago city council passed several ordinances. On October 31, 1990, the city passed an ordinance (the Notice Ordinance) that provided for a public hearing before the city council finance committee concerning the establishment of the special service area and provided for mailed and published notice of the hearing. (Notice Ordinance § 2.) Notices were mailed to the owners of 4,929 parcels of real estate subject to the special service area tax and the hearing was held as scheduled on November 26, 1990.

On February 6, 1991, the city council passed the "Establishment Ordinance," establishing the special service area, and the "Governance Ordinance" creating the "Central Circulator Board" to assist the mayor and city council in administering the project. The Establishment Ordinance provides for the levy of an annual tax beginning in 1991 on property within the special service area at a maximum rate of 0.175% of the equalized assessed value of the property. The Establishment Ordinance also authorizes bonds to be issued in an amount up to $300 million, and for a maximum tax rate of 0.25% if such bonds are issued. The city has not yet exercised the authority to issue bonds. Finally, on July 24, 1991 the city enacted the 1991 Levy Ordinance, calling for a $14 million levy for the 1991 tax year.

The Notice and Establishment Ordinances define the special service area as:

"the territory located within the following described perimeter:

Oak Street between Lake Michigan and La Salle Street;

La Salle Street between Oak Street and Ohio Street;

Ohio Street between La Salle Street and Kingsbury Street;

Kingsbury Street between Ohio Street and Grand Avenue;

Grand Avenue between Kingsbury Street and Des Plaines Street;

Des Plaines Street between Grand Avenue and Polk Street;

Polk Street between Des Plaines Street and State Street;

State Street between Polk Street and the Stevenson Expressway (Interstate 55);

The Stevenson Expressway (Interstate 55) between State Street and Lake Park Avenue;

Lake Park Avenue between 25th Street and 26th Street;

26th Street (extended) from Lake Park Avenue to Lake Michigan; and

Lake Michigan between 26th Street (extended) to Oak Street,

but not including any property which is classified from time to time as residential within the Cook County Real Property Classification Ordinance * * *." Notice Ordinance § 1(h); Establishment Ordinance § 4.

Under the Cook County real property assessment ordinance, property in classes 2 (single family dwellings), 3 (multiunit residential property), and 9 (low and moderate income housing) would not be included in the special service area and therefore would not be subject to the tax.

Based on 1988 tax data, the special service area perimeter contained 14,191 parcels, comprising 34.3% of the total tax base of the city. While only 34.7% of the parcels within the perimeter were classified as nonresidential, that property constitutes 91.6% of the equalized assessed value of the area. Had the ordinances not excluded residential property from the special service area, 8.4%, or $1,176,196, of the initial $14 million levy would have been paid by owners of residential property.

In the Establishment Ordinance, the city council made numerous findings upon which it based its decision to exclude residential property from the special service area including the following:

"d) The vast majority of the Area is zoned for commercial uses;

e) The central area of the City has undergone in recent years very substantial development and expansion. Approximately 550,000 persons come to that area to work each day. Within the central area, areas of high growth have emerged and major commercial developments are under way, but these areas are not conveniently connected either to major transportation lines that converge in the core of the central area or other major downtown employment and major activity centers;

f) The total amount of office space in the central area has doubled since 1970;

g) As a result of the development and expansion of the central area of the City, the Area is in need of additional public transportation facilities and services. A public transportation system and facilities for the Area, including public transportation vehicles and lines (such as for light rail, bus, or other transportation modes), stations, and related facilities (the 'Central Area Circulator') will provide increased ability of persons to reach workplaces, offices, public buildings, services, and shops in the Area; will facilitate commerce and services in the Area; and will reduce air pollution. The development and operation of the Central Area Circulator for the Area will stimulate economic development, the maintenance and creation of jobs, the creations of additional tax revenues, and the general economic health of the Area;

h) Better transit circulation in the central area will encourage people to make longer trips by unifying the area into a coherent whole, allowing access to jobs that were not convenient to them and encouraging shoppersand diners to venture further within the core of the central area during lunch and in the evening;

i) Business and commercial enterprises choose their location in large part on the basis of...