A state appeals panel has shut down a challenge to the village of Mettawa's annexation of the corporate headquarters of industrial supply distribution giant Grainger, saying neighboring property owners' constitutional rights weren't violated by the village's decision to rewrite its zoning rules to allow the annexation and to lasso the resulting big bump in tax collections.
Thomas and Franziska Lys, who are homeowners in Mettawa, sued the village, Chicago Title Land Trust and W.W. Grainger, alleging violations of due process and the village’s zoning ordinances. Lake County Circuit Judge Janelle K. Christensen granted partial summary judgment in favor of the village and Grainger. The Lyses appealed, but the panel of the Illinois Second District Appellate Court affirmed the lower court's judgment.
The case concerned land that, through development, would become the headquarters of a Fortune 500 international industrial supply company. In 1994, Grainger purchased 525 acres in unincorporated Lake County, just west of the intersection of Illinois Route 60 and Interstate 294. In 1998, Grainger sought permission to rezone and develop the property. Lake County then passed an ordinance granting the request, but limited Grainger to 1.5 million square feet of office space.
The village annexed the Grainger property in 2018, and then passed Ordinance 839, which allowed Grainger to rezone the property to a new designation for office-hotel district. The village and Grainger have both stressed that the rezoning does not allow Grainger to add any buildings, as they assert the property remains subject to the same restrictions as it was under the prior Lake County zoning.
The Lyses, however, challenged the ordinance, saying the annexation and rezoning violated their constitutional rights. The lawsuit asserts the village denied them due process under Mettawa's village code, because they claimed the village ignored their claims Grainger's existing development violated village code and infringed on their property rights.
The village and Grainger argued that because no future development is contemplated at the Grainger facility, the Lyses suffered no actual injury and lacked standing to challenge the ordinance.
That argument missed the mark, the panel found.
“The Lyses complaint, to be fair, is largely a collection of repeated assertions about the ‘unsightly appearance’ of the Grainger campus, ‘increased light pollution’ emanating from the Grainger property, complaints of ‘increased traffic,’ and ‘the intrusive visual effect produced by [the] development of one or more new 90-foot-tall office buildings.’” Hutchinson wrote. “Were that all, then defendants’ standing challenge would be on more solid ground, but the Lyses do allege constitutional violations, and that is not something a court can or should easily overlook.”
The Lyses’s amended complaint estimates that under Ordinance 839 their property value will be impaired by “several hundreds of thousands of dollars,” but this evidence-free assertion is not dispositive, the panel said.
The Lyses allege the Village violated their due-process rights in approving Grainger’s rezoning and adopting Ordinance 839.
The panel, however, agreed Ordinance 839 had a valid, rational, constitutional basis.
The Lyses short-circuited their own procedural due process claim, the panel said. The record shows they were given notice and opportunity to be heard on the rezoning of Grainger’s property. When it comes to their procedural rights, that was all the state and federal constitutions required, the justices said.
The Lyses contended, however, there was a finer point to their procedural argument. As part of their “contract zoning” claim, they alleged the village and Grainger entered into a secret agreement, and the Lyses were not given notice regarding the supposed conditions and uses not addressed publicly.
Like the trial court, the panel determined the Lyses failed to allege sufficient facts to support their claim, that their claim misunderstands the concept of contract zoning, and their claim was flatly contradicted by the record. This was not a case of illegal secret contract zoning, but rather an example of valid conditional zoning after a public hearing.
“That Grainger and the Village may have been working together in this public process is unremarkable; this happens all the time in the modern era of zoning,” Hutchinson wrote. “Evidence of cooperation in this public process suggests responsible supervision of the utilization of the land by both the Village and Grainger, rather than any sort of illegal collusion.”
Instead of pointing to a collateral agreement, however, the Lyses suggest that Ordinance 839 grants Grainger the unlimited right to continue to develop its property—that is, to add 650,000 square feet of floor space and construct a building no taller than 90 feet—without seeking further approval from the Village. That argument is spurious, the panel found.
The Lyses assert this language entitles Grainger to “automatic approval” of any future development plans consistent with those variances. The panel disagreed and determined, as Grainger asserts, that the ordinance requires a public hearing and village approval when Grainger submits further development request.
The panel found that, throughout the annexation and re-zoning of Grainger’s property, the village acted with respect for its land-use process and for the integrity of its comprehensive development plan.
The panel rejected the Lyses contentions and affirmed the Lake County court judgment on two counts. The case was remanded to the trial court for further proceedings on a third count, which remains unresolved.