1350 Lake Shore Associates v. Healey ( 2006 )

Docket No. 102093.
IN THE
SUPREME COURT
OF
THE STATE OF ILLINOIS
1350 LAKE SHORE ASSOCIATES, an Illinois Limited Partnership,
Appellant, v. LORI T. HEALEY, Commissioner, Department of
Planning and Development of the City of Chicago, et al., Appellees
(Edward T. Joyce et al., Intervenors-Appellees).
Opinion filed December 21, 2006.
JUSTICE GARMAN delivered the judgment of the court, with
opinion.
Chief Justice Thomas and Justices Freeman, Fitzgerald, Kilbride,
and Karmeier concurred in the judgment and opinion.
Justice Burke took no part in the decision.
OPINION
Plaintiff, 1350 Lake Shore Associates (LSA), owns property
located at 1320-30 North Lake Shore Drive in Chicago. In 1978, the
Chicago city council approved an amendment to the Chicago zoning
ordinance establishing Residential Planned Development 196 (RPD
196) for the property. When LSA sought to develop the property in
1997 by constructing a 40-story apartment building containing 196
dwelling units, it encountered resistance from a neighborhood group
opposed to the construction of high-rise buildings in the area
surrounding LSA’s property. On December 10, 1997, Charles
Bernardini, then alderman of the 43rd Ward, in which the property is
located, introduced a down-zoning ordinance in the city council to
change the property’s zoning from RPD 196 to R6 General Residence
District. Under the latter zoning classification, LSA’s proposed
building was not a permitted use. The ordinance was approved by the
city council in April 1998 and it became effective the following month.
This case has been in litigation since 1998, when LSA filed a
complaint for mandamus, seeking to require city officials to issue a
zoning certificate and building permit under the RPD 196 zoning
classification. The dispute has spawned three appellate court
decisions. In the instant appeal, the appellate court affirmed the Cook
County circuit court’s conclusion that LSA did not gain a vested right
to build under the former RPD 196 zoning. 363 Ill. App. 3d 806. We
granted LSA’s petition for leave to appeal. 210 Ill. 2d R. 315.
BACKGROUND
In 1996, LSA authorized its agent, Draper & Kramer (Draper), to
look into the possibility of developing the property under the RPD
196 zoning classification. In early 1997, LSA authorized Draper to
proceed with the project. Draper hired Jack Guthman, an attorney
specializing in zoning law, to represent LSA in connection with the
project, and an architectural firm to develop the plans. Draper also
hired a surveyor, an urban planner, an elevator consultant, and an
artist to create a rendering based upon the architect’s plans. In April
or May 1997, Guthman and representatives of Draper met with
Bernardini. They discussed the proposed project and Bernardini was
shown the preliminary building designs. Bernardini requested that the
number of parking spaces be increased and that some changes be
made to the building’s facade. While Bernardini testified that he did
not mention down zoning the property at this meeting, he informed
Guthman and the Draper representatives that the project would be
controversial due to its size and density and that if they wanted his
support, they should meet with neighborhood representatives and
reach an agreement. Pursuant to Bernardini’s suggestion, Draper
instructed the architect to revise the building’s plans to add more
parking spaces and change the design of the building’s facade.
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The timing of the next meeting between Guthman and Bernardini
was the subject of dispute. LSA claimed that it took place on August
1, 1997, while defendants argued that it took place shortly after the
first meeting. Bernardini testified that he and Guthman talked
periodically after the first meeting and that shortly after that meeting,
Bernardini told Guthman that he was receiving complaints from
neighbors about the project, that he had been asked to down zone the
property, and that down zoning was a consideration if LSA and the
neighbors could not reach a compromise.
In October 1997, Draper representatives met with Bernardini and
showed him the revised plans for the building. Bernardini again urged
them to show the plans to community representatives. On October 22,
1997, at a chance meeting with Guthman, Bernardini again urged the
need for compromise. In early November 1997, Draper’s president
met with members of the Near North Preservation Coalition (NNPC),
a neighborhood group opposed to the building project. No agreement
was reached and on November 17, 1997, the group met with
Bernardini and requested that he introduce a down-zoning ordinance.
Upon learning of Bernardini’s plan to introduce the ordinance,
Guthman requested that Bernardini delay introducing the ordinance,
stating that he believed real progress was being made by Draper and
NNPC. Bernardini agreed to wait until the next city council meeting.
When no agreement had been reached by that time, Bernardini
introduced the down-zoning ordinance on December 10, 1997. The
architect submitted a Part II Submittal for the project to the City’s
department of planning and development (Department). Despite
meetings between Draper and NNPC on several occasions thereafter,
no compromise was reached. On April 29, 1998, the city council
approved the down-zoning ordinance. The Department did not issue
a Part II approval letter. Issuance of this approval was a prerequisite
to the issuance of a zoning certificate and building permit.
In August 1998, LSA filed a complaint for mandamus against the
City and the commissioner of the Department to require the
commissioner to issue a Part II approval. Subsequently, certain
individuals who lived within 250 feet of LSA’s property were allowed
to intervene. Following a trial, the circuit court ruled in favor of
defendants and the intervenors, finding that the Part II approval letter
need not be issued because a down-zoning ordinance was pending
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before the city council. On appeal, the appellate court concluded that
the circuit court’s reliance on the pending-ordinance doctrine was
erroneous and it remanded with directions to issue a writ of
mandamus requiring that a Part II approval letter be issued. 1350
Lake Shore Associates v. Hill, 326 Ill. App. 3d 788 (2001).
On remand, the intervenors filed a motion for declaratory
judgment seeking a declaration that LSA was not entitled to a zoning
certificate or a building permit. LSA filed an amended complaint,
seeking to require the City’s zoning administrator to issue a zoning
certificate and asking that the City be enjoined from interfering with
LSA’s rights under RPD 196. Although the circuit court ordered that
a Part II approval letter be issued, it held, based on the evidence
submitted at the earlier trial, that LSA did not have a vested right to
the issuance of a zoning certificate or building permit. The circuit
court found that expenditures incurred by LSA in connection with the
project were not made in good-faith reliance on the RPD 196 zoning
classification, but were made in an effort to reach a compromise. LSA
again appealed.
The appellate court found that LSA’s vested-rights claim required
additional fact-finding and remanded to the circuit court with
directions to make specific findings as to (1) the date on which LSA
knew or should have known that it was probable Bernardini would
introduce a down-zoning ordinance; (2) the total amount of expenses
incurred by LSA in connection with the project as of that date; and (3)
whether those expenses were sufficiently substantial to give LSA a
vested right to the issuance of a zoning certificate and building permit
under the RPD 196 zoning classification. 1350 Lake Shore Associates
v. Mazur-Berg, 339 Ill. App. 3d 618 (2003).
On remand, the circuit court made the following findings: (1) LSA
knew it was probable that Bernardini would introduce a down-zoning
ordinance on any date after the meeting in April or May 1997
involving Guthman, the Draper representatives, and Bernardini; (2) as
of that date, LSA had incurred expenditures in the amount of
$18,900.16 in connection with the project; and (3) the expenses were
insufficiently substantial to give rise to a vested right in LSA to the
issuance of a zoning certificate and a building permit for its project.
LSA once again appealed.
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The appellate court affirmed the circuit court’s judgment, finding
that LSA was not entitled to an order enjoining the City from applying
the existing zoning ordinance, which would prevent LSA from
developing the property under the RPD 196 zoning, and concluding
that the intervenors were entitled to a declaratory judgment that LSA
was not entitled to a zoning certificate or building permit under RPD
196. 363 Ill. App. 3d at 823.
ANALYSIS
I
Mandamus is an extraordinary remedy appropriate to enforce the
performance of official duties by a public officer where no exercise of
discretion is involved. People ex rel. Birkett v. Jorgensen, 216 Ill. 2d
358, 362 (2005), quoting Madden v. Cronson, 114 Ill. 2d 504, 514
(1986). There must be a clear right to the relief requested, a clear duty
in the public officer to act, and a clear authority in the officer to
comply with the writ. Noyola v. Board of Education of City of
Chicago, 179 Ill. 2d 121, 133 (1997). A decision to grant or deny
mandamus will not be reversed on appeal unless it is against the
manifest weight of the evidence. Pioneer Trust & Savings Bank v.
County of Cook, 71 Ill. 2d 510, 516-17 (1978). We review
conclusions of law de novo. See Eychaner v. Gross, 202 Ill. 2d 228,
252 (2002).
II
LSA first argues that the circuit and appellate courts erred in
finding that it did not have a vested right to develop its property in
accordance with the provisions of RPD 196. It argues it earned that
right through its development efforts and substantial expenditures
incurred prior to any official action that could have changed the
zoning classification of the property. The City defendants argue that
the circuit court’s findings were not against the manifest weight of the
evidence; intervenors argue that LSA is not entitled to a vested right
in the RPD 196 zoning classification as a matter of law.
The general rule is that a landowner has no right to the
continuation of an existing zoning classification. Pioneer Trust, 71 Ill.
2d at 517. However, an exception to this rule exists which this court
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first recognized in Fifteen Fifty North State Building Corp. v. City of
Chicago, 15 Ill. 2d 408, 416 (1958). This exception has been
described as follows:
“[W]here there has been a substantial change of position,
expenditures or incurrence of obligations made in good faith
by an innocent party under a building permit or in reliance
upon the probability of its issuance, such party has a vested
property right and he may complete the construction and use
of the premises for the purposes originally authorized,
irrespective of subsequent zoning or a change in zoning
classification.” People ex rel. Skokie Town House Builders,
Inc. v. Village of Morton Grove, 16 Ill. 2d 183, 191 (1959).
The appellate court in the instant case explained that the
determination of whether a vested right exists turns on the resolution
of two questions: (1) which of the expenditures made or obligations
incurred by the property owner were made in good-faith reliance on
the probability that the owner would obtain the necessary clearances
to develop the property; and (2) whether those expenditures or
obligations were substantial. According to the court, central to the
first inquiry is the proposition that, “once a property owner becomes
aware that it is probable that an amendatory zoning ordinance will be
introduced, it can no longer be said to be able to rely in good faith on
the probability that a zoning certificate or a building permit will issue
pursuant to the property’s current zoning.” 363 Ill. App. 3d at 814-15.
The appellate court cited its decision in Mazur-Berg as authority for
this last statement.
In Mazur-Berg, the court acknowledged that there is no bright-
line test for determining whether expenditures have been made in
good-faith reliance on the probability that a zoning certificate or
building permit will issue. Based upon its review of the case law in this
area, the court then fashioned the test it applied in the instant case,
relying principally on three cases to support its determination that
good-faith reliance ends when there is a probability that an
amendatory zoning ordinance will be introduced. In American
National Bank & Trust Co. of Chicago v. City of Chicago, 19 Ill.
App. 3d 30 (1974), the owner applied for a building permit to
construct a high-rise building east of Lake Shore Drive in Chicago.
The city refused to issue the permit. Five days after application for the
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permit, an ordinance was introduced to the city council that would
prohibit any further private development east of Lake Shore Drive.
The city argued that there was widespread publicity concerning the
proposed zoning amendment and that the owner was on notice of a
likelihood of a change in the law; accordingly, the owner did not rely
in good faith on the probability of obtaining a building permit. In
addressing this contention, the appellate court noted:
“As a practical matter, of course, a proposed amendment may
counter the applicant’s argument of reliance on the probability
a permit would issue, such that a change of position, etc., after
knowledge of the proposal would not be included in a test of
substantiality of change, expenditures, etc., which go to
establish the vested right to issuance of a permit.” American
National Bank, 19 Ill. App. 3d at 34.
The court noted that it was the city’s burden to show that the plan
which would change the zoning was known to the owner prior to the
time that substantial expenditures were made and that the city had
made no such showing. The court found no evidence that awareness
of the plan preceded the owner’s expenditures. American National
Bank, 19 Ill. App. 3d at 35-36.
Another case relied on by the appellate court in Mazur-Berg is
People ex rel. Shell Oil Co. v. Town of Cicero, 11 Ill. App. 3d 900
(1973). There, the petitioners told the Cicero town clerk that they
intended to construct a gasoline station on their property. Shortly
thereafter, the clerk informed the petitioners’ agent that the town’s
board of trustees objected to this proposal. That sentiment was
confirmed by the trustees in a subsequent meeting with the agent, but
the town clerk advised the agent to make a formal request for a
building permit. The town trustees denied the application.
Nonetheless, the petitioners proceeded with the demolition of the
existing building on the property. A few months after a mandamus
action was filed by the petitioners, the town amended its zoning
ordinance. The circuit court issued the writ directing respondents to
issue the building permit for the gasoline station. The appellate court
reversed, concluding that the petitioners had not incurred substantial
expenditures in reliance on the probability of receiving a building
permit. With respect to the cost of demolition, the court noted that
this expense was incurred at a time when the probability that a permit
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would issue was doubtful and the likelihood of an amendatory
ordinance seemed quite probable. Shell Oil, 11 Ill. App. 3d at 905.
In Naumovich v. Howarth, 92 Ill. App. 2d 134 (1968), another
case relied on in Mazur-Berg, in anticipation of a request for a
building permit to construct a gasoline station, the City of Springfield
passed a resolution referring the question of reclassification of all
property in an area, including the subject property, to the zoning
board of appeals for public hearing and recommendation. The
resolution also directed that no building permit other than for
residential construction should be issued. A week later, plaintiffs
submitted their application for a building permit for the gasoline
station. The request was refused due to the resolution. Shortly
thereafter, the city passed an amendatory ordinance changing the
zoning classification of the subject property. The appellate court noted
the factors to be considered in deciding whether one has a vested right
in the existing zoning of a property: (1) a substantial change of
position before an orderly change in the law; (2) a notice of likelihood
of change in the law prior to a change in the property owner’s
position; (3) the regularity of the proceeding of the municipality in
making the change; and (4) the promptness with which the
municipality takes action. The court found no substantial change in
position prior to the passage of the ordinance that changed the zoning
of the property. Naumovich, 92 Ill. App. 2d at 139-40.
From these cases, the Mazur-Berg court concluded that once a
property owner becomes aware of the probability that an amendatory
zoning ordinance will be “introduced,” the owner can no longer rely
in good faith on the probability that a zoning certificate or building
permit will issue under the property’s then-existing zoning. Mazur-
Berg, 339 Ill. App. 3d at 634.
The Shell Oil and Naumovich cases cited by Mazur-Berg and, by
extension, the appellate court in the instant appeal do not support the
proposition that it is the probability of introduction of an amendatory
zoning ordinance that is the cut off point for good-faith reliance. In
Shell Oil, the town trustees, who were responsible for approving
building permits and enacting zoning changes, told the petitioners that
they did not want a gasoline station to be constructed on the property.
Thus, petitioners were on notice from the very officials responsible for
granting or denying applications for building permits that it was
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unlikely they would receive a building permit to construct the gasoline
station. Only after the mandamus action was filed did the town amend
its zoning ordinance, and there is no discussion in the opinion as to
any events that may have preceded that amendment. In Naumovich,
the city council passed a resolution on the question of zoning
reclassification of property, including the parcel of property at issue,
recommending that the property be reclassified as residential. Only
after this official action had been taken did the property owner submit
an application for a building permit to construct a gasoline station.
The City asserts in its brief that no court has ever suggested that
the requisite knowledge of the zoning change must come from a
public hearing or the actual introduction of a zoning amendment.
However, neither the City nor the intervenors have cited any cases
that could be construed as holding that good-faith reliance ends when
one city council member raises the possibility of introducing a down-
zoning ordinance if the property owner does not reach agreement with
neighborhood organizations. It is the position of the City and the
intervenors that the first time Bernardini mentioned down zoning,
LSA could no longer rely in good faith on the probability that it would
be granted a building permit under the RPD 196 zoning classification.
The trial court found that Bernardini first raised this possibility shortly
after his initial meeting with representatives of LSA in April or May
1997. The parties continued to meet during the next several months.
LSA submitted revised building plans, at Bernardini’s request, adding
parking spaces, changing the facade of the building, and reducing the
density of the building, all in an effort to reach a compromise with
concerned neighbors. Although Bernardini may have mentioned down
zoning shortly after his initial meeting with LSA representatives, he
continued to urge LSA to reach a compromise with neighbors. The
appellate court concluded that it was at the meeting shortly after the
spring 1997 meeting that LSA knew or should have known that,
“regardless of the success of any attempts at reaching a compromise
with community members, it could no longer rely in good faith on the
probability that it would be issued a zoning certificate and building
permit in accordance with RPD 196.” 363 Ill. App. 3d at 817. The
circuit court came to an identical conclusion, reasoning that once
Bernardini told Guthman that down zoning was a consideration unless
a compromise with neighbors was reached, LSA could not rely on the
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probability that it would receive its building permit. Accordingly, any
expenditures made without securing an agreement could not be
construed as being made in good faith. The circuit court was
concerned that any other interpretation would allow a developer to
manipulate the date of compromise or impasse and thus render the
concept of good faith meaningless.
The conclusion reached by the circuit and appellate courts,
however, could lead to manipulation by objecting neighbors and may
discourage property owners from seeking to develop their property.
Neighbors who object to proposed construction may pressure their
political representative to make early threats to down zone unless the
owner compromises. The neighbors may then later refuse to
compromise and request their representative to introduce a down-
zoning ordinance, confident in the knowledge that the owner could
have gained no vested right to build under the property’s former
zoning. A standard that may be subject to manipulation by either party
is unworkable. Further, the conclusions reached by the circuit and
appellate courts here assume that the only type of building LSA could
construct under the RPD 196 zoning classification is the one originally
conceived. As LSA points out, however, that classification merely set
requirements for maximum floor area ratio and land coverage,
established setback and yard requirements, established the minimum
number of parking spaces, and limited the overall number of units.
Thus, it may have been possible to compromise on a different type of
structure, had the parties been willing.
The City argues that no case exists in which good-faith reliance
was found despite the plaintiff’s knowledge that a zoning change was
pending and it refers repeatedly in its brief to “pending zoning
change,” “impending amendment,” “impending zoning change” to
describe the point at which LSA’s good-faith reliance on the existing
zoning ended. However, no zoning change was “pending” until
Bernardini introduced the down-zoning ordinance on December 10,
1997. American National Bank does not support the City’s position.
There, the property owners’ expenditures and contractual obligations
largely preceded the public release of the zoning plan on which the
proposed amendment was based. In contrast to the situation in the
instant case, the zoning plan in American National Bank was in
existence and pending before the city council. The actual ordinance
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that changed the zoning was not introduced until after the owners had
submitted their application for a building permit. There is nothing in
American National Bank that suggests a property owner may be
precluded from gaining a vested right merely because one city council
member expresses an intent to introduce a down-zoning ordinance at
some future time.
Other cases cited by the City are not to the contrary. In Kramer
v. City of Chicago, 58 Ill. App. 3d 592, 597 (1978), the amendatory
zoning ordinance had been enacted more than two years before a
building permit was applied for. The appellate court noted that the
owner at the very least had constructive notice of the change in zoning
and thus could not have relied on the probable issuance of a building
permit. In People ex rel. National Bank of Austin v. County of Cook,
56 Ill. App. 2d 436 (1965), the only issue was the substantiality of the
plaintiff’s claimed expenditures. There was no discussion in the
appellate court’s opinion on the issue of when the plaintiff could no
longer rely on the probability of obtaining a building permit for its
project. In Chicago Title & Trust, a proposed change in the property’s
zoning classification was pending before the municipality’s zoning
authorities, on which public hearings had been held over a period of
several months. The appellate court noted that it would be illogical to
hold that one could gain a vested right to build under the existing
zoning classification merely by filing an application for a building
permit, where a comprehensive zoning ordinance was under
consideration by the municipality and on which public hearings had
been held. Chicago Title & Trust Co. v. Village of Palatine, 22 Ill.
App. 2d 264, 270 (1959). VonBokel v. City of Breese, 100 Ill. App.
3d 956 (1981), did not discuss the vested-rights doctrine; rather, the
case turned on principles of equitable estoppel based upon alleged
assurances by the municipality regarding approval of the plaintiff’s
subdivision plat if certain changes were made.
We conclude that when considering whether a property owner has
gained a vested right to build under the property’s then-existing
zoning classification, the starting point for the analysis must be the
point at which some official action took place that could result in a
change in the property’s zoning. At a minimum, this would require
actual introduction of a proposal to the appropriate zoning authorities
which, if enacted into law, would change the property’s existing
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zoning to a classification that would not allow construction of the
property owner’s building project. In the instant case, Bernardini
introduced his down-zoning proposal to the city council on December
10, 1997. This action followed several months of changes in the
building’s design in an effort to satisfy concerns raised by Bernardini
and reach a compromise with objecting neighbors. Only when it was
determined that no agreement would be reached did Bernardini
introduce the down-zoning ordinance. At that point, LSA knew or
should have known that it was not probable it would obtain a building
permit for its project.
The circuit court limited its consideration of LSA’s expenditures
to those incurred up to a date shortly after Bernardini’s April or May
1997 meeting with Guthman and representatives of Draper. Having
determined that the circuit and appellate courts erred in identifying the
date on which LSA knew or should have known that it would
probably not receive the necessary approvals to complete its project,
we conclude that this cause must be remanded to the circuit court for
a determination as to the expenditures and/or obligations incurred by
LSA up to December 10, 1997.
III
LSA takes issue with some of the findings of the circuit court
regarding the expenditures to be counted in determining whether LSA
had a vested right to build under the RPD 196 zoning. We note that
we will not disturb the trial court’s findings of fact unless they are
contrary to the manifest weight of the evidence. Pioneer Trust, 71 Ill.
2d at 516-17. The only specific argument LSA makes regarding the
circuit court’s findings on its expenditures is that it should have been
credited for the amounts paid by Draper to its employees for work
done on the building project. LSA argued that the employees
performed 738 hours of work for a total expenditure of $100,287.50.
The circuit court rejected LSA’s claim, relying on National Bank of
Austin. The court in that case refused to credit $1,600 of salary
payments to the plaintiff’s employees, finding that the employees
would have been paid regardless of whether they worked on the
building project. National Bank of Austin, 56 Ill. App. 2d at 448. LSA
seeks to distinguish that case by noting that the employees here work
for Draper, not for LSA. It also argues that the record shows that
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those employees might not have been kept on the payroll absent
LSA’s building project. However, the appellate court noted that the
only witness to testify concerning this issue stated that without LSA’s
project, the employees would either have worked on other projects or
would not have been retained, “one of the two.” 363 Ill. App. 3d at
821. The appellate court found this evidence to be speculative and
therefore insufficient to show that payments to Draper’s employees
should be counted toward LSA’s expenditures. We agree and
conclude that the circuit court’s finding on this issue was not against
the manifest weight of the evidence.
IV
LSA also argues that the appellate court erred in devising a test to
determine whether LSA’s expenditures were substantial. The appellate
court found very little assistance in the case law on how to determine
the issue of substantiality. Nonetheless, the court concluded that the
following factors are relevant in making a substantiality determination:
(1) a comparison of the expenses incurred to the total projected cost
of the development; (2) purchase price of the land; (3) the character
of the entity incurring the costs (individual homeowner versus a large
developer); and (4) any other factor that may be deemed relevant to
the question of substantiality. Finally, the appellate court held that
courts should employ a “totality-of-circumstances approach, rather
than measure substantiality in terms of absolute dollars only.” 363 Ill.
App. 3d at 822-23. In applying these factors, the court took into
account an additional $17,400 that LSA claimed the circuit court
ignored in calculating the expenditures incurred, for a total of $36,300
in expenses. The court noted that the estimated value of the land was
$6 million and the projected cost of the development was $70 million.
The court also considered the character of LSA and found that it was
not an entity for whom $36,300 would be considered a substantial
expenditure. Thus, the court affirmed the circuit court’s finding that
LSA’s expenses were not sufficiently substantial to give rise to a
vested right. 363 Ill. App. 3d at 823. We have held that the circuit and
appellate courts erred in their vested-rights analysis. On remand, the
circuit court must determine the amount of LSA’s expenditures up to
December 10, 1997, the date on which Bernardini introduced the
down-zoning ordinance to the city council. The court will again have
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to make a determination as to whether those expenditures were
sufficiently substantial to give LSA a vested right to complete its
project. Accordingly, we consider the issue of substantiality.
One of the factors to be considered, according to the appellate
court, is a comparison of the amount spent in good-faith reliance on
a proposed development with the projected costs of the development.
363 Ill. App. 3d at 822. This is the concept of proportionality. LSA
argues that proportionality should not be considered, citing American
National Bank. The court in that case stated that it is the rule in
Illinois that substantiality is determined without regard to any
proportionality test and by considering the cost of the land. American
National Bank, 19 Ill. App. 3d at 34. In support, the court cited
National Bank of Austin, 56 Ill. App. 2d 436. However, the latter case
did not discuss the issue of proportionality of expenditures. Other
cases have also not used a proportionality calculation when deciding
whether expenditures were substantial. See, e.g., Illinois Mason
Contractors, Inc. v. City of Wheaton, 19 Ill. 2d 462 (1960) (loan
commitment of $50,000, a contract for work totaling $30,000, and
expenditures of $5,600); People ex rel. Skokie Town House Builders,
Inc. v. Village of Morton Grove, 16 Ill. 2d 183 (1959) (land
purchased for $26,000, expenditures of $1,830); Fifteen Fifty North
State Building Corp. v. City of Chicago, 15 Ill. 2d 408 (1958)
($105,000 architectural contract and $5,100 in expenses); O’Connell
Home Builders, Inc. v. City of Chicago, 99 Ill. App. 3d 1054 (1981)
($12,000 architectural fee and $5,500 for tree removal); Mattson v.
City of Chicago, 89 Ill. App. 3d 378 (1980) (demolition of plaintiff’s
home worth more than $40,000 and expenditures of $4,100); Deer
Park Civic Ass’n v. City of Chicago, 347 Ill. App. 346 (1952) (land
purchased for $41,000, contractual liabilities incurred of over
$597,000, and extensive construction work performed). In these
cases, the expenses were not compared to anything; they were
declared to be substantial based upon the amount alone.
Defendants argue that proportionality is a proper consideration in
determining whether expenditures are substantial. In support of this
argument, they cite Zeitz v. Village of Glenview, 304 Ill. App. 3d 586
(1999). The appellate court in that case found that the plaintiffs did
not establish a probability that the village would approve their
subdivision plan and that, even assuming they had made such a
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showing, the amount of their expenditures, in comparison to the
property’s value of more than $1 million, failed to establish
detrimental reliance. Zeitz, 304 Ill. App. 3d at 594. This statement,
however, was not necessary to the court’s holding and is properly
termed dicta. Nonetheless, we agree with defendants and with the
appellate court below that proportionality is a factor to be considered
in the substantiality analysis. The purpose of the vested-rights doctrine
is to mitigate the unfairness caused by a zoning change when a
property owner has made a substantial change of position in good-
faith reliance on the probability of obtaining a building permit. See
Cos Corp. v. City of Evanston, 27 Ill. 2d 570, 576-77 (1963).
Whether a change of position is substantial depends on the facts of
each case. It is not possible to properly make this determination by
considering only the objective amount of expenditures in a vacuum.
Necessarily, then, one must consider not only the amount of
expenditures, but also factors that make each case unique. One of
these factors is, as the appellate court held, the projected cost of the
development. Other factors, such as the nature or character of the
person or entity seeking to develop the property and the cost of the
land are also appropriate considerations in deciding whether
expenditures are substantial. There may, as well, be other factors in
individual cases that a court may properly consider. None of these
factors should be viewed in isolation; rather, as the appellate court
noted, it is the totality of the circumstances that will determine
whether expenditures in any given case are deemed to be substantial.
Thus, we agree with the formulation set forth by the appellate court
with respect to making a determination of substantiality.
V
LSA argues that the circuit and appellate courts erroneously
placed the burden of proof on it to show the date on which it knew or
should have known it was probable that Bernardini would introduce
a down-zoning ordinance. Questions regarding the burden of proof
are questions of law and are reviewed de novo. See People v. Lindsey,
199 Ill. 2d 460, 471 (2002). In its fourth amended complaint, LSA
requested that a writ of mandamus issue to the City of Chicago
zoning administrator to issue a zoning certificate, certifying that the
plans submitted as part of LSA’s Part II application conform to the
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RPD 196 zoning. To be entitled to a writ of mandamus, the plaintiff
must establish a clear right to relief, a clear duty of the public official
to act, and a clear authority in the public official to comply with the
writ. People ex rel. Madigan v. Snyder, 208 Ill. 2d 457, 465 (2004).
The burden rests on the plaintiff to show a clear legal right to issuance
of the writ. Chicago Ass’n of Commerce & Industry v. Regional
Transportation Authority, 86 Ill. 2d 179, 185 (1981). On April 29,
1998, the Chicago city council approved the down-zoning ordinance
introduced by Bernardini, changing the zoning of LSA’s property
from RPD 196 to R6 General Residence District. On August 25,
1998, LSA filed the instant action. Under the property’s then-existing
zoning classification, R6 General Residence District, LSA’s proposed
building project was not a permitted use. Accordingly, to be entitled
to the zoning certificate and building permit it sought, LSA had to
establish a vested right to build under the former RPD 196 zoning
ordinance. Absent proof of a vested right, LSA’s mandamus
complaint must fail.
LSA asserts that Illinois property owners have never before been
saddled with a duty to continuously prove an ongoing right to rely on
the law that was enacted specifically to govern their conduct.
However, we have noted that property owners have no vested right
to the continuation of existing zoning laws. Pioneer Trust, 71 Ill. 2d
at 517. That principle of law may be overcome only if a property
owner establishes a vested right to build under the property’s former
zoning. In support of its argument that defendants have the burden of
proving the point at which LSA’s good-faith reliance ended, LSA
relies on American National Bank. Although some language in that
case can be read as shifting the burden of proof to the party opposing
the plaintiff’s claim to a vested right, it can also be read as simply
noting that, once the plaintiff has established a material change of
position in reliance on the probability that a building permit would
issue, the defendant must come forward with some proof to the
contrary. See American National Bank, 19 Ill. App. 3d at 36 (“The
record shows that the petitioners expended substantial sums in
reliance on the probability a permit would issue. Having established
their right to a writ, it was for the respondents to show that the
petitioners did not rely on existing zoning at the time the expenditures
were made”). One way to make this showing would be to demonstrate
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that the plaintiff was aware of a proposed or actual zoning change at
the time the expenditures were made. This does not, however, shift
the burden of proof to the defendant; rather, the defendant must, as in
any other case, put forth evidence to counter the plaintiff’s proof. We
conclude that the courts below did not err in placing the burden on
LSA to demonstrate a vested right to build under the RPD 196
zoning.
VI
LSA argues that under the City’s zoning ordinance and
regulations, it was entitled to a zoning certificate and building permit
once the City issued its Part II approval letter. Thus, according to
LSA, the prior-pending-ordinance doctrine does not apply to permit
the City to withhold the necessary approvals on the building project.
The City argues, and we agree, that LSA has forfeited this issue
because it did not include the issue in its petition for leave to appeal.
Failure to include an issue in a petition for leave to appeal results in
forfeiture of that issue for review. People v. Carter, 208 Ill. 2d 309,
318 (2003). Accordingly, we decline to consider this argument.
CONCLUSION
For the reasons stated, we reverse the judgments of the circuit
court and the appellate court and remand to the circuit court for a
determination of the amount of expenses incurred by LSA as of
December 10, 1997 and whether those expenses were sufficiently
substantial to give LSA a vested right to develop its building project
under the former RPD 196 zoning classification.
Appellate court judgment reversed;
circuit court judgment reversed;
cause remanded.
JUSTICE BURKE took no part in the consideration or decision
of this case.
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