Madison - St. Clair Record

Monday, September 16, 2019

Dollar General granted summary judgment in contract dispute with City of Mounds

By Chandra Lye | Aug 1, 2017

EAST ST. LOUIS - District Judge Phil Gilbert granted summary judgment for Westmore Equities in a suit alleging it had a legally binding contract with the City of Mounds to develop a Dollar General store in the area. 

Westmore is a real estate development company for Dollar General Corporation. 

It claims Mounds breached the contract. 

However, Mounds alleges the contract was not valid. 

Both parties sought summary judgements when Gilbert ruled in favor of Westmore. 

According to the complaint, the Mounds City Council committed to have Westmore develop the store at 764 S Blanche

As part of the agreement Mounds had agreed to give Westmore 75 percent of the annual tax incremental finance (TIF) revenue up to $350,000 over 23 years.

On April 21, 2010 the two parties signed a redevelopment contract. 

At the time, no specific budget amount was presented to City Council. Instead, the mayor entered an exclusive contract with the company based on previous discussions. 

In July 2013 Westmore made its first payment request of $16,769.63, which Mounds paid. However, in September 2014, Mounds notified Westmore that the contract was void and they would not pay further amounts. 

The plaintiff questioned whether the contract can be deemed void without the prior approval of City Council.

Mounds claimed it has limited authority under the non-home rule municipality, but Gilbert found that it has the ability to make contracts, including the one with Westmore, because of the TIF Act. 

“The Act is an avenue by which the Illinois code grants additional power to non-home rule municipality through statute,” he wrote in his judgement.

“Further the City did not make promises to make the Dollar General a possibility; instead it took affirmative actions to induce Westmore to begin developing the property,” he added.

The court also concluded that the mayor had the authority to enter into a valid and binding contract.

“When you look to the Illinois Municipal Code and the TIF Act together, it becomes clear that Butler, then the City mayor, had the express right to enter into any necessary contracts needed to effectuate the redevelopment plan, which had been approved on April 19, 2010 by the City Council,” Gilbert wrote.

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U.S. District Court for the Southern District of Illinois