Posted by: Patricia Salkin | July 24, 2008

Exclusion of Church from Tax Increment Financing District May Violate RLUIPA’s Equal Terms Provision Depending Upon the Facts, Nonetheless Injunction Request Denied

In denying the Church’s request for a preliminary injunction preventing the Village from enforcing certain provisions of its zoning ordinance because of alleged violations of the Equal Terms provision of the Religious Land Use and Institutionalized Persons Act (RLUIPA), the federal District Court for the Northern District of Illinois noted that the 7th Circuit has not had the opportunity to discuss an Equal Terms case on the basis of a fully developed record.

The Church, consisting of approximately 67 congregants, had been leasing shared space on a month-to-month basis, but desired to find and purchase larger space to accommodate an intended expansion of its ministry activities to include a literacy program, mentoring program for young men, a bookstore, and assistance for start-up businesses.  The Village had adopted a Tax Increment Financing (TIF) plan and designated an area as a TIF District in 2001 for the purpose of attracting and developing to the area businesses that support its comprehensive plan vision for “transit-oriented development.”  In 2007, the Church purchased property in the B-2 area of the TIF District although the Village Zoning Ordinance did not permit churches in that zoning district because the area was reserved for commercial development. Additionally, the zoning ordinance bans the granting of liquor licenses to businesses within 100 feet of a church. The Church knew about the TIF, but apparently received bad legal advice and erroneously believed they could apply for a special use permit.  In April 2008 the Village amended its zoning ordinance, removing the opportunity for special use permits for art galleries and museums, day-care centers, schools, libraries, recreational buildings and community centers. The church’s request for a permit was denied and they initiated litigation seeking an order enjoining the enforcement of the zoning and alleging that the ordinance violated the First and Fourteenth Amendments to the U.S. Constitution and RLUIPA.  They also sought monetary damages.

With a split in the circuits on the test for evaluating an alleged Equal Terms violation, the District Court concluded that the 7th Circuit, which has not yet spoken on this issue, is likely to follow the four-part strict scrutiny test adopted by the 11th Circuit ((1) the plaintiff must be a religious assembly or institution, (2) subject to a land use regulation, that (3) treats the religious assembly on less than equal terms, with (4) a nonreligious assembly or institution.” See, Primera Iglesia Bautista Hispana of Boca Raton, Inc., 450 F.3d at 1299-1300) as opposed to the test set forth by the 3rd Circuit (a five-part test – requiring plaintiff show “(1) it is a religious assembly or institution, (2) subject to a land use regulation, which regulation (3) treats the religious assembly on less than equal terms with (4) a nonreligious assembly or institution (5) that causes no lesser harm to the interests the regulation seeks to advance.”)  

The District Court then turned to the question of defining the terms “assembly or institution” since they are not defined in the RLUIPA and the 7th Circuit has not yet defined them. The Court concluded that the Church has a “slight likelihood of showing that day-care centers and gymnasiums are ‘assemblies’ and therefore prevailing on its claim that the Amended Ordinance violates RLUIPA pursuant to the four-part Primeria Iglesia test.”

To determine whether the Church has a likelihood of success on its claim that the Village’s exclusion of churches in the zoning district (e.g., whether this would survive strict scrutiny), the Court considered the Village’s argument that the protective zone, where no liquor license can be granted to an establishment within 100 feet of a Church, would have a devastating effect on the ability of the TIF District to attract the kinds of businesses it needs. In essence, the Village argued that the TIF District is a narrowly tailored means of achieving the compelling interest of revitalizing the community.  In distinguishing this case from the 7th Circuit’s decision in Digrugilliers v. Consolidated City of Indianapolis, the  Village argued that the very purpose of the TIF will be thwarted by an exception to the zoning ordinance since the Church’s protective zone would inhibit the types of businesses that the transit-oriented plan was designed to attract. The Court concluded that the question of whether the TIF takes the existence of the protective zone outside of the holding in Digrugiliers is an fact specific inquiry that cannot be done until the record is fully developed, however, the Court said that the Village faces an “uphill battle” to prevail under the strict scrutiny standard.

Ultimately, the District Court concluded that although the Church has shown a slight likelihood of success on the merits, that it has no adequate remedy at law, and that it would suffer irreparable harm if the preliminary injunction is denied, the public interest appears to be equally balanced between granting and denying the injunction. Therefore, since the Church has only a slight likelihood of success on the merits, and because the Church failed to demonstrate that the balance of harms strongly favored their position, the Church’s motion for a preliminary injunction was denied.

River of Life Kingdom Ministries v. Village of Hazel Creek, 2008 U.S. Dist. LEXIS 53491 (N.D. Ill 7/14/2008 ). The opinion is not yet posted on a “free” site and it is not available on Westlaw. 

Thanks to Dwight Merriam, Esq. of Robinson & Cole for alerting me to this case.

Attorney James Lawlor informed me that on 7/22/08 the church filed an emergency appeal with the 7th Circuit.  Stay tuned. 

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