Daily Development for Tuesday, February 6, 2001

ZONING AND PLANNING; PARKING REQUIREMENTS: License agreement for offsite parking facilities will not satisfy municipal ordinance for planned manufacturing districts that requires of site parking facility to have same possession as zoned lot, either by deed or longterm lease.

North Avenue Properties v. Zoning Bd. of Appeals of Chicago, 726 N.E.2d 65 (Ill. App. Ct. 2000).

Owner of property located in a planned manufacturing district applied for zoning certifications that would allow that property to be used for retail sales. The owner included an application to use nearby property in a general manufacturing district as an accessory parking facility. This property was already a public parking lot. The zoning administrator denied both applications on the basis that the proposed uses for the properties did not conform to the Chicago Zoning Ordinance (the "Ordinance").

Owner then applied for zoning variations in the nature of special uses to permit the two properties to be used for the retail sales use and parking use, respectively. The Board granted this petition. Plaintiff, owner of a parcel of nearby real estate appealed the zoning board's approval of those applications, alleging, inter alia, that the Board erroneously had found that the zoning variations satisfied the Ordinance.

Plaintiff noted that the Chicago Zoning Ordinances provides that when parking requirements are to be satisfied on property other than that which is the subject of an application, "such facilities shall be in the same possession as the zoning lot occupied by the building or use to which the parking facilities are accessory. Such possession may be either by deed or long term lease. . . "

Using a de novo standard of review, the court nevertheless accepted on its face testimony that the agreement with the parking lot operator guaranteed the petitioner a set number of spaces. But the court concluded that the parking agreement was merely a license, not a lease, and thus did not, as a matter of law, comply with the Ordinance. The court stated that a lease is a definite agreement as to the extent and bounds of the property demised and transfers exclusive possession of that property to the lessee, while a license agreement merely entitles a party to use the premises for a specific purpose subject to the management and control of the owner.

The parking agreement here was not definite as to which parking spaces were being reserved. It merely made parking spaces available to the tenants, employees, invitees, and customers of the West North Avenue property on the same terms as other parking spaces are made available to the general public) and did not transfer possession of the parking spaces to the owner of the West North Avenue property. Therefore, it was merely a license.

The court further found that a license would not satisfy the Ordinance's express requirement that the property and the offsite parking facilities supporting that property be in the same possession. Reversed and remanded.

Comment 1: Characterization is everything in real estate, and we should be glad for it. Proper characterization (and the editor agrees with the characterization here) makes it possible for those having requirements to set them forth plainly and for those seeking to satisfy the requirements to understand what it is they must do.

There is a substantive difference between a right to share a parking lot, even with a guarantee that 34 spaces will always be available, and having a specific right to an identified 34 spaces. Certainly the parking lot operator would have charged much more to hold 34 spaces always open. One wonders, however, if the requirement could have been satisfied by leasing the designated spaces and then giving a license in those spaces back to the parking operator for use at times when the lessee's operations did not require them. This might have cost marginally more for the zoning applicant, but arguably would have satisfied the characterization problem.

Although the court says that the applicant had to have "possession," obviously possession through an agent is possession, and in the editor's view there is no inconsistency in having the lessor, as manager, hold possession as agent for the lessee. The court says as much when it admits that an identified guaranteed 34 spaces would have satisfied the requirement.

Comment 2: In the editor's experience, Illinois courts are a "tough review" for zoning authorities, particularly in the Chicago area. The court will give zoning decisions a good, hard look, and reversals are not that uncommon. But, as indicated, the court's review here was perfectly proper. As a matter of law, a "license" is not a "lease," and the issue of possession is the most significant differentiating factor between the two.

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