A Chicago Landmark Decision

Prepared by Eugene J. M. Leone, Esq. & William H. Schriver, Esq.
June 30, 2009

On May 28th, the Illinois Supreme Court denied the City of Chicago’s petition for leave to appeal a recent appellate ruling that the longstanding Chicago Landmark Ordinance (the “Ordinance”) is unconstitutional. By refusing to hear the appeal, the Supreme Court upheld the decision of the Illinois Appellate Court, First District, that the Ordinance is unconstitutionally vague and constitutes an improper delegation of authority. The appellate case was decided on March 6th. Hanna v. City of Chicago, No. 1-07-3548 (Ill. Ap. Ct.).

Enacted in 1968, the Ordinance protects buildings, sites and districts that meet certain criteria and are recommended by the Commission on Chicago Landmarks (the “Commission”). The Ordinance provides that potential landmarks shall be evaluated by their visual features, distinctive themes, and associations with a critical part of Chicago’s heritage, significant historical events or persons, or significant architects or architectural styles. Over 250 individual designations and 50 district designations have been conferred under the Ordinance, encompassing approximately 9,000 Chicago properties.

Further appeals of Hanna are possible, but the ultimate invalidation of the Ordinance would have significant implications for real estate development in Chicago. On one hand, developers would have greater flexibility in demolishing and redeveloping Chicago properties and districts that lose the landmark designation. On the other hand, landmark status confers upon designated properties certain tax incentives for rehabilitation, and the loss of these incentives would likely discourage such rehabilitation. Of course, these effects may be avoided or mitigated if the City Council remedies the constitutional deficiencies of the Ordinance so that current landmarks may be redesignated under a valid statute.

Hanna involves plaintiffs owning properties in two designated landmark districts in the Arlington-Deming and East Village neighborhoods of Chicago. The plaintiffs filed a 20-count complaint against the City of Chicago (the “City”) and the Commission alleging the Ordinance was invalid on its face and as applied to plaintiffs’ properties and the districts in which those properties are located. The trial court dismissed 19 of the 20 counts for failure to state a cause of action. Plaintiffs appealed.

First, the Appellate Court addressed plaintiffs’ assertion that the Ordinance is unconstitutionally vague and ambiguous in violation of plaintiffs’ due process rights under the Illinois Constitution. The Appellate Court found that the Ordinance’s criteria for assigning landmark status contained “vague, ambiguous, and overly broad” terms and that the City had failed to show how the criteria guided evaluation of “whether a building or district will be deemed to have value or importance.” Moreover, the Appellate Court found that the qualifications specified in the Ordinance for selecting Commission members were “equally vague.” As a result, the Appellate Court held that plaintiffs’ vagueness claim stated a cause of action and should not have been dismissed by the trial court.

Second, the Appellate Court addressed plaintiffs’ assertion that the Ordinance is an improper delegation of legislative authority to an administrative body without intelligible standards for its exercise. The Appellate Court found that the City Council had granted the Commission discretionary authority to act because the Commission’s recommendations become law after one year without any requirement that the City Council review or vote to confirm the recommendations. Consistent with its prior analysis, the Appellate Court also found that the Ordinance’s criteria for landmark status did not provide the Commission with intelligible standards. As a result, the Appellate Court held that plaintiffs’ claim relating to improper delegation of authority stated a cause of action and should not have been dismissed by the trial court.

The Appellate Court remanded the case to the trial court to determine whether the Ordinance is invalid on its face. By declining to review the appellate decision, the Supreme Court left this determination in the hands of the trial court. However, in light of the prior appellate decision, the trial court should follow the lead of the Appellate Court and find the Ordinance invalid.

If you have any questions concerning this Legal Update, please feel free to contact any member of our Real Estate Group in Chicago at:

Pircher, Nichols & Meeks
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Suite 1050
Chicago, Illinois 60611
(Tel.) 312.915.3112

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