Sunnybrook, LP v. City of Alton

2021 IL App (5th) 190314-U

SUNNYBROOK, LP, Plaintiff-Appellee, v. THE CITY OF ALTON, ILLINOIS,an Illinois Municipal Corporation, Defendant-Appellant.

NO. 5-19-0314

APPELLATE COURT OF ILLINOIS FIFTH DISTRICT

April 28, 2021

NOTICE

Decision filed 04/28/21. The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.

NOTICE

This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

Appeal from the Circuit Court of Madison County.

No. 18-MR-884

Honorable David W. Dugan, Judge, presiding.

JUSTICE BARBERIS delivered the judgment of the court.

Justices Moore and Vaughan^* concurred in the judgment.

ORDER

¶ 1 Held: The circuit court's order is vacated where mandamus relief was incorrectly granted provided the requesting party had no clear right to the issuance of a building permit and the court's order was discretionary, not ministerial, in nature. Despite the erroneous mandamus order, the court's contempt order is affirmed.

¶ 2 Defendant, the City of Alton, Illinois (City), appeals the circuit court's June 5, 2019, order granting summary judgment in favor of plaintiff, Sunnybrook LP (Sunnybrook), as to count III of the amended complaint. Provided the court determinedthere was no genuine issue of material fact relative to count III (mandamus) of Sunnybrook's amended complaint, the court issued a writ of mandamus on June 5, 2019, directing the City to grant Sunnybrook the pending building permit application filed on November 16, 2018. When the City failed to comply, the court held the City in contempt of court on June 27, 2019. For the following reasons, we vacate the June 5, 2019, mandamus order and affirm the court's June 27, 2019, contempt order.¹

¶ 3 I. Background

¶ 4 Sunnybrook is the developer² of the "Community of Sunnybrook" (Sunnybrook Project), a proposed affordable housing development to be built in Alton, Illinois. The Sunnybrook Project is a multi-family housing development consisting of 10 multiple family structures totaling 40 leased units. A portion of the Sunnybrook Project would be financed through the Low-Income Housing Tax Credit (LIHTC) program, with 11 units subsidized by project-based vouchers. After a 15-year compliance period of leasing the units, as required by the LIHTC program, the units would be made available for sale.

¶ 5 On June 15, 2017, in support of the Sunnybrook Project, the City's former mayor, Brant Walker, executed a Memorandum of Understanding (MOU) with EBJJ, LLC, acorporation managed by Edward Hightower and partnering with Sunnybrook. The MOU confirmed that the Sunnybrook Project was a valid LIHTC project that included market-rate units for lease in an effort to promote economically diverse neighborhoods in Alton. The MOU also confirmed that existing tenants could purchase their unit with accrued annual credits at the completion of the 15-year LIHTC compliance period. Sunnybrook was not listed as a party to the MOU.

¶ 6 Also, on June 15, 2017, Walker sent a letter to the Illinois Housing Development Authority (IHDA) titled, "Letter of Support for The Community of Sunnybrook Alton IL," confirming that the Sunnybrook Project was "directly in line with Alton's growth and revitalization efforts," given it "addresses the need to connect neighborhoods to resources through existing transportation *** and will be key in our efforts to connect entry-level workforce with affordable housing and transportation." Greg Caffey, the City's zoning administrator, also sent a letter to IHDA confirming that the proposed site for the Sunnybrook Project met the City's R-4 multiple family zoning district requirements and that no special use permits were required under the Code of Ordinances for the City of Alton (Alton Code). Caffey sent the same letter to IHDA on January 31, 2018.

¶ 7 On February 23, 2018, Walker sent a letter to IDHA expressing the City's support for the Sunnybrook Project's request to receive Madison County HOME funds.

¶ 8 On May 14, 2018, IHDA approved the Sunnybrook Project's application for LIHTC funding. The following day, however, Walker withdrew the City's support of the Sunnybrook Project.

¶ 9 On May 17, 2018, Walker and other city officials expressed concern over the development, specifically, issues with density, building and site layout, parking and access. In response to the City's concerns, Sunnybrook agreed to modify the Sunnybrook Project, adding roughly $500,000 to the cost of the overall project in construction and development costs. Caffey recommended the design of the development be modified from duplexes to townhomes.

¶ 10 On May 31, 2018, in an effort to compromise, the Sunnybrook development team presented the proposed project modifications³ to a small number of individuals, including Walker, Caffey, two aldermen, the fire chief and police chief. At the conclusion of the meeting, an agreement was made that Sunnybrook would present the proposed modifications to a committee of aldermen on June 12, 2018.

¶ 11 On June 12, 2018, the Sunnybrook development team did not present the proposed modifications because the City's aldermen vocalized support for the Sunnybrook Project. The next day, however, Walker issued a press release statement publicly retracting support for the Sunnybrook Project, claiming he had been unaware that the units would be leased or subsidized by project-based vouchers.

¶ 12 On June 15, 2018, the City sent a letter to IHDA formally withdrawing support of the Sunnybrook Project. Specifically, Walker stated that the Sunnybrook Project "fails to adhere to the vision we have worked to implement for Alton's long-term growth andrevitalization." Walker claimed that the proposed development was not needed, given there was "NO shortage of affordable housing," and an additional residential rental development "would depress the value" of existing single-family homes and further decrease the City's revenue as a result of declining property values. (Emphasis in original.) Lastly, Walker requested IHDA to rescind its offer of $1.9 million in funding for the Sunnybrook Project.

¶ 13 On July 31, 2018, Ryan Morrissey, of Morrissey Construction Company, the contractor for the Sunnybrook Project, filed an initial building permit application with the City (first application). The application described the project as "new construction of (10) 4-plex townhomes comprising of 40 residential units and a community center." Hurford Architects, Inc., was listed as the architect, and a "To-be-formed Limited Partnership" was listed as the owner of the development. Sunnybrook was not named as a party to this application.

¶ 14 On August 21, 2018, the City issued a letter denying Sunnybrook's first application after a third-party engineering consultant, who had been hired by the City, had reviewed the first application. Specifically, the first application was denied for failure to submit a preliminary subdivision plat "to divide the property into sellable parcels" after leasing the units for 15 years. Morrissey was invited to correct the deficiencies and submit a new building permit application.

¶ 15 On September 24, 2018, in response to the City's denial letter, Sunnybrook sent a letter to Caffey acknowledging and expressing discontentment with the City's decision. In the written letter, Sunnybrook indicated that it would "consider any additionalmaterials submitted to be a supplement to the initial filing rather than a new application." Citing to Title 12-1-3 of the Alton Code (Alton City Ordinance No. 6104 (approved Dec. 18, 1996)), Sunnybrook asserted that there was no intention to sell or divide any land, thus, a preliminary subdivision plat was not required prior to construction.

¶ 16 On October 24, 2018, the City informed Sunnybrook that a new application, not a supplement to the first application, would be accepted if Sunnybrook wished to address the issues in the denial letter. The City asserted that "the subdivision requirements will have to be met" because "various individual housing units will be sold as separate properties in the future" and it anticipated "a division from the 11.08 acres to a tract of 6.5 acres."

¶ 17 In a response letter to the City, dated October 29, 2018, Sunnybrook claimed that the City had "disrupt[ed], interfere[d], and ultimate[ly] prevent[ed]" the development to move forward. As such, Sunnybrook requested the City to withdraw the demand for approval of a preliminary subdivision plat, or it would file litigation in federal court claiming a violation of the Fair Housing Act.⁴

¶ 18 On November 2, 2018, Morrissey filed a second building permit application with the City (second application).⁵ The second application, similar to the first, listed theowner as a "To-be-formed Limited Partnership." Sunnybrook was not named as a party to this application.

¶ 19 On November 5, 2018, while the second application was pending, Sunnybrook filed its initial complaint against the City in the circuit court, seeking declaratory judgment and preliminary injunctive relief (count I) and a temporary restraining order with notice (count II). Specifically, Sunnybrook alleged that it was unnecessary to file a preliminary subdivision plat, pursuant to Titles 12-2-1 and 12-1-3 of the City's Code (Alton City Ordinance No. 6104 (approved Dec. 18, 1996)), because Sunnybrook was not subdividing any land. Instead, Sunnybrook intended to build a multi-family housing rental development to lease 40 units for 15 years. After the 15-year compliance period required by LIHTC, Sunnybrook would then sell the units to tenants in good standing.

¶ 20 Shortly thereafter, on November 7, 2018, Hightower, in a signed affidavit, attested that without some determination by the circuit court regarding the filing of a preliminary subdivision plat, Sunnybrook would lose substantial funding from IHDA. Without IHDA funding, Hightower indicated that irreparable injury and...