Southwestern Illinois Development Authority v. National City Environmental, LLC

The Southwestern Illinois Development Authority (development authority) (plaintiff) was created by the Illinois legislature for the purpose of promoting commercial projects like cultural facilities, which included racetracks and parking facilities. The development authority was empowered to acquire property by condemnation. Gateway International Motorsports Corporation (Gateway) developed a successful racetrack with the assistance of the development authority. The racetrack was located next to land owned by National City Environmental, LLC and the St. Louis Auto Shredding Company (collectively, National City) (defendants). Gateway sought to purchase land from National City, but National City desired to keep the land for future expansion of its metal-recycling operation, so it rebuffed all attempts from Gateway to purchase its land. Gateway wanted the land so it could expand its operations and provide more parking for future customers. As a result, Gateway enlisted the development authority to use its eminent-domain powers to acquire National City’s land through condemnation. The development authority found that the condemnation and taking of National City’s property would serve a public purpose through the fostering of economic development and the promotion of public safety. The expansion of the racetrack’s operations would increase tax revenue and the parking lot would provide safer parking for customers although Gateway could have built a parking garage on its own land to meet its needs. Notably, the development authority had not conducted any study of the traffic situation at the racetrack, nor had it formulated an economic plan for development that indicated that the taking of National City’s private property was part of a larger economic-development planning process. The circuit court held a condemnation hearing and found that the taking of National City’s property to transfer to Gateway served a public purpose. National City appealed, and the appellate court reversed the circuit court’s judgment. The development authority appealed to the Illinois Supreme Court.