Coronavirus Disease 2019 (COVID-19)

Eminent Domain

Can the State of Illinois Take Private Property Due to the COVID-19 Pandemic?

April 6, 2020

In the past month, the State of Illinois and local governments, like the City of Chicago, have issued executive orders in an attempt to slow the spread of the COVID-19 pandemic. On March 9, 2020, Illinois Governor J.B. Pritzker issued a statewide disaster proclamation, which activated emergency powers provided in the Illinois Emergency Management Agency Act, 20 ILCS 3305/1 et seq. As it relates to the acquisition of private property, Section 7 of this Act allows the Governor on behalf of the State of Illinois, “to take possession of and for a limited period occupy and use any real estate necessary to accomplish those objectives [of the Emergency Management Agency Act]; but only upon the undertaking by the State to pay just compensation,” and then only under the following procedures set forth in the Act, which include:

a. The Governor, simultaneously with the taking, must deliver to the owner a signed written statement that includes the name and address of the owner, the date and place of the taking, description of the property sufficient to identify it, a statement of interest in the property that is being so taken, and, if possible, a statement in writing, signed by the owner, setting forth the sum that he or she is willing to accept as just compensation for the property or use.

b. When the compensation to be paid for the taking or use of property or interest therein is not or cannot be determined and paid, a petition in the name of The People of the State of Illinois shall be promptly filed in the circuit court of the county where the property or any part thereof was located when initially taken or used under the provisions of this Act requesting that the amount of compensation to be paid to the person or persons interested therein be fixed and determined. The petition shall include a description of the property that has been taken, shall state the physical condition of the property when taken, shall name as defendants all interested parties, shall set forth the sum of money estimated to be just compensation for the property or interest therein taken or used. The litigation shall be handled by the Attorney General for and on behalf of the State of Illinois.

c. Just compensation for the taking or use of property or interest therein shall be promptly ascertained and established by judgment against the State, that shall include, as part of the just compensation so awarded, interest at the rate of 6% per year on the fair market value of the property or interest therein from the date of the taking or use to the date of the judgment.
20 ILCS 3305/7

Last week, Governor Pritzker announced that the previously closed Westlake Hospital located in Melrose Park, Illinois, would be reopened to treat COVID-19 patients. The owner of Westlake Hospital filed for Chapter 7 bankruptcy in August of 2019. Last week, the bankruptcy court granted a motion from the Illinois Emergency Management Agency granting Illinois control of the hospital despite the bankruptcy proceedings.

On April 3, 2020, Governor Pritzker, pursuant to the power to seize private property under Section 7(4)(a) of the Illinois Emergency Management Agency Act, acquired “sole and exclusive occupation and use” of the former Vibra Hospital located in Springfield, Illinois to use the previously closed hospital for future COVID-19 patients. To date, the Governor and the owner of the property have not agreed on the amount of just compensation due as a result of the temporary taking of the property. The amount of just compensation must be determined under Section 7(4)(b) of the Act. A copy of the Governor’s exercise of taking power is linked here.

In addition to the former Westlake and Vibra hospitals, the U.S. Army Corps of Engineers and the Illinois National Guard have set up a temporary hospital at McCormick Place in the City of Chicago, and are also setting up additional beds for COVID-19 patients at two other closed hospitals in the suburbs, which are the former Sherman Hospital in Elgin and the MetroSouth Medical Center in Blue Island.

Aside from these actions by Governor Pritzker, the City of Chicago was the first in the United States to put forth a plan to rent thousands of hotel rooms for patients diagnosed with COVID-19 or for temporary accommodations for health care workers. In addition to assisting with the fight against the COVID-19 pandemic, this plan allows for hotel owners to receive a revenue source when hotel occupancy is at an all-time low. Hotel owners have been volunteering to be a part of the City’s program. This creative approach by Chicago has thus far avoided any government takeover of any hotels in Illinois.

As time goes on, Governor Pritzker and the State of Illinois may seek to acquire more real estate to assist in the response to the COVID-19 pandemic. The attorneys at Ryan and Ryan are experienced eminent domain attorneys that can assist private property owners faced with any potential taking issues in Illinois related to the COVID-19 pandemic.

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