Friends of the Parks v. Chicago Park District
2016 WL 427565, 2016 U.S. Dist. LEXIS 13187, 160 F. Supp. 3d 1060 (2016)
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Rule of Law:
A long-term ground lease of public trust land to a private entity, even without an outright transfer of fee simple title, can constitute an impermissible relinquishment of state control, violate the public trust doctrine, and implicate due process rights if specific legislative authorization for such a transfer is lacking and the public interest is substantially impaired.
Facts:
- In May 2014, a task force appointed by Chicago Mayor Rahm Emanuel issued a report recommending the parking lots south of Soldier Field as the site for constructing the Lucas Museum of Narrative Art (LMNA).
- On or about September 8, 2014, the Chicago Park District entered into a memorandum of understanding (MOU) with the LMNA, outlining terms for the museum's construction, use, and operation.
- On April 23, 2015, the Illinois General Assembly amended the Park District Aquarium and Museum Act to authorize cities and park districts to permit corporations to erect and operate aquariums or museums within public parks, including those on formerly submerged land.
- On October 14, 2015, the Park District and LMNA entered into a Ground Lease for a 99-year term, with two 99-year renewal options, allowing LMNA to construct and control the Museum on the Project Area, which consists entirely of land recovered from Lake Michigan.
- The Ground Lease stipulates that LMNA assumes full responsibility and exclusive control over the construction, maintenance, and operation of the building, which it will own during the lease term, with the interest in the property conveyed for ten dollars, while the Park District retains fee simple title to the land.
- On October 14, 2015, the Chicago Plan Commission approved the Museum, and on October 28, 2015, the City Council approved a zoning amendment for the Project Area.
Procedural Posture:
- On November 13, 2014, Plaintiffs Friends of the Parks, Sylvia Mann, and John Buenz initiated an action against Defendants Chicago Park District and the City of Chicago.
- Defendants filed a Motion to Dismiss the Complaint.
- On March 12, 2015, the district court denied the motion to dismiss in part and granted it in part.
- On October 2, 2015, Plaintiffs filed a First Amended Complaint (FAC) after the Illinois General Assembly amended the Museum Act and new agreements were entered into.
- Defendants subsequently moved to dismiss the First Amended Complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.
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Issue:
Does a long-term ground lease by a park district to a private entity for the construction and exclusive operation of a museum on land recovered from a navigable lake, purportedly authorized by a general amendment to a museum act, plausibly violate the Public Trust Doctrine, constitute an ultra vires act, or deprive taxpayers of due process, thereby surviving a motion to dismiss?
Opinions:
Majority - John W. Darrah
Yes, a long-term ground lease by a park district to a private entity for the construction and exclusive operation of a museum on land recovered from a navigable lake, purportedly authorized by a general amendment to a museum act, can plausibly violate the Public Trust Doctrine, constitute an ultra vires act, and deprive taxpayers of due process, thus surviving a motion to dismiss. Regarding the Due Process claim (Count I), the court affirmed that Illinois taxpayers have a constitutionally protected beneficial interest in public trust property, citing Paepcke v. Public Bldg. Comm’m of Chicago. Plaintiffs sufficiently alleged that the General Assembly's amendment to the Museum Act did not provide specific approval for the transfer of control over the specific land, thereby potentially depriving them of their interest without due process. For the Ultra Vires claim (Count II), the court reasoned that the Illinois General Assembly cannot delegate its essential legislative power, only the authority to execute it. Plaintiffs plausibly argued that the amended Museum Act, a general authorization for leases to museums in parks, was not a sufficiently specific grant of authority for the Park District to transfer significant control over unique public trust land (formerly submerged lakebed) to a private entity. The disposition of such land requires explicit legislative action, not general delegation. Concerning the Public Trust claim (Count III), the court emphasized that the State holds title to submerged land in trust for its people and cannot abdicate control over such property, especially if it leaves the land 'entirely under the use and control of private parties' or substantially impairs public interest, as established in Illinois Cent. R. Co. v. State of Illinois. While the Park District claimed it only conveyed leasehold rights, the court noted that a 99-year lease with renewal options, where the private entity owns the improvements and has exclusive control, is effectively a surrender of control, implicating the public trust. The court distinguished this case from Friends of Parks v. Chicago Park Dist., where the Park District retained ownership and control of Soldier Field. Drawing on Lake Michigan Fed’n v. U.S. Army Corps of Engineers, the court highlighted that it must be critical of state attempts to surrender public resources to private entities and invalidate grants whose primary purpose benefits private interests. Plaintiffs plausibly alleged that the proposed museum would primarily benefit the LMNA and private interests, not the public, and that the long-term lease amounted to an abdication of state control.
Analysis:
This case significantly reinforces the robust nature of the public trust doctrine in Illinois, particularly its application to formerly submerged lands. The ruling clarifies that even long-term leases, not just outright conveyances of title, can be scrutinized as potential impermissible relinquishments of state control over public trust resources. It underscores the critical requirement for highly specific and explicit legislative authorization for any substantial transfer of control over public trust lands, cautioning against reliance on general statutory amendments. This decision serves as a judicial check on governmental actions concerning public parklands, especially those along Lake Michigan, ensuring that the public interest remains paramount and is not substantially compromised for private gain.
