SECOND DIVISION
FILED: April 20, 2010
No. 1-09-1126
1350 LAKE SHORE ASSOCIATES, an ) APPEAL FROM THE
Illinois limited partnership, ) CIRCUIT COURT OF
) COOK COUNTY.
Plaintiff-Appellant, )
)
v. )
)
ARNOLD L. RANDALL, Commissioner, )
Department of Planning and Development )
of the City of Chicago, and the CITY )
OF CHICAGO, an Illinois municipal )
corporation, ) No. 07 CH 16368
)
)
Defendants-Appellees, )
)
and )
)
EDWARD T. JOYCE, CARL HUNTER, JOHN )
STASSEN, JOHN C. MULLEN, CLARK W. )
FETRIDGE, RESPICIO F. VASQUEZ and )
BERNARD J. MILLER, ) THE HONORABLE
) STUART PALMER,
Intervenors-Appellees. ) JUDGE PRESIDING.
JUSTICE HOFFMAN delivered the opinion of the court:
Following a remand from the Illinois Supreme Court, the
Circuit Court of Cook County entered an order finding that the
plaintiff, 1350 Lake Shore Associates (LSA), failed to prove a
clear right to a writ of mandamus, as its pre-development
expenditures were not sufficiently substantial to acquire a
vested right in the continuation of a former zoning
No. 1-09-1126
classification. LSA now appeals, raising a number of factual and
legal challenges to the circuit court's decision. For the
reasons which follow, we affirm.
The procedural history of this matter is long and complex,
comprising over 11 years of litigation and numerous appeals. For
the sake of brevity, we have attempted to limit our recitation of
the facts to those necessary to resolve the issues presented in
the instant appeal.
In 1952, LSA's predecessor in interest purchased the
property located at 1320-30 Lake Shore Drive (the property) for
$195,118.08. Twenty-six years later, on November 14, 1978, the
Chicago City Council approved LSA's application to change the
property's zoning from an "R8 General Residence District"
classification to "Residential Planned Development 196" (RPD
196). The RPD 196 classification permitted the construction of a
40-story, 196-unit apartment building on the property.
After having secured the passage of RPD 196, LSA chose not
to develop the property at that time. It was not until 1996 that
LSA's agent, Draper and Kramer, Inc. (Draper), began
investigating the possibility of developing the property in
conformity with RPD 196. To that end, Draper hired Jack Guthman,
an attorney specializing in zoning law, in early 1997. Draper
also subsequently hired an architect, a surveyor, an urban
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planner, an elevator consultant, and an artist to create a
rendering from the architect's conceptual drawings.
In April or May of 1997, Guthman and representatives of
Draper met with Charles Bernardini, then alderman of the ward in
which the property is located. At that meeting, Bernardini was
shown the preliminary designs for a high-rise building. Though
Bernardini acknowledged that he did not mention changing the
property's zoning classification at this time, he did inform
Guthman and the Draper representatives that, due its size and
density, the proposed development would be controversial and
that, if they wanted his support, they should meet with
neighborhood representatives and reach an agreement.
Shortly after the first meeting, Bernardini told Guthman
that he had received complaints from neighbors regarding the
project and that he was considering down-zoning the property if
LSA and the neighbors could not reach a compromise. No agreement
was reached, and, on December 10, 1997, Bernardini introduced an
ordinance before the Chicago City Council to down zone the
property to an "R6 General Residence District."
The next day, the project's architect submitted plans for a
high-rise building to the City of Chicago's Department of
Planning and Development, seeking the issuance of a Part II
Approval letter. For a property located in a planned
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development, a Part II Approval letter is a prerequisite to the
issuance of a zoning certificate, which, in turn, is a
prerequisite to the issuance of a building permit. See Chicago
Zoning Ordinance § 11.5 (amended 7-21-00), § 11.11-3(b) (amended
12-11-91).
On April 29, 1998, the Chicago City Council approved the
down-zoning ordinance. LSA never received a response from the
Department of Planning and Development regarding its request for
a Part II Approval letter. Without a Part II Approval letter,
LSA was unable to obtain a zoning certificate or a building
permit.
On August 25, 1998, LSA filed a complaint naming as
defendants the City of Chicago (City) and the Commissioner of the
Department of Planning and Development. In relevant part, LSA's
complaint sought a writ of mandamus directing the Commissioner to
issue a Part II Approval letter1. Thereafter, certain
1
LSA's complaint also contained a count seeking a declaration
that the down-zoning ordinance did not affect its right to develop
the property in conformity with RPD 196 and an injunction barring
the City of Chicago from enforcing the down-zoning ordinance. This
count, however, was later voluntarily dismissed on LSA's own
motion. In addition, the complaint sought a declaration that the
down-zoning ordinance was void. Following a trial on this issue,
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individuals who lived within 250 feet of the property at issue
were allowed to intervene.
Following a trial, the circuit court ruled in favor of the
defendants and the intervenors, finding that a Part II Approval
letter need not be issued because a down-zoning ordinance was
pending before the city council. On appeal, we concluded that
the circuit court erroneously relied upon the pending-ordinance
doctrine and remanded the case with directions that a writ of
mandamus be entered requiring that a Part II Approval letter be
issued. 1350 Lake Shore Associates v. Hill, 326 Ill. App. 3d
788, 798, 761 N.E.2d 760 (2001) (Lake Shore I).
Upon remand, the intervenors filed a motion seeking a
declaration that LSA was not entitled to a zoning certificate or
building permit for the development of its proposed high-rise
building. LSA then amended its complaint, seeking orders
requiring the City to issue it a zoning certificate and enjoining
the City from interfering with its rights under RPD 196.
the circuit court found that the challenged ordinance was
constitutionally valid as applied to the property, and we
previously affirmed the court's findings in this regard. 1350 Lake
Shore Associates v. Casalino, 352 Ill. App. 3d 1027, 1048-49, 816
N.E.2d 675 (2004).
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No. 1-09-1126
Although the circuit court ordered that a Part II Approval letter
be issued, it held that LSA did not have a vested right to the
issuance of a zoning certificate or building permit. The circuit
court specifically found that the expenditures incurred by LSA
were not made in good-faith reliance on the RPD 196 zoning
classification, but were made in the hope of reaching a
compromise with the neighborhood representatives.
On appeal, this court concluded that LSA's vested-rights
claim required additional findings of fact. Accordingly, we
remanded the matter 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 that Bernardini would
introduce a down-zoning ordinance; (2) the total amount of the
expenses incurred by LSA in connection with the project as of
that date; and (3) whether those expenses were substantial enough
to give rise to a vested right to the issuance of a zoning
certificate and building permit pursuant to RPD 196. 1350 Lake
Shore Associates v. Mazur-Berg, 339 Ill. App. 3d 618, 640-41, 791
N.E.2d 60 (2003) (Lake Shore II).
On remand, the circuit court determined that: (1) LSA knew
it was probable that Bernardini would introduce a down-zoning
ordinance on any date after the meeting in April or May of 1997
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No. 1-09-1126
between Guthman, the Draper representatives, and Bernardini; (2)
as of that date, LSA had expended $18,900.16 in connection with
the project; and (3) the expenditures were not sufficiently
substantial to give LSA a vested right to the issuance of a
zoning certificate and building permit under RPD 196. LSA
appealed once again.
While this court affirmed the circuit court's findings (1350
Lake Shore Associates v. Casalino, 363 Ill. App. 3d 806, 823, 842
N.E.2d 274 (2005) (Lake Shore III)), the Illinois Supreme Court
reversed, concluding that LSA knew or should have known that it
was not probable that its project would be approved only after
Bernardini introduced the down-zoning ordinance in the city
council on December 10, 1997 (1350 Lake Shore Associates v.
Healey, 223 Ill. 2d 607, 622-23, 861 N.E. 2d 944 (2006)
(Healey)). The supreme court remanded the matter back 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 the property under the former RPD 196 zoning
classification. Healey, 223 Ill. 2d at 629-30.
Upon remand from the supreme court, the circuit court
allowed LSA to present the testimony of two additional witnesses,
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No. 1-09-1126
Frederick Ford and Matthew Medlin. Ford testified that he was
the executive vice president and treasurer of D & K Insurance
Agency, Inc., one of the general partners of LSA. Based on his
experience in the real estate industry and his experience
overseeing LSA's financial planning, Ford believed that LSA is a
"very risk averse company." He testified that the partners of
LSA "were for the most part wealthy people who didn't need you to
speculate with their money." Ford also believed that LSA was a
"frugal," "penny-pinching operation."
Over the City's relevancy objections, Medlin, a certified
public accountant, testified as an expert witness. Medlin
reviewed LSA's financial statements and found that its pre-
development expenditures of $272,022 represented more than 12% of
its net income in 1997, over 10% of LSA's cash flow from
operations, more than 6% of its gross profits, over 2% of its
total revenues, more than 1% of LSA's total depreciable assets,
and more than 4% of its owners' equity. Based on these
benchmarks, Medlin believed that LSA's expenditures were material
from an accounting perspective. Medlin testified that
materiality is determined by resolving the inquiry as to whether
a reasonable person, such as a potential investor or banker
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No. 1-09-1126
considering a loan, would be adversely influenced if the
expenditures were not included in LSA's financial statements.
On March 25, 2009, the circuit court issued a written
memorandum order in which it determined that LSA incurred
$272,022.18 in expenditures before the down-zoning ordinance was
introduced on December 10, 1997. In its decision, the circuit
court rejected Medlin's testimony, finding it "marginally
relevant" but not persuasive to the matters before the court. It
also rejected Ford's testimony that LSA was frugal and "penny
pinching" as "too subjective and self-serving" and, instead,
found LSA to be a large entity with substantial profits and
assets that could easily absorb the loss of $272,022.18. Noting
that LSA's expenditures amounted to less than ½ of 1% of the $72
million to $76 million total projected cost of the development,
the court found that these expenditures were not sufficiently
substantial to give LSA a vested right in the former RPD 196
zoning classification. The circuit court concluded that LSA
failed to prove a clear right to mandamus relief and entered
judgment for the defendants. The instant appeal followed.
In urging reversal, LSA contends that the circuit court
erred in finding that $272,022.18 in pre-development expenditures
was not sufficiently substantial to acquire a vested right to
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develop the property in accordance with the RPD 196 zoning
classification. It asserts that the circuit court applied
incorrect legal criteria and that the court's decision is against
the manifest weight of the evidence.
Before addressing the merits of LSA's arguments, we must
first determine our standard of review. Mandamus is an
extraordinary remedy traditionally used to compel a public
officer's performance of an official duty that does not involve
an exercise of discretion. People ex rel. Birkett v. Jorgensen,
216 Ill. 2d 358, 362, 837 N.E.2d 69 (2005). Typically, the
decision to grant or deny a writ of mandamus will not be
disturbed on appeal unless it is against the manifest weight of
the evidence. Lombard Historical Comm'n v. Village of Lombard,
366 Ill. App. 3d 715, 719, 852 N.E.2d 916 (2006). That is to
say, only when the opposite conclusion is clearly evident or
where the factual findings upon which it is based are
unreasonable, arbitrary, or not based on the evidence. IMC
Global v. Continental Insurance Co., 378 Ill. App. 3d 797, 804,
883 N.E.2d 68 (2007). However, the question of whether the
circuit court applied the correct legal standard is one of law,
which we review de novo. NC Illinois Trust Co. v. National City
Bank of Michigan/Illinois, 351 Ill. App. 3d 311, 314, 812 N.E.2d
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No. 1-09-1126
1038 (2004). With these standards of review in mind, we now turn
to the issues raised on appeal.
A municipality has the right to amend its zoning ordinances
(Ropiy v. Hernandez, 363 Ill. App. 3d 47, 51, 842 N.E.2d 747
(2005)), and one who purchases land is charged with the
understanding that its zoning classification may be changed in
the future (Furniture LLC v. City of Chicago, 353 Ill. App. 3d
433, 438, 818 N.E.2d 839 (2004)). Accordingly, the general rule
is that a property owner has no vested right in the continuation
of a zoning classification. Pioneer Trust & Savings Bank v.
County of Cook, 71 Ill. 2d 510, 517, 377 N.E.2d 21 (1978).
Illinois courts, however, have recognized an exception to this
rule.
Under the vested-right doctrine, a property owner may
acquire a vested right in a prior zoning classification where the
owner sustained a significant change of position, by either
making substantial expenditures or incurring substantial
obligations, in good-faith reliance upon the probability of the
issuance of a building permit. People ex rel. Skokie Town House
Builders, Inc. v. Village of Morton Grove, 16 Ill. 2d 183, 191,
157 N.E. 2d 33 (1959); Furniture LLC, 353 Ill. App. 3d at 437.
The purpose of this exception is to mitigate the unfairness
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caused by a zoning change after a property owner has undergone a
substantial change of position in good-faith reliance on the
prior zoning classification. Healey, 223 Ill. 2d at 626.
The determination of whether a property owner has obtained a
vested right in a former zoning classification by reason of
making substantial expenditures or incurring substantial
obligations requires the resolution of two questions. First, it
must be determined which of the expenditures made or obligations
incurred by the property owner were done in good-faith reliance
on the probability that it would obtain the necessary approvals
to develop the property pursuant to the prior zoning
classification. Healey, 223 Ill. 2d at 615, 623. Second, it
must be determined whether those expenditures or obligations were
substantial. Healey, 223 Ill. 2d at 615, 629-30.
As noted above, the supreme court previously determined that
as of December 10, 1997, the date on which the down-zoning
ordinance was introduced to the city council, LSA knew or should
have known that it was improbable that it would receive the
necessary approvals to complete its project in accordance with
RPD 196. See Healey, 223 Ill. 2d at 622-23. Following a remand,
the circuit court concluded that, as of that date, LSA's
expenditures totaled $272,022.18. On appeal, the parties have
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raised no argument addressing the circuit court's calculation of
LSA's expenditures. Consequently, we focus our consideration on
whether the expenditure of $272,022.18 by LSA was substantial
enough to give rise to a vested right to develop the property
under the RPD 196 zoning classification.
In determining whether expenditures are substantial, courts
evaluate the totality of the circumstances, including: (1) a
comparison of the expenses incurred to the total projected cost
of the development; (2) the purchase price of the land; (3) the
nature or character of the person or entity seeking to develop
the property; and (4) any other factor that may be deemed
relevant. Healey, 223 Ill. 2d at 627. No single factor is
controlling, and each case presents a unique factual situation
which must be assessed when determining substantiality. Healey,
223 Ill. 2d at 626-27.
Initially, LSA argues that the circuit court erred in
discounting Medlin's testimony regarding the materiality of its
pre-development expenditures. It asserts that courts applying
Illinois law have often used the concepts of "material" and
"substantial" interchangeably. See e.g., Thacker v. U.N.R.
Industries, Inc., 151 Ill. 2d 343, 354-355, 603 N.E.2d 449 (1992)
("Under the 'substantial factor' test, which has been adopted by
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the Restatement (Second) of Torts, the defendant's conduct is
said to be a cause of an event if it was a material element and a
substantial factor in bringing the event about") (Emphasis
added.); Opp v. Wheaton Van Lines, Inc., 56 F. Supp. 2d 1027,
1034 n.5 (N.D. Ill. 1999) ("The doctrine of 'substantial
compliance' or 'substantial performance' dictates that 'when a
party performs the essential, material parts of a contract in
good faith,' even if literal compliance with the terms is
lacking, the other party may be bound") (Emphasis added.).
According to LSA, Medlin's opinion that its expenditures were
material from an accounting perspective should, likewise, be
considered relevant to the question of whether its pre-
development expenditures were substantial for the purposes of
acquiring a vested right. We disagree.
In this case, Medlin reviewed LSA's financial statements and
found that its expenditures of $272,022 represented more than 12%
of its net income in 1997, over 10% of LSA's cash flow from
operations, more than 6% of its gross profits, over 2% of its
total revenues, more than 1% of LSA's total depreciable assets,
and more than 4% of its owners' equity. Based on these
benchmarks, Medlin opined that LSA's pre-development expenditures
were material from an accounting perspective. Although LSA seeks
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to equate materiality from an accounting perspective with
substantiality in the context of a vested-rights case, the two
concepts do not utilize the same determinative criteria and are
not interchangeable.
Materiality from an accounting standpoint compares
expenditures to a number of financial benchmarks to determine
whether they must be included in the financial statements;
whereas, substantiality in the vested-rights context compares
expenditures to the total projected cost of the development in
order to determine whether a property owner has acquired a vested
right in a prior zoning classification. See People ex rel.
Skokie Town House Builders, 16 Ill. 2d at 191. Furthermore,
substantiality employs a broader test, taking into account
additional factors, such as the nature or character of the
property owners. See Healey, 223 Ill. 2d at 627.
For evidence to be relevant, it must have the tendency to
make a fact of consequence to the determination of the action
more or less probable. Voykin v. Estate of Deboer, 192 Ill. 2d
49, 57, 733 N.E.2d 1275 (2000). Given the dissimilarities
between materiality and substantiality, Medlin's testimony
regarding the material nature of LSA's expenditures from an
accounting perspective provided little, if any, assistance to the
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circuit court in its determination as to whether those same
expenditures were substantial for purposes of applying the
vested-rights doctrine. It was the function of the circuit
court, as the trier of fact, to determine the weight to be
afforded the evidence, and the court's decisions in this regard
will not be overturned on appeal unless they are against the
manifest weight of the evidence. Eychaner v. Gross, 202 Ill. 2d
228, 251, 779 N.E.2d 1115 (2002). Under the facts of this case,
we conclude that the circuit court's findings that Medlin's
testimony was "marginally relevant" and unpersuasive are not
against the manifest weight of the evidence.
Next, LSA argues that the circuit court's finding that its
pre-development expenditures were insubstantial is contrary to
the long history and precedents of Illinois vested-rights
jurisprudence. In its briefs before this court, LSA cites to a
litany of cases in which expenditures less than $272,022.18 have
been considered substantial. See e.g., Illinois Mason
Contractors, Inc. v. City of Wheaton, 19 Ill. 2d 462, 465, 167
N.E.2d 216 (1960) ($30,000 contract for work to be done, purchase
of $5,000 in construction materials, and a $3,250 loan
commission); People ex rel. Skokie Town House Builders, Inc., 16
Ill. 2d at 191-92 ($26,000 for the purchase of the property and
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No. 1-09-1126
$1,830 in permit fees and sidewalk deposit); Constantine v.
Village of Glen Ellyn, 217 Ill. App. 3d 4, 25, 575 N.E.2d 1363
(1991) ($70,100 purchase price of the property and $1,400
architect fee); O'Connell Home Builders, Inc. v. City of Chicago,
99 Ill. App. 3d 1054, 1061, 425 N.E.2d 1339 (1981) ($17,500 spent
on architectural fees and tree removal service); Mattson v. City
of Chicago, 89 Ill. App. 3d 378, 381, 411 N.E.2d 1002 (1980)
(demolition of home valued at $40,000 plus $4,100 in demolition
and architectural fees); Sgro v. Howarth, 54 Ill. App. 2d 1, 9-
10, 203 N.E.2d 173 (1964) ($23,500 for the purchase of the
property plus undisclosed permit fees). The difficulty with
these cases, however, is that they only reference the amount of
expenditures incurred and do not identify the total projected
costs of the developments or provide a comparison of the
expenditures to the projected development costs.
In Healey, the Illinois Supreme Court acknowledged for the
first time that the proportionality between the expenditures
incurred and the total projected cost of the development was a
factor to be considered in determining substantiality. See
Healey, 223 Ill. 2d at 626-27. In adopting proportionality as a
factor, the supreme court held that the determination as to
whether a property owner has made a substantial change of
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No. 1-09-1126
position in good-faith reliance on the probability of obtaining a
building permit could not be decided "by considering only the
objective amount of expenditures in a vacuum." Healey, 223 Ill.
2d at 626-27. In light of the supreme court's holding in Healey,
the precedential value of the prior vested-rights cases cited by
LSA is limited, at best.
Our own research has reveled a single Illinois vested-rights
case that clearly contains both the expenditures and the total
projected cost of the development, Cribbin v. City of Chicago,
384 Ill. App. 3d 878, 893 N.E.2d 1016 (2008). In Cribbin, this
court concluded that the property owners' pre-development
expenditure of $260,000 was substantial. Cribbin, 384 Ill. App.
3d at 894. The facts of that case further demonstrate that the
owners intended to construct three buildings on the property at a
total cost of $950,000. Cribbin, 384 Ill. App. 3d at 883.
Accordingly, the $260,000 in expenditures found to be substantial
in Cribbin represented more than 27% of the total projected cost
of the development.
In this case, however, the $272,022.18 in expenditures
incurred by LSA prior to December 10, 1997, amounted to less than
½ of 1% of the estimated $72 million to $76 million total
projected cost of the development. We believe that LSA's
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expenditures, when viewed in relation to the ultimate cost of the
development, cannot be considered substantial.
In reaching this conclusion, we reject LSA's assertion that
reliance on a strict mathematical comparison of the expenditures
to the projected development costs would "effectively end"
vested-rights claims for developers, as any pre-development
expenditures incurred by a property owner before receiving a
building permit will necessarily be a small fraction of the total
costs of the project, particularly when the development is a
large structure. The vested-rights doctrine is the exception,
not the rule. Until the property owner has made a substantial
change of position, the municipality has an ongoing right to
amend its zoning ordinances. See Ropiy, 363 Ill. App. 3d at 51.
In the event that an existing zoning ordinance changes prior to
the accrual of a vested right in that zoning classification, the
property owner has no cause to object to a rezoning. See Shepard
v. Illinois Pollution Control Board, 272 Ill. App. 3d 764, 772,
651 N.E.2d 555 (1995); County of Kendall v. Aurora National Bank,
219 Ill. App. 3d 841, 850, 579 N.E.2d 1283 (1991). Moreover,
LSA's argument is belied by the facts of Cribbin, where the pre-
development expenditures equaled more than 27% of the total cost
of the project even though no construction permit had issued.
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See Cribbin, 384 Ill. App. 3d at 880, 894. Consequently, we
believe it is unlikely that our decision will "effectively end"
vested-rights claims for developers.
LSA also alleges that a strict mathematical comparison of
the expenditures to the projected development costs would be
"subject to manipulation by encouraging developers to build with
cheaper materials or to refuse to agree to changes requested by
the community that could raise development costs." However, as
LSA's musings in this regard are unanchored and undeveloped, we
find them to be lacking in merit with no need for further
discussion.
We, likewise, reject LSA's contention that the circuit
court's decision erroneously suggested that expenditures less
than 2% of the total projected cost of the development could not
be considered substantial. In its March 25, 2009, order, the
circuit court stated that "[i]t is worth noting" that this court
had used a $20,000 expenditure toward a $1 million project, or an
expenditure equal to 2% of the projected development cost, as an
example of an insubstantial expenditure. See Lake Shore III, 363
Ill. App. 3d at 822, rev'd on other grounds, Healey, 223 Ill. 2d
at 629-30. Despite LSA's assertions to the contrary, neither we
nor the circuit court held that 2% is the minimum threshold that
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must be reached for an expenditure to be considered substantial.
Our reference in Lake Shore III to "[a] developer who spends
$20,000 on a project estimated to cost $40,000 is in quite a
different position than a developer who spends $20,000 on a
project estimated to cost $1 million," was merely an explanation
of the rationale for comparing the amount spent on a proposed
development to the total cost of the project, not a minimum
threshold. See Lake Shore III, 363 Ill. App. 3d at 822, rev'd on
other grounds, Healey, 223 Ill. 2d at 629-30.
LSA next argues that the circuit court erred in determining
its nature or character and improperly concluded that the nature
or character of a property owner, for the purposes of the vested-
rights doctrine, turns on whether the owner was an individual
homeowner or a large developer.
Contrary to LSA's contention, the circuit court did not base
its determination of LSA's nature or character on its status as
either an individual homeowner or large developer. Rather, the
court's decision in this regard was based on the fact that LSA
had substantial profits and assets and, therefore, could easily
absorb the loss of $272,022.18. Specifically, the circuit court
noted that LSA's assets included: (1) the property at issue,
valued at $6 million in 1997; (2) two, 22-story high-rise
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buildings with 740 units located at 1350-60 North Lake Shore
Drive; (3) a 27% interest in Second Prairie Shores Apartments;
(4) a 9% interest in Third Prairie Shores Apartments; and (5) a
10% interest in Astor Lane Associates, which owns high-rise
residential and industrial buildings throughout Chicago. The
court also noted that LSA's depreciable assets totaled more than
$25 million in 1996 and more than $26 million in 1997; that LSA's
net income was almost $1.9 million in 1996 and almost $2.2
million in 1997; that executives at Draper testified that LSA had
"significant assets" and, as such, financing the construction
project would not have been difficult; that LSA has four general
partners and more than 100 limited partners, who are considered
"wealthy" individuals; and that distributions of $46 million were
made to the partners in 2000 and 2001.
In Lake Shore III, we held that courts should consider the
character of the entity incurring the cost of the development,
noting that what might be considered a large investment for an
individual homeowner could be considered minimal for a large land
developer. Lake Shore III, 363 Ill. App. 3d at 822. The supreme
court subsequently adopted the nature or character of the person
or entity seeking to develop the property as a factor to be taken
into account in making a substantiality determination. Healey,
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223 Ill. 2d at 627. Although LSA sought to establish that it was
a "frugal" and "penny-pinching organization" through the
testimony of Ford, we do not believe that the circuit court erred
in rejecting Ford's subjective views of the nature or character
of LSA. Instead, the court relied on objective evidence, such as
LSA's assets and profits, in making this determination.
Alternatively, LSA takes issue with some of the circuit
court's factual findings regarding its nature or character. In
particular, LSA contends that the circuit court ruled that
evidence concerning the distributions made to partners after 1997
was inadmissible. Our review of the record, however, reveals
that, while the circuit court found that LSA's financial
statements from the years 2000 to 2006 were not "independently
relevant" for the purposes of evaluating Medlin's expert
testimony, the court had previously admitted LSA's 2000 and 2001
financial statements into evidence. As the circuit court's
decision only referenced distributions made in 2000 and 2001, we
cannot say that the court considered evidence that was not before
it.
Additionally, LSA asserts that the circuit court erroneously
looked past the entity that actually incurred the expenses and
considered the wealth of its individual partners. However, even
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assuming that it was improper for the circuit court to consider
the wealth of LSA's partners, any such error would be
harmless. When considered in light of the remaining evidence
cited by the circuit court, we do not believe that the brief and
passing reference to the "wealthy" individual partners could have
affected the outcome of the court's decision. See Hadley v.
Snyder, 335 Ill. App. 3d 347, 351-52, 780 N.E.2d 316 (2002)
(finding an error which did not affect the outcome of the case to
be harmless).
In a related argument, LSA maintains that the circuit court
erred in considering Draper's assets in determining its nature or
character. Although the circuit court initially noted that LSA
and "its closely tied affiliate [Draper] are large entities with
substantial assets," all of the specific assets listed in the
circuit court's decision related to LSA, not Draper.
Accordingly, it does not appear that the circuit court actually
considered any of Draper's assets in making its decision
regarding LSA's nature or character.
LSA also asserts that, in determining its nature or
character, the circuit court: (1) "purported to rely" on the
fact that its net income was almost $1.9 million in 1996 and
almost $2.2 million in 1997, "without explaining why expenditures
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of 14% and 12% respectively" are not substantial; (2) referenced
the two large buildings it owned, "but failed to draw the obvious
conclusion that spending hundreds of thousands of dollars in cash
is even more significant to landowners with limited cash because
most of their assets [are] tied up in non-liquid holdings"; and
(3) "cited to the $6 million value of the subject property - but
did not explain why spending nearly 5% of that value (and over
22% of the purchase price when adjusted for inflation) is not
substantial." Though LSA has labeled these assertions as
"contrived and erroneous conclusions" of the circuit court, LSA
is, in fact, merely asking us to reweigh the evidence presented
in this case. As previously discussed, the circuit court was
required to weigh the evidence, and its inferences and
conclusions drawn therefrom will be disturbed on review only if
they are contrary to the manifest weight of the evidence.
Eychaner, 202 Ill. 2d at 251.
Based on the record before us, we are unable to conclude
that the circuit court's characterization of LSA as a large
entity with substantial profits and assets, which allowed it to
easily absorb the loss of $272,022.18, is against the manifest
weight of the evidence.
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Finally, LSA contends that the circuit court erred in
failing to take into account the cost of the property when
determining whether its expenditures were substantial. While the
purchase price of the property is a factor that may be considered
in determining substantiality (see Healey, 223 Ill. 2d at 627),
only those expenditures made in good-faith reliance on the prior
zoning classification are included in the substantiality
determination (see Ropiy, 363 Ill. App. 3d at 52-53). In this
case, the property at issue was purchased 26 years before RPD 196
was enacted. Because it is clear that the property was not
purchased in reliance on the RPD 196 zoning classification, the
purchase price was properly excluded from consideration in this
case.
Based on the totality of the circumstances, we cannot say
that the circuit court's finding that LSA's $272,022.18 in pre-
development expenditures was not sufficiently substantial to give
rise to a vested right to develop the property in accordance with
the RPD 196 zoning classification is contrary to the law or
against the manifest weight of the evidence. Absent proof of a
vested right, LSA was not entitled to a zoning certificate or
building permit under RPD 196. See Healey, 223 Ill. 2d at 628.
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Accordingly, the circuit court properly denied LSA's request for
a writ of mandamus.
For the foregoing reasons, we affirm the judgment of the
circuit court.
Affirmed.
THEIS and KARNEZIS, JJ., concur.
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