Strauss v. City of Chicago
| Decision Date | 05 March 2021 |
| Docket Number | No. 1-19-1977,1-19-1977 |
| Citation | 180 N.E.3d 832,449 Ill.Dec. 907,2021 IL App (1st) 191977 |
| Parties | Brian J. STRAUSS, Individually and d/b/a 1572 North Milwaukee Avenue Building Corporation, an Illinois Corporation, Plaintiff-Appellant, v. The CITY OF CHICAGO, a Municipal Corporation, Defendant-Appellee. |
| Court | United States Appellate Court of Illinois |
Robert Robertson and Marko Duric, of Robertson Duric, and James Patrick McKay Jr., of Law Offices of James P. McKay Jr., both of Chicago, for appellant.
Mark A. Flessner, Corporation Counsel, of Chicago (Benna Ruth Solomon, Myriam Zreczny Kasper, and Suzanne M. Loose, Assistant Corporation Counsel, of counsel), for appellee.
¶ 1 Plaintiff, Brian J. Strauss, individually and d/b/a 1572 North Milwaukee Avenue Building Corporation, owned and operated a building located at 1572 North Milwaukee Avenue in Chicago in which Double Door Liquors (Double Door), a music venue, had been a tenant. After Double Door was evicted, a zoning ordinance was enacted that changed the kinds of establishments that were allowed in the building. In his second amended complaint, plaintiff raised claims that challenged the ordinance and certain acts done by the local alderman and defendant, the City of Chicago, before the ordinance was enacted. The circuit court dismissed those claims under section 2-619.1 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-619.1 (West 2016) ). On appeal, plaintiff contends that (1) the complaint sufficiently stated claims that the zoning ordinance violated substantive due process and equal protection under the Illinois Constitution, (2) the complaint sufficiently stated a claim for inverse condemnation, and (3) his tort claims are not barred by the Local Governmental and Governmental Employees Tort Immunity Act (Tort Immunity Act) ( 745 ILCS 10/1-101 et seq. (West 2016)).
¶ 4 Plaintiff alleges that the alderman for the ward where the building was located, Proco Joe Moreno, engaged in a course of conduct designed to punish plaintiff for evicting Double Door. In July 2017, plaintiff filed a federal civil rights complaint in the United States District Court for the Northern District of Illinois. The federal district court later dismissed the case, and plaintiff's state law claims were remanded to the circuit court of Cook County.
¶ 5 On February 9, 2019, plaintiff filed his second amended complaint, which states in part as follows. When the complaint was filed, the Strauss family had owned the 1572 North Milwaukee Avenue building for almost 40 years. At one time, the family ownership of the building was incorporated and Brian Strauss became president of the 1572 North Milwaukee Avenue Building Corporation, which owned and operated the building. Located in the Milwaukee-North-Damen corridor, the building has four stories, consists of nearly 20,000 square feet, and has 11 apartments. Before the dispute at issue, the estimated market value of the building was $10 million. The building had long been zoned as B3-2, which allows apartments above the ground floor and street-level commercial property, such as shopping centers, large stores, and retail storefronts. At all relevant times, all other buildings along the corridor were also zoned at B3-2 or greater.
¶ 6 Alderman Moreno was a member of the city's zoning committee, which had 18 aldermen. Alderman Moreno also had a personal and financial relationship with Double Door's owners. In 2012, Alderman Moreno told defendant that only Double Door would be allowed in the building. However, "numerous problems" arose with Double Door, including "constantly high noise levels that were problematic for residential tenants and commercial neighbors," illicit drug use and alcohol abuse by Double Door's customers, and damage done to the property by Double Door and its patrons. Double Door's lease relationship ended due to these problems and other lease violations. Plaintiff initiated a forcible entry and detainer lawsuit against Double Door in 2015.
¶ 7 On April 13, 2016, while the lawsuit against Double Door was pending, Alderman Moreno introduced a downzoning amendment to the zoning committee for just plaintiff's building. The amendment would have changed the building's zoning to B1-1, which prohibited over 30 types of businesses from occupying the building, including general restaurants, medium and large entertainment venues, and hotels or motels. Also, the apartments on the upper floors of the building would not be allowed to take new leases. On June 20, 2016, the zoning committee held the B1-1 proposal in committee, making it available to be called for a vote at any time in the future. At a meeting with Alderman Moreno on July 20, 2016, plaintiff was again told that only Double Door was allowed in the building.
¶ 8 On August 15, 2016, plaintiff won the lawsuit against Double Door, which was evicted in February 2017. Two days later, plaintiff attended a meeting at city hall with the commissioner for the Department of Planning and Development, Alderman Moreno, the chairman of the zoning committee, the zoning administrator, and the owners of Double Door, among others. The commissioner tried to broker a sale of the building to Double Door, as well as negotiate a new month-to-month lease. Alderman Moreno also warned plaintiff that if Double Door was not allowed back in the building, the alderman would make the zoning process very lengthy and expensive and that the building could be vacant for two to five years. Alderman Moreno asserted that he decides what kind of tenant goes into the building and all of these issues could be avoided if Double Door was allowed back into the building at a rent far less than what the market would bear. Alderman Moreno also confronted plaintiff inside the building and later on the front sidewalk on February 25, 2017. Alderman Moreno told plaintiff that he would not have a tenant for three years, there would be inspectors in the building on a daily basis, and plaintiff "can come back to [Alderman Moreno] on [plaintiff's] knees." Alderman Moreno threatened that the building would be empty with no income for plaintiff or his family.
¶ 9 The commercial space in plaintiff's building ordinarily garnered rents of $35,000 per month, "conservatively speaking." However, plaintiff's building had been vacant since Double Door was evicted in February 2017. Plaintiff received several written letters of intent to rent the space at market rates, but these potential tenants refused to sign leases unless the zoning classification remained at B3-2. Alderman Moreno's downzoning proposal loomed over the property and prevented plaintiff from leasing the commercial space to potential but reluctant tenants.
¶ 10 Plaintiff tried to sell the building. Around May 10, 2017, plaintiff entered into a written contract with an entity known as Buyer A for $9.6 million. On June 8, 2017, Buyer A cancelled the contract after learning about the pending downzoning amendment from Alderman Moreno.
¶ 11 Two days before Buyer A cancelled its contract, Alderman Moreno had proposed a second amendment that would zone the building to RS-3, which is intended to accommodate the development of single-unit detached houses on individual lots. Plaintiff's building had never been used as a single unit and shared a common wall with another building that was also a commercial/business establishment with upper-level apartments. On June 22, 2017, the zoning committee deferred the RS-3 zoning proposal, making it available to be called for a vote at any time in the future.
¶ 12 Around July 21, 2017, plaintiff entered into a written contract to sell the building to an entity known as Buyer B for $9.1 million. Buyer B knew of the pending downzoning amendments, and the contract was contingent on the property keeping a B3-2 zoning designation. Buyer B met with Alderman Moreno and cancelled the contract on August 7, 2017, due to Alderman Moreno's downzoning scheme looming over the property.
¶ 13 Meanwhile, city officials worked with Alderman Moreno to devise a third downzoning proposal. In August 2017, Alderman Moreno proposed downzoning just plaintiff's building to B2-2, which is intended to spur development in commercial corridors with low demand for retail. B2-2 zoning prohibited over 30 categories of businesses and building uses, and allowed fewer options for the types of commercial or retail tenants that would be permitted to occupy the building. The zoning change would dramatically decrease the value of the building. Prior to a zoning committee meeting on September 11, 2017, a conversation about the B2-2 proposal was recorded between Alderman Moreno and his chief of staff. Alderman Moreno said he was going to "F*** with them, it makes their lawsuit weaker ***."
¶ 14 The complaint appended a transcript of a September 11, 2017, zoning committee hearing where the B2-2 amendment was on the agenda. There, Alderman Moreno stated in part:
Defendant's zoning administrator, Patti Scudiero, stated that the matter was not recommended when it was first introduced. However, Alderman Moreno had since worked with the Department of Law and the Department of Planning and Development to amend the zoning application to a B2-2 designation, which "has a floor area ratio that is identical to the current zoning on the property of a B3-2, which is no loss of floor area." Scudiero's department supported the application.
¶ 15 The zoning committee passed the B2-2 amendment. Ten...
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