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Logan Square, Humboldt Park, Avondale

Judge Dismisses Developer’s Lawsuit That Challenged 606 Trail And Pilsen Demolition Surcharge Ordinance

The developer behind the lawsuit is planning to mount another legal challenge, his lawyer said. "We think the statute is clearly unconstitutional."

Development and homes along The 606 in Logan Square on Nov. 8, 2021, with the Chicago skyline looming above.
Colin Boyle/Block Club Chicago
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LOGAN SQUARE — A Cook County judge has thrown out a lawsuit filed by a Logan Square property owner and developer that challenged the city’s demolition surcharge ordinance, a policy tool meant to slow gentrification along The 606’s Bloomingdale Trail and in Pilsen.

Cook County Circuit Court Judge John J. Curry dismissed the lawsuit last week, writing that part of the suit lacked standing and the plaintiff, Stephen Brennan, failed to notify property owners of the suit. Under Illinois law, whenever a lawsuit challenges a zoning ordinance, the person filing the suit must notify all property owners within 250 feet of the suit.

The lawsuit argues the surcharge ordinance, which imposes fees on developers and others who demolish housing along The Bloomingdale Trail and in Pilsen, is unconstitutional and “unfairly taxes only a certain small portion of the residents of the City.”

Brennan filed the suit in March of 2021, the day after the demolition surcharge ordinance was approved in City Council.

Credit: Colin Boyle/Block Club Chicago
People run and walk along The 606 Trail in Logan Square on Nov. 8, 2021.

Brennan owns a home in the 3400 block of West Cortland Street. In court documents, he said the ordinance “negatively affects the property value of my home and all properties within the affected areas by imposing a tax on two areas of the City but not the vast majority of the City.”

But the judge ruled that Brennan’s argument lacks standing, according to court documents.

Brennan “cannot establish that he is in immediate danger of sustaining a direct injury as a result of the enactment of the ordinance. As such, he lacks standing to bring the last four counts of his Complaint, and they too shall be dismissed,” Curry wrote.

Brennan declined to comment on the dismissal, but his attorney, Larry Byrne of Pedersen & Houpt, said the suit was “very narrowly dismissed on a technicality” — failure to notify nearby property owners — and Brennan intends to re-file after sending out notifications.

“We think the statute is clearly unconstitutional,” Byrne said. “The goal is to make sure the people in the restricted district aren’t treated in a disparate manner from the rest of the city.”

The city, however, is “pleased with the court’s ruling,” city Law Department spokeswoman Kristen Cabanban said in an email.

The ordinance won City Council support this past spring after years of advocacy and debate.

Proponents of the legislation have said it will help slow gentrification around The Bloomingdale Trail and in Pilsen, areas that have seen skyrocketing home prices and displacement of longtime residents, many of them Latino. But opponents have argued the fees will penalize longtime residents and stymie economic growth.

Under the City Council-approved ordinance, developers who tear down single-family homes have to pay a fee of $15,000, while developers who raze larger, multi-unit buildings incur a fee of $5,000 per unit.

In Logan Square, Bucktown and West Humboldt Park, the ordinance applies to buildings zoned as RS3 and RS3.5 in the area bounded by Armitage Avenue, Western Avenue, North Avenue, Kedzie Avenue, Hirsch Street and Kostner Avenue. The ordinance also includes large swaths of Pilsen.

The fees go into the city’s Chicago Community Land Trust, an effort aimed at creating a pathway for homeownership for low- and moderate-income Chicagoans.

In the lawsuit, Brennan argues that the surcharge is a tax, not a fee. More broadly, he contends the tax “is not uniform and geared only to a small group of people,” using remarks from Alds. Carlos Ramirez-Rosa (35th), Daniel La Spata (1st) and Nicholas Sposato (38th) and other city officials to bolster his point.

“There is no real and substantial difference between the people taxed and not taxed, as reflected by the alderman comments, lack of information about other areas, and the lack of even basic information about the number of demolitions in the affected areas,” the lawsuit reads.

The ordinance is in effect until April of 2022.

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