Archive for December 2014

AFFORDABLE HOUSING: CHANGE ON THE HORIZON IN CHICAGO?

December 31, 2014

The City of Chicago is considering amending its Affordable Housing Ordinance to bolster the requirement for developers to include affordable market-rate units in new residential developments or face stiffer financial consequences for failure to meet those requirements. Not surprisingly, the proposed amendment has met with a vocal response from both residential developers and affordable housing advocates.
Under the current Affordable Housing Ordinance, builders in Chicago can either set aside 10% of the units in new structures at below-market rates or pay $100,000 per required unit into a city fund. According to published media reports, many developers have simply chosen to pay the amounts into the city fund. The proposed changes to the Affordable Housing Ordinance would create different requirements depending upon where in the city new residential developments are to be constructed. Under the proposed changes, developers can no longer simply pay the fee to avoid meeting the 10% affordable housing requirement. Instead, in downtown Chicago or other high-income areas, residential developers must build at least 25% of the required affordable units in the proposed development or within a one-mile radius of that development. The other 75% of the required affordable units could be avoided by developers paying opt-out fees of $175,000 for downtown units and $125,000 per unit in other high-income areas – a significant increase from the current $100,000 per unit opt-out fee. In other areas of the city designated as low-to-moderate income, the opt-out fee would be $50,000 per unit. For condominium or townhome developers, a slightly different scheme would apply. Condominium and townhome developers could opt out of all affordable units for downtown projects but the fees could be as high as $225,000 per unit. Mayor Rahm Emanuel has publicly expressed his support for the initiative and published sources, including Crain’s Chicago Business, have stated that the change could generate as much as $100 million in housing funds and add 1,200 units of affordable housing over a five-year period.
Supporters and opponents have voiced their views over the proposed changes. Real estate developers worry that more aggressive affordable housing requirements could make projects harder to finance. Affordable housing advocates believe that the changes are needed because not enough affordable units have actually been generated under the existing ordinance, especially in gentrifying areas where developers simply pay the fee. On the other hand, some housing advocates have expressed concern about the proposed changes, concerned that they do not go far enough or are misdirected in addressing the shortage of affordable housing.

This Blog is made available by Laurie & Brennan, LLP for general educational purposes only. The purpose of the Blog is not to provide specific legal advice on any particular matter. By using this Blog site you understand that there is no attorney client relationship between you and this firm and the authors or members of the firm. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Under rules applicable to the professional conduct of attorneys in various jurisdictions, the material on this Blog may be considered advertising material.

 

Claims for Payment Against Illinois Capital Development Board Must Be Brought in Court of Claims and Illinois Prompt Payment Act Found Not Applicable

December 4, 2014

In R.L. Vollintine Construction, Inc. v. The Illinois Capital Development Board, 2014 IL App (4th) 130824 (October 29, 2014), the Illinois Appellate Court found that a contractor’s claim against the Illinois Capital Development Board  (“CDB”) must be brought in the Illinois Court of Claims and that the Illinois Prompt Payment Act was not implicated under the facts of the case.  The disputes in the case arose from a contract between R.L. Vollintine Construction Inc. (“Plaintiff” or “Vollintine”) and the CDB that was entered into in September, 2011 for renovation work at the state capitol building.  During the course of the project, there was pipe failure that led to significant water damage.  CDB asserted that the water leak occurred as a direct result of Vollintine’s work.  Accordingly, CDB made a claim against Vollintine to recoup the costs necessary to remedy damages associated with the pipe failure.

While that claim was still pending the CDB issued, on January 11, 2012, to Vollintine a “certificate of substantial completion,” which documented that the work was substantially completed on August 15, 2011.  Later in 2012, the Illinois Attorney General (“AG”) sent Vollintine a letter contending that Vollintine was responsible for the water damage.  Further, the AG informed Vollintine that the provisions of the parties’ construction contract allowed CDB to determine its final amount of damages and withhold such amount from payment.  CDB sent a final letter to Vollintine regarding the total amount paid for water damages.  Vollintine nonetheless sought payment for its performance.  CDB refused to pay because of the pending resolution of its water damage claim.

Vollintine then filed a petition for writ of mandamus under article 14 of the Illinois Code of Civil Procedure, requesting that the court order CDB to submit to the State Comptroller the invoices Vollintine tendered for the contractual work it completed and CDB approved.  Vollintine also requested statutory interest allowed under the Illinois Prompt Payment Act (“Payment Act”).  CDB filed a motion to dismiss.  CDB contended that (1) the trial court lacked jurisdiction to consider Vollintine’s mandamus claim because the Court of Claims Act (“Claims Act’) granted the Court of Claims exclusive jurisdiction over “[a]ll claims against the State founded upon any contract entered into with the State”, (2) Vollintine failed to state a cause of action for mandamus relief, (3) a writ of mandamus is an inappropriate remedy, and (4) the Payment Act does not apply.  CDB’s motion to dismiss was granted. Vollintine appealed and the Appellate Court affirmed the trial court’s decision.

The Appellate Court first looked to the State Lawsuit Immunity Act (“Immunity Act”), which provides that “[e]xcept as provided in the Claims Act the State of Illinois shall not be made a defendant or party in any court.”   The Claims Act creates an exception to the doctrine of sovereign immunity under the Immunity Act by permitting parties to raise monetary claims against the state in the Court of Claims.  Vollintine argued that the trial court erroneously determined that the Court of Claims had exclusive subject-matter jurisdiction because the Payment Act creates “a mandatory process by which a State vendor is ensured that the state promptly processes its payment request or pay the vendor an interest penalty” for failure to do so.  CDB’s issuance of the certificate of substantial completion “triggered” CDB’s duty under the Payment Act to review and act upon the submitted invoices it tendered.  Therefore, Vollintine claimed that the trial court’s dismissal of its petition for writ of mandamus was erroneous because “[a] suit against state officials which seeks to compel them to perform their duty is not held to be a suit against the state even though the duty to be performed arises under a certain statute, and the payment of state funds may be compelled.”

The Appellate Court rejected the notion that CDB’s issuance of a certificate of substantial completion created any duty under the Payment Act.  In fact, the plain language of the certificate of substantial completion that CDB issued to Vollintine in January 2012 conveyed that as of August 15, 2011, Vollintine was released from certain contractual obligations related to utilities and insurance, but remained responsible for items identified as requiring completion or correction, as well as maintaining “other required insurance.”   The certificate of substantial completion did not address payment or the Payment Act, but rather provided additional guidance regarding obligations both parties had toward issuance of a certificate of final completion.  The Payment Act neither imposes a nondiscretionary duty upon CDB nor any State agency to process payment vouchers promptly, instead it confirms the procedure that the Court of Claims must follow if it determines that claimants are due payments from State agencies.  See 30 ILCS 540/3-1 (West 2012).

This Blog is made available by Laurie & Brennan, LLP for general educational purposes only. The purpose of the Blog is not to provide specific legal advice on any particular matter. By using this Blog site you understand that there is no attorney client relationship between you and this firm and the authors or members of the firm. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Under rules applicable to the professional conduct of attorneys in various jurisdictions, the material on this Blog may be considered advertising material.


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