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able and feasible alternative use,"
<br />the court observed that the owners'
<br />own proposal, "which they advance
<br />as the only reasonable use, also
<br />calls for the sale of the property."
<br />Probing this issue further, the court
<br />made the following observations:
<br />If both buildings were sold as sin-
<br />gle-family homes or consulates, ICS
<br />would have to move elsewhere. But
<br />in that vein, the question becomes
<br />whether the economic hardship ex-
<br />ception depends on the property
<br />owner's ability to have a particular
<br />use it wants, as opposed to another
<br />use that is still reasonable. The Land-
<br />marks Ordinance provides that eco-
<br />nomic hardship exceptions are grant-
<br />ed "on the basis that the denial of a
<br />permit will result from the property."
<br />It does not state that a "reasonable"
<br />or "beneficial" use must be one that
<br />is suited to the desires of the particu-
<br />lar owner. If the buildings still may
<br />be used as single-family homes or a
<br />consulate despite the denial of the
<br />demolition permits, "all reasonable
<br />and beneficial use" of the buildings
<br />has not been lost.
<br />(Citations omitted.)
<br />Lastly, the court determine
<br />that the Landmarks Commission
<br />finding that the owners had ignore
<br />or failed adequately to explore p
<br />tentially viable sources of funds t
<br />allow the continued use of the pr
<br />perry was not against the manife
<br />weight of the evidence. Rejectin
<br />the owners' argument that th
<br />funding sources identified by t
<br />Commission were too speculativ
<br />the court cited several examples
<br />viable funding alternatives ident
<br />fied by the Commission whi
<br />supported its determination.
<br />Economic Return. Turning
<br />the second basis for denying t
<br />owners' application for an econo
<br />is hardship exception, the cou
<br />determined that the Commission
<br />conclusion that the owners were
<br />not deprived of "all reasonable and
<br />beneficial economic return" from
<br />the property was not against the
<br />manifest weight of the evidence.
<br />Rejecting the owners' argument
<br />that the Commission had erred in
<br />finding that the contract between
<br />ICS and Robin to redevelop the
<br />Blair and Countiss Houses was not
<br />the controlling factor, the court
<br />observed that "the Commission's
<br />rules specifically provide that eco-
<br />nomic hardship is not established
<br />solely by proof of an actual loss or
<br />a lost opportunity to gain increased
<br />return from the property." Accord-
<br />ing to the court, this argument
<br />"ignores the fact that the contract
<br />is void unless the city grants the
<br />Y permits necessary to allow the re-
<br />development to go forward." The
<br />court thus concluded that the Com-
<br />mission had properly considered
<br />the buildings' appraised value as
<br />single-family homes, and that sub-
<br />stantial evidence supported "the
<br />Commission's decision that a rea-
<br />d sonable economic return was possi-
<br />s ble through the sale of the build -
<br />d ings."
<br />o- The court similarly ruled that
<br />o the Commission's determination
<br />o- that the contract did not establish
<br />st a value for the properties was not
<br />g against the weight of the evidence.
<br />e The court observed that "liln light
<br />he of (the expert's appraisal and testi-
<br />e, mony] that the Robin contract was
<br />of highly speculative under current
<br />i- market conditions, plaintiffs have
<br />ch not established that the Commis-
<br />sion went against the manifest
<br />to weight of the evidence when it
<br />he found that the contract did not
<br />m- establish the value of the property."
<br />rt The court specifically addressed
<br />'s the relevance of the U.S. Supreme
<br />Court's decision upholding the
<br />New York City preservation ordi-
<br />nance against a takings challenge in
<br />Penn Central Transportation Co. v.
<br />City of New York, 438 U.S. 104
<br />(1978). The court rejected the own-
<br />ers' allegation that the Landmarks
<br />Commission had wrongly applied
<br />Penn Central in this particular
<br />case.
<br />Even if the Commission's rules do
<br />not call for economic hardship excep-
<br />tions to be considered in terms of the
<br />legal issues that arise in a takings
<br />context, there is nothing to prevent
<br />? the Commission from drawing upon
<br />the common law of takings as a part
<br />of its thoughtful consideration of
<br />whether the landmark designation
<br />and permit review process is treating
<br />the landowner with fundamental
<br />fairness.
<br />Concluding that the manifest
<br />weight of the evidence supported
<br />the Commission's finding that sev-
<br />eral other reasonable and feasible
<br />alternatives exist that would allow
<br />the owners to realize a reasonable
<br />return on the ICS property, the
<br />court stated that it could not "re -
<br />weigh" the testimony or "re-evalu-
<br />ate" the credibility of the witnesses
<br />relied upon by the Commission
<br />making its determination on this
<br />issue.
<br />Analysis
<br />The district court's decision in
<br />International College of Surgeons
<br />v. City of Chicago, provides useful
<br />analysis on a wide range of consti-
<br />tutional issues in the context of a
<br />well-written and adroitly applied
<br />ordinance. The court's deference to
<br />the Chicago Landmarks Commis-
<br />sion's determinations reflects high-
<br />ly on the careful manner in which
<br />the Commission and its staff ad-
<br />dressed the issues in this case.
<br />In addressing each of the own-
<br />ers' constitutional and administra-
<br />tive claims, judge Grady touched
<br />upon several issues important to
<br />preservation efforts but rarely ad-
<br />dressed in caselaw, including the
<br />ability of a preservation commis-
<br />sion to retain its own expert wit-
<br />nesses in considering an economic
<br />hardship claim, and the distinction
<br />between an owner's unwillingness
<br />and his or her inability to maintain
<br />property as a factor in considering
<br />a request for an economic hardship
<br />exception. Among other things, the
<br />court underscored that economic
<br />hardship is not established solely
<br />by proof of an actual loss or lost
<br />opportunity, and that it is proper to
<br />consider "poor stewardship" in eval-
<br />uating a hardship claim. According
<br />to the court, alleged economic
<br />hardship may result more from an
<br />owner's conscious decision not to
<br />maintain a building rather than any
<br />particular action of a commission
<br />to protect that resource pursuant to
<br />a preservation ordinance.
<br />lRichard J. Brennan, Esq., of Win-
<br />ston & Strawn and Daniel L. Houli-
<br />han, Esq., bath in Chicago, repre-
<br />sented the International College of
<br />Surgeons and Robin Construction
<br />Corporation. Kelly Raymond
<br />Welsh, Esq., Sheila A. Owens, Esq.,
<br />Ruth M. Moscowitz, Esq., and
<br />Craig J. Hanson, Esq., of the Chica-
<br />go Corporation Counsel represented
<br />the City of Chicago, the Commis-
<br />sion on Chicago Landmarks, and its
<br />individual members. Thomas J.
<br />Murphy, Esq., and James Michael
<br />Scanlon, Esq., both in Chicago,
<br />represented the North State, Astor,
<br />Lake Shore Drive Association.}
<br />14 PLR 1094 Preservation Law Reporter May 1995 May 1995 Preservation Lain Reporter 14 PLR 1095
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