Village moves to seize popular Chinese restaurant for nonexistent developers
Chicago suburb failed once, but is trying again to redevelop its downtown and displace a business popular for more than 40 years. Without a developer, they only can hope that if they rebuild it, someone will come.
The New China restaurant has served Fox River Grove residents since 1975, when William Gee’s parents brought their business to the northwest Chicago suburb.
“Good times, hard times, we went through it all,” Gee said. “Everybody’s brother and sister has worked for us locally. For most of them, it’s their first job.”
When a fire hit New China in 2013 and contractor issues drained funding for repairs, the people of Fox River Grove rallied around the restaurant and raised enough money to put Gee back in business.
He was happy to open his doors again in September 2014. Gee fondly remembers moving 120 pounds of chicken a day during the next three months. If the chicken was any sign, the residents were just as happy as he was.
Today, he’s back in the fire.
Through the power of eminent domain, Fox River Grove village leaders hope to level Gee’s block and repurpose it into some kind of commercial or mixed-use space. No developers are currently vying for the project, so plans could change.
There is no established timeline for acquiring the 10 properties on the block, but the village wants to get things moving sooner than later.
Gee met with village administrator Derek Soderholm and village president Robert Nunamaker in July.
“They wrote a number on a piece of paper: $332,000,” Gee said. “I was like, ‘What?’ They said, ‘Yeah, that is what your property is worth. We checked the market value and we think this is comparable.’ And I’m thinking to myself—I didn’t know enough about eminent domain to argue with them at that point—I’m thinking: God, my building is worth more burned than what you’re offering.”
Gee paid $200,000 to renovate New China’s kitchen after the fire in 2013. His parents paid around $180,000 when they bought the building over 40 years ago. Adjusted for inflation, that equates to around $870,000 today. The village itself paid $40,000 in tax increment financing funds to repair the outside of the restaurant.
Gee has been talking with attorneys to make sure he gets a fair value for his property.
“All I know how to do is cook food. I’m not here to study law,” he said.
Even though Fox River Grove is looking for a private investor, they can still use the power of eminent domain because they consider the project “economic development.” This precedent comes from the landmark case Kelo vs. City of New London, in which the U.S. Supreme Court allowed private developments to count as “public use” under certain circumstances. Illinois passed laws limiting this kind of eminent domain to blighted areas, but this loophole can be abused, especially because the state doesn’t share the added restrictions of nearby Wisconsin.
“[Blighted] ends up being a synonym for ‘coveted,’” said Robert McNamara, a senior attorney with the Institute for Justice, the organization that litigated the Kelo case.
The buildings down the street from New China may be empty, but the restaurant is anything but blighted.
“For 40 years, we paid our dues in taxes, property taxes,” Gee said. “We’ve created value.”
This is the second time the village has made a move to redevelop the downtown area. The first plan in 2015 involved building 300 apartments on the other side of U.S. 14, in addition to redeveloping everything on Gee’s side of the street, from the Villa Bleu restaurant to the river. Those plans fell through when the developer failed to obtain financing.
The village decided to try again with their current plan in July 2018, with two key differences: They would focus on a smaller area, and they would use the power of eminent domain.
McNamara sees such local government projects as problematic.
“If they had any talent as real estate investors, they’d be real estate investors. But they’re not. They’re local government officials,” he said. “Their best option [to encourage growth] is to stop getting in the way of economic development.”
Neither the village administrator nor the village president responded to a request for comment. Soderholm declined comment to the Northwest Herald because of the ongoing negotiations.
The burden of finding a new location falls on Gee and not the village. He’s concerned about finding the right square footage to let him retrofit all of his new kitchen equipment. He also can’t predict where he won’t be in the path of continuing redevelopment efforts.
“I hope I would never have to deal with another [eminent domain proceeding] if I relocate,” he said. “But there’s no guarantee. If it’s happened here, it can happen anywhere.”
Photography: Joe Barnas, Illinois Policy Institute