                        Docket No. 106805.


                              IN THE
                      SUPREME COURT
                                 OF
                THE STATE OF ILLINOIS




THE CITY OF CHICAGO, Appellee, v. PROLOGIS et al.,
                  Appellants.

                  Opinion filed January 22, 2010.



   JUSTICE FREEMAN delivered the judgment of the court, with
opinion.
   Chief Justice Fitzgerald and Justices Thomas, Kilbride, Garman,
and Karmeier concurred in the judgment and opinion.
   Justice Burke took no part in the decision.



                             OPINION

    The circuit court of Cook County denied defendant and
intervening petitioners’ counterclaim for inverse condemnation. The
appellate court affirmed the circuit court’s denial of the counterclaim
(383 Ill. App. 3d 160), and we granted defendant and intervening
petitioners’ leave to appeal. 210 Ill. 2d R. 315. For the reasons that
follow, we affirm the judgment of the appellate court.

                          BACKGROUND
    In 1996, the Village of Bensenville authorized tax increment
allocation financing through the issuance of tax increment financing
(TIF) bonds pursuant to the Tax Increment Allocation Redevelopment
Act (65 ILCS 5/11–74.4–1 et seq. (West 1996)). Bensenville took this
action in order to redevelop land (subject property) bordering O’Hare
International Airport, which is owned and operated by plaintiff, the
City of Chicago.1 Bensenville signed a redevelopment agreement with
a developer, Hiffman Shaffer Associates Acquisitions (developer), and
passed the proper ordinances and resolutions approving the
redevelopment agreement. In the redevelopment agreement, the
developer agreed to purchase and develop the subject property by
constructing an air cargo/warehouse distribution complex. The
redevelopment agreement also ratified the developer’s assignment of
its right to purchase the property to defendant ProLogis, f/k/a Security
Capital Industrial Trust, which became both the owner of the property
and a holder of one of the TIF bonds. Bensenville agreed to issue TIF
bonds to finance TIF-eligible improvements to the subject property.
Under the redevelopment agreement, the total cost of the entire
project was approximately $52 million, of which only $8.96 million
was eligible for TIF financing. Bensenville passed a bond ordinance
that provided for the issuance of $7 million worth of TIF bonds and
stated that the ordinance constituted a contract between Bensenville
and the registered bondholders. Defendant received one 20-year-term
TIF bond in the amount of $2.8 million, and the developer’s nominees,
the interveners,2 received 11 20-year-term bonds amounting to $4.2
million. The proceeds of the TIF bonds were restricted to TIF-eligible
costs.
     The 12 TIF bonds issued have different values, but the terms are
identical. The TIF bonds have an interest rate of 10% and are exempt


   1
   Bensenville designated the subject property the “O’Hare Cargo Center
Redevelopment Project Area.”
   2
    Besides defendant ProLogis, the other TIF bond owners are interveners
Dennis J. Hiffman, John F. Cash, Sylvia Doyne Collins Irrevocable Trust
dated 4/10/96, Keith Bank Declaration of Trust dated 12/14/94, Edward R.
Hulina Trust dated 5/10/94, JKS-3D Two Trust, Mark D. Christensen,
Holly D. Hulina Trust dated 5/10/94, Elizabeth E. Hulina Trust dated
5/10/94, Bonnie E. Hulina Trust dated 5/10/94, and Richard E. Hulina Trust
dated 5/10/94.

                                   -2-
from federal income taxes. The bond ordinance outlined the security
for the bonds, specifically that Bensenville “pledges the [p]ledged
[t]axes.” The bond ordinance defines pledged taxes as the incremental
property taxes, which it defines as “the ad valorem taxes, if any,
arising from the tax levies upon taxable real property *** which taxes
are attributable to the increase in the then current equalized assessed
valuation *** over and above the total Initial Equalized Assessed
Value.” The TIF bonds themselves contain an almost identical
provision on their face outlining from where the principal, interest, and
premium, if any, will be paid.3 The bond ordinance also states the TIF
bonds are “limited obligations” of Bensenville and that they are
“payable solely and only from the [p]ledged [t]axes.” Further, the
bond ordinance states “[n]o holder of any Bond shall have the right to
compel the exercise of any taxing power of the Village for payment of
principal thereof or interest or premium, if any, thereon.” An almost
identical provision is stated on the face of the TIF bonds. The bond
ordinance also guarantees Bensenville will not act, or fail to act, in any
way that would adversely affect the TIF bonds.
    In connection with their purchase of the TIF bonds, the bond
purchasers signed certificates of purchase. In doing so, the individual
bondholders certified it received the proper information regarding the
underlying project, including the documents authorizing the bonds,
opinion of bond counsel, and all other information that allowed the
bondholder “to make an informed investment judgment.” Additionally,
they certified that they were “aware that any investment involves
inherent risks and, as such, the security behind that investment should
be fully understood.” Further, the certificate of purchase
acknowledges that the bondholder:



   3
     Specifically, the TIF bonds state that “the principal of and interest, and
premium, if any, on the Bonds are payable solely from (i) the ad valorem
taxes, if any, arising from the taxes levied upon taxable real property in the
O’Hare Cargo Center Redevelopment Project Area *** which taxes are
attributable to the increase in the then current equalized assessed valuation
of each taxable lot, block, tract or parcel of real property in the Area over
and above the initial equalized assessed value of each such piece of property
***.”

                                     -3-
            “is a sophisticated investor, can bear the economic risk of
        the purchase of the Bonds, and has such knowledge and
        experience in business and financial matters, including the
        analysis of a participation in the purchase of similar
        investments, as to be capable of evaluating the merits and risks
        of an investment in the Bonds.”
The certificate of purchase also addresses the security for the bonds.
Specifically, it certifies that the holder of the bond “understands that
the Bonds are secured solely and only by the Incremental Property
Taxes pledged under the Ordinance as security for the Bonds, if, as
and when received.”
    Between 1996 and 2001, Bensenville, the interveners, and
defendant, both as owner of the property and as a bondholder,
performed their obligations under the bond ordinance and the air
cargo/warehouse distribution complex was completed. Defendant
leased the buildings in the complex to commercial tenants. 4
Incremental real estate taxes were collected and paid to the
bondholders.
    In 2002, plaintiff passed an ordinance as part of the O’Hare
Modernization Program, which authorized the use of eminent domain
to acquire the subject property for the expansion of O’Hare
International Airport. In April 2006, plaintiff filed a complaint for
condemnation pursuant to article VII of the Illinois Constitution of
1970, sections 11–61–1 and 11–102–4 of the Illinois Municipal Code
(65 ILCS 5/11–61–1, 11–102–4 (West 2004)), and the O’Hare
Modernization Act (620 ILCS 65/1 et seq. (West 2004)) in order to
acquire fee simple title in defendant’s property. Plaintiff’s
condemnation complaint did not include the TIF bonds as property to
be acquired in the condemnation proceeding.
    In May 2006, interveners, joined by defendant (collectively
bondholders), filed a petition to intervene and a counterclaim for
inverse condemnation alleging that plaintiff’s condemnation of the
subject property amounted to an inverse condemnation and a taking
requiring payment of just compensation, as well as attorney fees, and
costs. The bondholders argued that when plaintiff acquires the subject


   4
       The lessees of the subject property did not participate in this appeal.

                                       -4-
property, it will become tax exempt. Since the TIF bonds are secured
only by the real estate tax income derived from the subject property,
they will lose all value once the property becomes exempt from taxes.
    In August 2006, the circuit court entered an agreed final judgment
order, holding plaintiff was authorized to exercise the right of eminent
domain and that it exercised that right properly. The order also stated
that plaintiff and defendant had agreed on a final amount of just
compensation of $94.5 million for fee simple title to the property. This
compensation award did not include any compensation award for the
bondholders, but it provided that the agreed final judgment order did
not affect, in any way, the bondholders’ claim to just compensation for
the TIF bonds. The parties agreed that the agreed final judgment order
did not constitute a waiver of the right to appeal any order concerning
the TIF bonds.
    In December 2006, the circuit court filed a memorandum decision
and judgment order allowing petitioners to intervene, but denying the
bondholders’ inverse condemnation counterclaim, finding that the
bondholders’ loss is a consequence of a lawful taking, not a taking
separate from the property itself, and, therefore, plaintiff does not owe
the bondholders any compensation. The court found the situation
unique in that it involved a simultaneous condemnation and inverse
condemnation that resulted in a consequential loss. The court stressed
that the bondholders certified they are sophisticated investors and that
the taking of the property was a consequence and known risk. The
court also pointed out that the bondholders admitted in their
counterclaim that the rendering of the bonds valueless was an indirect
result and consequence of plaintiff’s condemnation proceedings.
    The appellate court agreed and affirmed the circuit court’s
decision. 383 Ill. App. 3d at 161. The court concluded that the terms
of the bond purchases show that the bondholders were not guaranteed
to receive the incremental real estate taxes. 383 Ill. App. 3d at 169.
The bondholders were only to be paid by the incremental taxes, “if
any.” 383 Ill. App. 3d at 169-70. The court held it was clear that the
bondholders had notice that due to any number of circumstances,
there was the possibility that they would not receive payment. 383 Ill.
App. 3d at 169-70. The court concluded that the TIF bonds’ loss in
value was a consequence of a lawful taking, and that since the TIF
bonds were not secured by the real property, plaintiffs were not

                                  -5-
required to pay the bondholders just compensation. 383 Ill. App. 3d
at 171-72.

                             ANALYSIS
    The bondholders assert that the TIF bonds’ loss in value after
plaintiff’s condemnation action was not a consequential taking, but a
property interest that requires just compensation. They contend that
both the circuit court and the appellate court erred by relying on the
cases of Omnia Commercial Co. v. United States, 261 U.S. 502, 67
L. Ed. 773, 43 S. Ct. 437 (1923), and John K. & Catherine S. Mullen
Benevolent Corp. v. United States, 290 U.S. 89, 78 L. Ed. 192, 54 S.
Ct. 38 (1933). They further maintain that two federal district court
cases from Oregon, United States v. Aho, 68 F. Supp. 358 (D. Or.
1944), and United States v. Florea, 68 F. Supp. 367 (D. Or. 1945),
properly decide the issue before us. We disagree.
    Determining whether there has been an actionable taking is a
question of law. Department of Public Works & Buildings v. Wilson
& Company, Inc., 62 Ill. 2d 131, 141 (1975). Thus our review is de
novo. Woods v. Cole, 181 Ill. 2d 512, 516 (1998). In a claim for
inverse condemnation, as opposed to an eminent domain action, the
property owner seeks compensation for a taking of private property
where a condemnation proceeding has not been initiated. Byron
Dragway, Inc. v. County of Ogle, 326 Ill. App. 3d 70, 73 (2001). As
discussed by the circuit court, this case presents a unique situation: a
condemnation proceeding was initiated by plaintiff, but plaintiff’s
condemnation complaint did not include allegations that the TIF bonds
were property that required just compensation. At issue is whether the
holders of TIF bonds, although the TIF bonds are secured solely by
the possibility of incremental real estate taxes, are due just
compensation for the TIF bonds’ loss of value, or whether the TIF
bonds’ loss in value, due to plaintiff’s condemnation proceeding, is a
consequence of a lawful taking, and, thus, not eligible for just
compensation.
    Authority prohibiting the taking of private property for public use
without paying just compensation is found in both the Illinois and
United States Constitutions. Specifically, the fifth amendment to the
United States Constitution, made applicable to the states through the


                                  -6-
fourteenth amendment, provides that private property shall not “be
taken for public use, without just compensation.” U.S. Const., amend.
V. The Illinois Constitution of 1970 states: “Private property shall not
be taken or damaged for public use without just compensation ***.”
Ill. Const. 1970, art. I, §15. Private property includes “every kind and
character, whether real, personal, tangible, or intangible.” Illinois
Cities Water Co. v. City of Mt. Vernon, 11 Ill. 2d 547, 550-51 (1957).
     In Omnia, owners of a potentially lucrative contract to the rights
to purchase steel plate below market value from Allegheny Steel
Company sought just compensation from the federal government.
Omnia, 261 U.S. at 507-08, 67 L. Ed. at 775, 43 S. Ct. at 437. Before
the owners of the contract exercised their right to purchase the steel
plate, the federal government requisitioned Alleghany Steel
Company’s supply of steel plate for an entire year and ordered the
company not to comply with the owners’ contract to purchase steel
plate below market value. Omnia, 261 U.S. at 507, 67 L. Ed. at 775,
43 S. Ct. at 437. The United States Supreme Court held that where
loss or injury are the consequences of a lawful government action, the
government does not owe just compensation. Omnia, 261 U.S. at
510, 67 L. Ed. at 776, 43 S. Ct. at 438. The Supreme Court stressed
that the federal government did not keep the contract for its own use.
Omnia, 261 U.S. at 513, 67 L. Ed. at 777, 43 S. Ct. at 439. Rather,
the contract was ended as a consequence of the federal government’s
requisition. Omnia, 261 U.S. at 513, 67 L. Ed. at 777, 43 S. Ct. at
439. The Supreme Court held, “If, under any power, a contract or
other property is taken for public use, the Government is liable; but if
injured or destroyed by lawful action, without a taking, the
Government is not liable.” Omnia, 261 U.S. at 510, 67 L. Ed. at 776,
43 S. Ct. at 438.
      In Mullen, the Supreme Court addressed a factually similar
situation to the one before us here. Mullen, 290 U.S. at 90, 78 L. Ed.
at 193, 54 S. Ct. at 39. In Mullen, a village government issued bonds
to finance infrastructure improvements and authorized assessments to
pay the principal and interest of the bonds. Mullen, 290 U.S. at 90, 78
L. Ed. at 193, 54 S. Ct. at 39. The federal government subsequently
acquired the land from which the assessments were made, paying all
the existing assessments to the property. Mullen, 290 U.S. at 91, 78
L. Ed. at 194, 54 S. Ct. at 39. The bonds, however, were not fully

                                  -7-
paid. Mullen, 290 U.S. at 91, 78 L. Ed. at 194, 54 S. Ct. at 39. The
statute authorizing the bonds allowed for reassessment of the property
in order to pay the outstanding bonds, which the village was to collect
and place in a separate fund to pay the bonds. Mullen, 290 U.S. at 93,
78 L. Ed. at 195, 54 S. Ct. at 40. The reassessment was done after the
federal government acquired the property, but since it was then owned
by the federal government, the assessment was a nullity. Mullen, 290
U.S. at 91, 78 L. Ed. at 194, 54 S. Ct. at 39. The Supreme Court
denied the bondholders compensation, holding the bonds were not
taken and “at most frustrated action by the city to replenish the
assessment fund to which alone the bondholder must look for payment
of his bonds.” Mullen, 290 U.S. at 94-95, 78 L. Ed. at 195-96, 54 S.
Ct. at 40.
    In this case, plaintiff lawfully condemned land in order to expand
O’Hare International Airport according to the O’Hare Modernization
Act (620 ILCS 65/1 et seq. (West 2004)). The legality of plaintiff’s
condemnation of the fee simple interest in the subject property has not
been questioned. One of the bondholders, defendant ProLogis, was
even part of the agreed final judgment order that authorized plaintiff’s
right to eminent domain and stated that plaintiff had exercised that
right properly. As in Omnia, where the federal government did not
take the contract at issue for its own use, here plaintiff did not take the
TIF bonds, which are still the property of the bondholders. Similar to
Mullen, where the federal government “frustrated” the bond payment
fund, the only source of payment for the TIF bonds in this case was
from the incremental taxes and only if any were generated. A
consequence of plaintiff’s subsequent ownership of the subject
property was the termination of the generation of incremental taxes.
The destruction of the value of the TIF bonds was a consequence of
plaintiff’s lawful action and, thus, as case law makes clear, plaintiff
does not have to pay just compensation for the TIF bonds’ loss in
value.
    Similar to the contract in both Omnia and the bonds in Mullen, the
destruction of the TIF bonds’ value was an indirect consequence of a
lawful government action. We therefore agree with both the circuit
court and the appellate court that Omnia and Mullen control this case.
Moreover, we believe that bondholders’ reliance on the two district
court cases, Aho and Florea, is misplaced. Aho and Florea involved

                                   -8-
the federal government condemning land in drainage districts in
Oregon. Aho, 68 F. Supp. at 358; Florea, 68 F. Supp. at 367. In both
cases, the federal district court ruled the federal government had to
pay future assessments that acted as an encumbrance on the
condemned land. Aho, 68 F. Supp. at 366; Florea, 68 F. Supp. at 376.
In the case before us, the only security the bondholders had was the
right to the incremental taxes, if any, which did not encumber the
subject property. The security for the bonds is outlined in the bond
ordinance and in the TIF bonds themselves. Additionally, each
bondholder signed the certificate of purchase and, in doing so,
confirmed they understood what secured the TIF bonds.
     The bondholders, in their brief, specifically argue that the Illinois
takings clause provides them greater protection than the federal
takings clause provides. However, bondholders did not raise this issue
in their petition for leave to appeal. In Dineen v. City of Chicago, this
court recognized that the forfeiture rule is not jurisdictional, and thus
does not prevent a court of review from considering an issue not
raised in a petition for leave to appeal. Dineen v. City of Chicago, 125
Ill. 2d 248, 265-66 (1988). Rather, the forfeiture rule is discretionary,
and in certain specific circumstances, a court may review a claim even
when it was not included in the petition for leave to appeal. Dineen,
125 Ill. 2d at 265-66. None of the circumstances outlined in Dineen
are present in this case, and for that reason we will not consider this
issue. Dineen, 125 Ill. 2d at 265-66.
     Finally, bondholders advance several other arguments that are
unpersuasive. They assert that the TIF bonds’ rights to the incremental
taxes are secured by the municipal ordinances and tax lien
jurisprudence. This directly contradicts the agreements to purchase the
TIF bonds to which the bondholders were parties. As stressed in the
bond ordinance, the TIF bonds, and the certificate of purchase signed
by each of the bondholders, the only security for payment of the TIF
bonds was the incremental taxes, if any. The bondholders fail to offer
any authority stating that the municipal ordinances act as security for
the TIF bonds. The bond ordinance is clear in that it operates as a
contract between Bensenville and the purchasers of the TIF bonds. It
does not bind plaintiff. Additionally, bondholders do not cite any
authority to show how their right under the TIF bonds to the
incremental taxes translates into a tax lien that demands the payment

                                   -9-
of just compensation. The bond ordinance is clear that the
bondholders cannot compel Bensenville to tax the subject property.
Accordingly, we are unpersuaded by bondholders’ contention that
various municipal ordinances or tax lien jurisprudence in Illinois
operates as security for the TIF bonds.
    Bondholders also disagree with the appellate court’s decision that
the holders of the TIF bonds assumed the risk of a possible
condemnation. We find this argument without merit because it is
directly contradicted by the certificate of purchase each bondholder
signed. In the certificate of purchase, the bondholders certified that
they were informed of their purchase, were aware that there were
“inherent risks,” and that they understood the terms. The certificate
described, and the bondholders ratified, that they were “sophisticated
investor[s]” who were capable of evaluating the risks of investing in
the TIF bonds. Additionally, the certificate of purchase stated that the
bondholders knew and understood that the only security for the TIF
bonds was the incremental property taxes, “if, as and when received.”
As plaintiff states in its brief, the City of Chicago has previously
condemned land in other municipalities for the expansion of O’Hare
International Airport.5 Although the bondholders may not have known
of this particular airport expansion, it is not unheard of that O’Hare
International Airport may expand. Since the subject property borders
the airport, an investor could reasonably foresee that the subject
property is vulnerable to future airport expansion.
    This case clearly falls within the parameters of both Omnia and
Mullen. The right of the bondholders to the incremental taxes, if any,
generated by the subject property, and the subsequent loss of value of
that right, is due to a lawful government action by the plaintiff and,
therefore, plaintiff does not have to pay bondholders compensation for
the lost value of the TIF bonds.

                            CONCLUSION
       The judgment of the appellate court is affirmed.




   5
       See Village of Schiller Park v. City of Chicago, 26 Ill. 2d 278 (1962).

                                      -10-
                                                      Affirmed.

    JUSTICE BURKE took no part in the consideration or decision
of this case.




                             -11-
