Schaumburg may boot 'anti-competitive' deeds

Schaumburg wants to protect its lucrative commercial areas by ending a land-sale practice one trustee called "un-American."

Today, businesses can -- and have -- put restrictions on their land deeds that prohibit competing businesses from opening up shop after the properties are sold.

The issue was recognized as a problem when village trustees learned that a Mobil station torn down at Roselle and Wise roads had left behind a deed restriction prohibiting any other gas station from locating there.

"The village board didn't like that because they liked the idea of having a gas station at that location," Community Development Director Christopher Huff said.

These restrictions can be either for specific periods of time or forever, Trustee Tom Dailly said.

He described the practice as anti-competitive and un-American.

If the proposed change is approved by trustees Feb. 12, the scope of such deed restrictions will be substantially limited.

There have been several instances of businesses imposing these deed restrictions in Schaumburg already. Left unchecked, the practice could potentially break up even the economic powerhouse of the village's row of auto dealerships on Golf Road, Dailly said.

There have been two instances in town in which Jewel Foods has put such anti-competitive restrictions on land it's owned, Village Manager Ken Fritz said.

Jewel put such a restriction on its former site at Schaumburg and Springinsguth roads after closing the store, Fritz said. And without even moving its location at Wise and Roselle roads, Jewel bought the shopping center across the street to put a restriction on the deed, village officials said.

While such restrictions might already exist on certain deeds, they'd be illegal to enforce if the ordinance is approved next month, Fritz said.

"The whole idea is to look at what's good for the whole community, not just what's good for that business," Fritz said.

The ordinance is modeled after one already in use in Chicago, where neighborhoods built around food stores have become blighted when the original store closed and a successor was prohibited, Fritz said.

The proposed Schaumburg ordinance would allow anti-competitive restrictions to last for up to two years if the original business is merely relocating within half a mile.

This at least buys the original business some limited time to get set up in its new location, officials said.

"If a grocery store moves across the street, you can't really make the case that we've lost a grocery store," Fritz said.

The ordinance doesn't prohibit landlords from putting noncompetition clauses in leases, but only on the property deeds themselves.