Malec v. the City of Belleville
| Decision Date | 07 February 2011 |
| Docket Number | No. 5–09–0533.,5–09–0533. |
| Citation | 943 N.E.2d 243,407 Ill.App.3d 610,347 Ill.Dec. 953 |
| Parties | Stephen T. MALEC, Plaintiff–Appellant,v.The CITY OF BELLEVILLE, Illinois, an Illinois Municipal Corporation, THF Green Mount Development, LLC, a Missouri Limited Liability Company, and GMCR, LLC, a Missouri Limited Liability Company, Defendants–Appellees. |
| Court | United States Appellate Court of Illinois |
OPINION TEXT STARTS HERE
John M. Myers, Nick San Diego, Rabin, Myers & Hanken, P.C., Springfield, Penni S. Livingston, Livingston Law Firm, Fairview Heights, for Appellant.Robert J. Sprague, Sprague and Urban, Belleville, for City of Belleville.Bradley A. Winters, Sonnenschein, Nath & Rosenthal, LLP, St. Louis, for GMCR, LLC, and THF Green Mount Development, LLC.
[347 Ill.Dec. 956 , 407 Ill.App.3d 610] OPINION
The plaintiff, Stephen Malec, filed an action seeking declaratory and injunctive relief against the defendants, THF Green Mount Development, LLC, and GMCR, LLC (the Developers), and the City of Belleville, Illinois (the City), in the St. Clair County circuit court. The suit challenged (1) the formation of a tax-increment-financing district (TIF District) pursuant to the Tax Increment Allocation Redevelopment Act—division 74.4 of the Illinois Municipal Code (TIF Act) (65 ILCS 5/11–74.4–1 et seq. (West 2006)), (2) the formation of the Carlyle/Green Mount Business District (Business District) pursuant to division 74.3 of the Illinois Municipal Code (Business District Division) (65 ILCS 5/11–74.3–1 et seq. (West 2006)), and (3) the use of municipal sales taxes generated by the development project to reimburse the Developers for regional infrastructure improvements made pursuant to an economic incentive agreement under section 8–11–20 of the Illinois Municipal Code (65 ILCS 5/8–11–20 (West 2006)). After a bench trial, the circuit court entered a judgment for the defendants on all the counts. We affirm the circuit court's order.
In 2003, the Developers began evaluating the corner of Green Mount Road and Carlyle Avenue in Belleville for a new shopping center. The TIF project area measured approximately 150 acres in size and contained three parcels: two undeveloped parcels totaling approximately 130 acres and one parcel with rundown structures. The latter parcel included approximately 18 acres and contained five structures—one mobile home and four farm buildings, which were grouped together on 2.5 acres of the parcel. The Developers purchased the property for approximately $50,000 per acre for a total of $7.5 million. In 2004, the Developers negotiated with Centex Corp., and Centex Corp. purchased the northern portion of the property totaling approximately 83 acres for residential units, leaving the Developers approximately 64 acres of the project area for private commercial and retail development.
[347 Ill.Dec. 957 , 943 N.E.2d 247]
The TIF project area's three parcels had corresponding tax identification numbers of 09–19.0–100–005, 09–19.0–100–009, and 09–19.0–100–010 (parcels 005, 009, and 010, respectively). Two deeds from 1937 show that 009 and 010 were owned by Charles Edward Biebel in 1937. In 1958, Charles and Hilda Biebel deeded parcels 005, 009, and 010, along with another tract of land south of Carlyle Avenue, to themselves as joint tenants. On December 27, 1961, Charles Biebel, by then a widower, conveyed an eastern half of the area south of Carlyle Avenue totaling approximately 75 acres (the east one-half of the southwestern quarter of section 19) to his daughter and granddaughter, Jean Biebel Moore and Carolyn Moore. In February 1968, Charles Biebel, with Jean Biebel Moore and Edward Moore as the guardians of Carolyn Moore, conveyed the southwest quarter of section 19, the area south of Carlyle Avenue (approximately 149 acres), to Chicago Title and Trust Company. In December 1969, Charles Biebel conveyed the west 20 acres of the southwest quarter of the northwest quarter of section 19 (parcel 005), a western portion of the land north of Carlyle Avenue, along with the set of farm buildings more than 60 years old, to Jean Biebel Moore. On January 5, 1973, Charles Biebel conveyed an eastern portion of the land (a part of the southwest fractional quarter of section 18 and a part of the northwest quarter of section 19, which amounted to more than five acres) located north of Carlyle Avenue (parcel 010) to Jean Biebel Moore.
Parcels 009 and 010 kept the same tax identification numbers from 1937 until the time they were conveyed by the Moore family to the Developers in 2005. At the time of the conveyance, they and parcel 005 were under the ownership of Carolyn Moore Miller and Ernest Miller. Harold Amann, and his father before him, farmed these parcels for 50 years as a single farm, approximately 143 acres of land, pursuant to an oral lease with the Moore family. Amann farmed the land profitably until the Developers, having purchased the property, terminated his lease in October 2005.
Throughout 2004 and 2005, the Developers negotiated with Lowe's and Walmart as potential tenants of the project area. Both Lowe's and Walmart indicated a concern regarding the satisfactory remediation of an underground mine located under a portion of the property. On June 4, 2004, the Developers obtained a preliminary site geologic evaluation of the property from its geologic consultant, Midwest Testing. In its June 4, 2004, letter explaining its preliminary analysis, Midwest Testing noted that the commercial site was roughly a 56–acre rectangular-shaped parcel and that the proposed development included a strip shopping center composed of Lowe's and Walmart anchors. The preliminary site geologic evaluation, addressed to the Developers' principal officer, Alan Bornstein (an equity holder in THF Green Mount Development, LLC), relayed that, according to maps from the Illinois Geological Survey, the site was probably underlain by an abandoned coal mine (mined by the Little Oak Coal Company) at a depth of 120 to 150 feet.
Midwest Testing noted that “[t]he risk of collapse, or subsidence, of the mined voids beneath [the] site [was] the principal concern of constructing over mined areas,” that “[t]here is a similar risk of portions located immediately beyond the mapped undermined area that, although located on intact coal, would be influenced by subsidence of adjacent undermined areas,” and that one occurrence of surface-reflected
[347 Ill.Dec. 958 , 943 N.E.2d 248]
subsidence near the subject property had been reported. In the evaluation letter, Midwest Testing also stated the following:
“[T]o the best of our knowledge, the development in the surrounding area over the past 15 years or so has been accomplished without mine remediation. Obviously, many owners have assumed the risk of subsidence or concluded that the cost of remediation versus the risk is too high to warrant remedial action. Additionally, subsidence events in the region have been isolated and, when they have occurred, they have affected a very tiny percentage of the structures and infrastructure overlying abandoned mines. Known exceptions are the St. Clair Square, possibly, the Home Depot on Lincoln Trail, and more recently, the American TV & Appliance Store on Green Mount Road in O'Fallon, approximately one mile north of the subject site.
Options regarding the apparent undermining include: 1) proceeding without further exploration, 2) undertaking a more detailed search of available maps and data through various state and local agencies, and 3) conducting a mine subsidence evaluation. We have discussed these options with you and we understand you have elected to include grouting costs in your budget at this time for site development.” 1
According to the trial testimony of Michael Malloy, the previous director of economic planning and development for the City, the City did not receive a copy of the June 4, 2004, letter from Midwest Testing. On June 6, 2005, the city council approved an initial TIF eligibility study prepared by Eugene Norber, who was the City's TIF consultant and president of Economic Development Resources (EDR). The eligibility study characterized Midwest Testing's June 4, 2004, letter, stating as follows:
At the trial, Norber admitted failing to inform the city council about the contents of the June 4, 2004, letter and, specifically, the statements therein about mine remediation being uncommon in the surrounding area. Norber admitted that he did not independently study whether mine remediation was required for development in the area and that he relied upon the Developers' representation that to develop the project, there would have to be mine remediation.
On July 1, 2005, Norber/EDR submitted for the City's consideration a TIF “Redevelopment Plan” that contained, verbatim, the same characterization of the June 4, 2004, letter from Midwest Testing as had been set forth in the eligibility study.
In a mine subsidence study submitted by Midwest Testing, dated July 29, 2005,
[347 Ill.Dec. 959 , 943 N.E.2d 249]
Midwest Testing noted that the conditions of the Herrin No. 6 coal seam, and the associated Little Oak Mine, which underlay the proposed area,...
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