October 20, 2021

Fox River Grove moving forward with downtown eminent domain plans

TIF district property subject to eminent domain, lawyers say

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The village of Fox River Grove plans to begin acquiring 10 downtown properties via eminent domain within the next couple of weeks, village administrator Derek Soderholm said.

The Village Board voted to begin the process at its Sept. 6 meeting, and it is expected that condemnation documents will be filed with the court in the next several weeks. Eminent domain is a way for municipalities to take control of private property for public use.

Property owners have expressed frustration with the decision. They argue that the village has not offered enough money to buy the buildings, which are located on a block bordered by Route 14, Illinois Street, Lincoln Avenue and Opatrny Drive across the street from the Metra station.

Crystal Lake-based lawyer David McArdle said villages that want to use eminent domain have to establish a public purpose to move forward.

“The ultimate question is: Is it a proper public purpose?” McArdle said. “That is the issue, and that is what they will fight about. ... The courts will decide whether that is an appropriate public purpose.”

The court also must decide what the village should pay property owners for the buildings.

McArdle is part of the law firm Zukowski, Rogers, Flood & McArdle, and he serves as the city attorney for multiple municipalities, including the cities of McHenry and Marengo.

The state of Illinois frequently uses eminent domain to create easements or public roads, but it is less common for McHenry County municipalities, McArdle said.

“I don’t know the last time I filed condemnation for a city or village,” he said.

Soderholm said the public purpose is economic development.

The village has spoken to interested developers, but it does not yet know who ultimately would develop the property or whether it will go through a request for proposal process, Soderholm said.

Carl Gigante, an eminent domain lawyer with Chicago-based Figliulo & Silverman P.C., said because the subject property is in a tax increment financing district, there is precedent for the village to take over.

“The downtown area they are trying to develop has already been deemed blighted,” he said. “There is a whole slew of standards that could apply. ... A blight is not that difficult to establish under Illinois law.”

All properties in a TIF district are subject to condemnation for development, but the municipality must have an agreement in place before moving forward in the condemnation process, Gigante said.

“One of the things you have to establish as a village is that you have entered into an express contract with a private person who agrees to undertake the development project in the blighted area,” Gigante said.

Property owners have a right to fight the municipality every step of the way, but it’s an expensive process that will drag out litigation, he said.

At least one Fox River Grove business plans to avail itself of that opportunity.

New China Restaurant, apartments and an office front are the only occupied units on the block. William Gee owns New China, which has operated since 1975. He said he is working with a lawyer to retain ownership of the property at 308 Route 14.

“They can’t just come in and close my viable business,” Gee said. “I don’t know how they are going to get away with this without having a development plan.”

He said he is disappointed to be in this position after doing business with the village for so long.

“We supported the village,” Gee said. “We have brought in revenue, and this is what we get in return.”

Tony Guerrero operates an office front for Mir Enterprises, which does home construction. Zia Mir is the property owner and owns three other parcels on the block.

Guerrero, who lives in Fox River Grove, said his main concern about the plan is as a resident.

“If they take over, I see it being worse for the village as far as taxes go,” he said. “Someone has to pay for it.”

Soderholm said the village will use TIF funding to execute the plan. The village has two TIF districts and can use revenue from either to pay, he said.

The two districts are expected to generate $572,680 this year, according to the village’s fiscal 2019 budget.