News Detail

Eminent domain can be imminent doom for Brown Line businesses

Medill Reports

by Nicole Cohen
Feb 26, 2009

More than seven years ago, Brian Elmiger found out the CTA was going to take his property.

Today he says if he had known what it would cost him to relocate his business – the restaurant and concert venue Bottom Lounge – from next to the el in Lakeview to the West Loop, he never would have done it.

“It is an absolute miracle that we opened again,” he says. “I mean, a miracle.”

So far, the CTA has forced 30 businesses to relocate to expand the Brown Line. And the temporary closing of el stops for project construction has affected even more.

But Bottom Lounge isn’t out of the woods quite yet.

The path to reopening involved hiring attorneys, paying for construction and, subsequently, a whole lot of debt. Three years after closing down and almost a year after reopening, Elmiger is fighting to get the CTA to foot a bill that amounts to hundreds of thousands of dollars.

At first glance, eminent domain seems like a simple law.

“This is the way public bodies get land,” said Bill Ryan, a partner at Ryan and Ryan, a law firm that specialized in eminent domain cases.

Ryan said there are two big questions that come up in every eminent domain claim he works on. “One, do they [the public body] have the right to take the property and, two, how much money do they have to pay?”

The Fifth Amendment says government can’t take private property without paying for it, which is where the law leaves room for interpretation. The phrase is “just compensation,” and the debate centers around what’s just.

“On value, it’s a wide-open issue,” Ryan says. “It’s a regular lawsuit: we have depositions, discovery and negotiations, and if we can’t resolve it, then we have trials.”

But “just compensation” can also reach beyond property value.

Because the Brown Line Expansion Project used federal funding, the CTA also had to comply with the Uniform Relocation Act which, according to Ryan, means that the CTA was also responsible for a business’ relocation expenses; yet another law that leaves room for interpretation.

The $530 million project broke ground in 2004 with the goal of providing longer platforms to accommodate longer trains, making Brown line stations accessible to disabled people, and modernizing stations. The CTA says they expect to complete construction by the end of 2009.

Kimberly Reed, who said she has been riding the Brown line for two years, says she has definitely seen improvements in Brown Line service.

“I never have to wait more than two or three minutes,” Reed says of her transfer from Red to Brown Line trains at Belmont.

“Some of the trains have these high capacity cars now where they take the seats out so more people can stand and that’s kind of cool,” she said.

Reed also said that the added track at Belmont, which allows Brown and Red line trains to come in at the same time instead of taking turns on one track, makes transferring a lot easier than it used to be.

Worst-case scenario

The value of the old property is where Elmiger’s battle began.

“When they tried to acquire the property, they tried to tell us our property was not worth that much because it’s too close to the el,” Elmiger said. “[The initial offer] was ridiculous.”

After intense negotiations, Elmiger says he ended up getting twice the CTA’s original offer or approximately $1.75 million.

“So you tell me how fair that initial offer is.”

And then there’s the question of where the lounge moved. According to Elmiger, a new challenge has been “getting people to come to the middle of nowhere.”

“We’re not far from an el stop,” Elmiger said, “but no one passes it when they’re walking home.”

The story of Bottom Lounge’s relocation makes you realize how much of a miracle their reopening really was.

After the initial offer, the CTA was required to give Elmiger 90 days notice to shut down and Elmiger spent the better part of two years waiting for that notice, never knowing when he would be 90 days away from closing up shop.

“It was just a terrible dark cloud,” Elmiger said. “We succeeded, but if we didn’t stay open, basically I would have lost my business. I would have gotten nothing for, at the time, 14 years of hard work.”

Elmiger likened the task of finding the new location at 1375 W. Lake St. – which complies with zoning codes and license requirements – to finding a needle in a haystack. He sums up the expensive process of reapplying for all the licenses needed to run the original Bottom Lounge by saying “It was painful.”

“It’s from pure determination and stubbornness that we saw this thing all the way through,” he says.

Although he concedes that if he had it all to do over, he wouldn’t have done it at all.

Best-case scenario

The owners of Belmont Army, now at 855 W. Belmont Ave., had much better luck.

For one thing, their clothing store didn’t require nearly as many licenses as Elmiger’s restaurant and music venue and the CTA Board approved Belmont Army’s last relocation-related reimbursement at last week’s meeting.

For another thing, they already owned the building they would soon relocate to – just down the street from their original location by the el.

Still, after 25 years at their old location, Vice President Craig Scholla said they pretty much had to start from scratch.

“It was definitely difficult,” Scholla said. “There was nothing easy about it.”

And while the CTA did pay for the storage of the shop’s vintage collection for the two years before the store reopened, Scholla says the store’s new clothing stock didn’t keep so well.

“Most of our store is fashion,” he said, “fashion you pretty much have to dump and get rid of.”

According to Scholla, the move resulted in a definite loss of business and, like Bottom Lounge, Belmont Army had to pay a pretty penny for the building it now has – even if they did already own it.

The CTA is obligated to cover $10,000 in renovation claims related to their eminent domain acquisitions.

But the cost of renovating the new Belmont Army building into the four-story metal façade structure that stands today far surpassed the CTA’s reimbursement.

“It was quite a few hundred thousand dollars short,” Scholla says.

And then there was the challenge of getting old customers back in the new store.

“When the store reopened, people got confused,” said Kimberly Baugh, who has been working at the store’s Belmont location for a year.

Baugh said sometimes customers who knew their old store would walk in and then right out of the new store because they didn’t recognize it.

“This is all new clothing and the Army Surplus is on the third floor,” Baugh said, “so we have to kindly direct them.”

Looking forward

Less than a year after reopening, Elmiger remains cautious about the future of his business.

“The new location is great,” he says, “but I spent 2.5 years and a truckload of debt to get back to where I was 15 years ago as far as developing a business that is profitable.”

Elmiger says that with the current economic climate, “it’s kind of hard to gauge your success or what you think your success should be.”

But he also says that he doesn’t view his situation as particularly unique, especially when it comes to issues of eminent domain.

“I don’t think what we went through is any different from what any other business has to go through,” he said.

And the move has certainly put things in perspective for Elmiger.

“You think back to the old place,” Elmiger says. “We were going to spend a hundred grand to renovate the place to make it a little bit nicer, a bit more modern – compared to the millions of dollars you spend on the new location. It just makes you think how much we’ve lost by losing the other location.”

This article is available online here.