The Vanguard

Main Street Redevelopment Costs Near $1.6 Million...Village Manager Refuses to Respond to Inquiries

Posted by Jefferson Davis on Nov. 16, 2009

$1.6 million Main Street

Citizen Inquiry Leads to Investigation of $1.6 Million in Main Street Redevelopment Costs Since 2003 

The Vanguard receives numerous tips and inquiries about various local, state and federal issues that severely affect taxpayers because of decisions and policies that are made by elected officials without cause or concern for the taxpayers who pay the bill for the decisions of those elected officials.

Once such inquiry is the attached email from earlier this summer...

    "Hi, what can we do to get the hotel knocked down?  We had some friends in from another state and they couldn't believe our mess."

The Vanguard made numerous inquiries over the last several months of the Village about the costs for the Main Street Redevelopment that started nearly 7 years ago, only to be stonewalled until recently when repeated attempts to get information were partially granted by Village Officials.

Main Street Redevelopment Plans Started in 2003

To the credit of the Village Manager and Village Board at the time, plans for the redevelopment of Main Street started in 2003.

The section of Main Street from Pilgrim Road east to the City of Milwaukee at 124th Street near the dump, has long been an area that has many eyesores and less than desirable properties causing great concern for citizens who often asked the question:

     "What are we getting in return for our money that is spent in taxes?"

According to professional traffic studies, this section of Main Street is estimated to have approximately 10-14,000 cars a day made up of local residents as well as those who are visiting the area or are simply driving through the Falls on their way to and from work.

Realizing the condition of numerous areas of deplorable properties, the Village Manager asked the Village Board to expend taxpayer money to create a vision and plan for this area that residents and visitors could be proud of instead hoping that people would simply look the other way, close their eyes or just ignore the obvious as conditions on Main Street continued to decline over the last 30 years.

For those businesses that have survived on Main Street and are hanging on to keep their doors open, a big hearty thank you goes out to you for providing Falls residents the commerce and retail options that you do.  Main Street would be a disaster without you.

Breakdown of $1.6 Million Main Street Redevelopment Costs Examined

Since 2003, taxpayers have paid the following costs to redevelop Main Street so far:

• $349,314 for the purchase of property from Ernie Von Schledorn (http://www.evsauto.com/). 
• $399,024 for water main work to C.W. Purpero (http://maps.google.com/maps/place?hl=en&source=hp&rlz=1R2TSHB_en&um=1&ie=UTF-8&q=cw+purpero+milwaukee&fb=1&gl=us&hq=cw+purpero&hnear=milwaukee&cid=12248522190519355872) for the Main Street Hotel.
• $262,500 for consulting services to RTKL (http://www.rtkl.com/).
• $92,949 for services to planning and engineering firm Bonestroo (http://www.bonestroo.com/).
• $78,056 for services to planning firm HNTB (http://www.hntb.com/about-us).
• $177,581 for legal fees to the former law firm of the Village Attorney, von Briesen & Roper, S.C.(http://www.vonbriesen.com/).  
• $11,147 for accounting fees to the former accounting firm of the Village Financial Services Director and current Village Accounting Firm, Reilly, Penner & Benton (http://www.rpb.biz/).
• $4,379 for legal fees to the law firm of Michael, Best & Friedrich (http://www.michaelbest.com/).
• Approximately $100,000 for in house services provided by Village Employees.

It appears that a lot of firms have made a lot of money off the backs of the taxpayers of Menomonee Falls with little or nothing to show for it over the last 7 years.

Taxpayers Foot the Bill for Interest Costs on $1.25 Million Main Street Bond in Additional Costs

The Vanguard has learned that taxpayers not only had to foot the bill for all of the legal, accounting, consulting, construction, planning and in house costs for the Main Street Project, but taxpayers also have to make the interest only payments on the $1.25 million bond that was issued by the Village Board in 2008 for the Main Street Project.

The $1.25 million bond was issued as a 2 year note with an interest rate of 4.5%.

 Those interest payments total $110,312.50 which were and are due in similarly equal payments on May 5, 2009, November 11,2009, May 5, 2010 and November 1, 2010.

These are interest payments only.

The $1.25 million outstanding loan balance will eventually have to be paid off.

The promise by the Village Manager and Village Board in 2008 was to use the new tax revenues from the Main Street Redevelopment Project to make these payments.

Obviously, that remains in question and appears to be somewhat doubtful as the taxpayers will have to make up for the difference if the Main Street Project ultimately fails.

The Village Manager refuses to answer where the money will come from to make the current $110,312.50 in interest payments for the issuance of the 2008 $1.25 million bond for the Main Street Project.

All members of the Village Board have also been asked the same question(s) and refuse to answer to date.

Village Manager Questioned About Main Street Redevelopment Costs and Project Status

Numerous inquiries have been made of the Village Manager over the last few months for an update about the $1.6 million redevelopment costs of Main Street and the progress of the project.

To date, the Village Manager has repeatedly refused to respond to those inquiries instead choosing to  hide behind the Village Attorney's advice that he doesn't have to "give his opinion" with Open Record Requests.

It has been repeatedly made clear to the Village Manager that no one is asking for his opinion, but simply want to know from him in his capacity as the CEO of the Village Government what is going on with the Main Street Project after numerous stories and promises were made to the taxpayers by him and the Village Board that this project was going to be a resounding success and paid for by new tax revenues from Main Street Redevelopment. 

Taxpayers have a right to know how their money is being spent and what the status of apparently failed projects are before any more money is possibly wasted for projects that appear to be headed for a dead end.

Village Manager and Village Board Promised Main Street Renaissance with 2008 Developer's Agreement to be Completed by December 31, 2008

Many news articles in the local newspapers boasted of Main Street's Redevelopment by the Village Manager and Village Board in September of 2008. 

After taxpayers paid nearly $1.6 million of their hard earned money to improve this long neglected and depressed area, it was finally hoped that after 30 years of abuse that the Village Manager and Village Board would finally follow through with their promises of redeveloping Main Street.

A recent review of the Village Manager and Village Board's Developer's Agreement reveals some very interesting and perplexing issues.

The terms of the Developer's Agreement are very clear and need to be followed through on by the Village Manager and Village Board to protect the taxpayers who have footed the entire $1.6 million bill so far with little or nothing in return for their investment.

Please consider the following actions required of the Developer's Agreement by the Village Manager and Village Board:

(Note: the Village Manager has been asked for clarification of these terms and refuses to answer any inquiries.)

• The developer had to spend $10.5 million on the Main Street Hotel for a value of $13-$15 million.
• The developer had to spend $13.1 million on the 82 condos across the street from the hotel on Main Street for a value of $16.4 million.
• The developer had to begin work on the project within 90-120 days of November 9, 2008.
• The developer had to maintain a Radisson Franchise Agreement for 10 years.
• The developer had to maintain a 5,000 square foot full service restaurant agreement for 10 years.
• The developer must have the Radisson Hotel and full service restaurant absolutely open by December 31, 2008. 
• The developer would annually receive 37.5% of all generated hotel taxes through 2027 in exchange for promoting the hotel.
• Village Manager and Village Board promised as part of their 2009 Village Budget that the hotel would generate $50,000 in hotel taxes annually.  The hotel has generated $0.00 in tax revenue for 2009. 
• $3.1 million Municipal Revenue Obligation Bond (MROB) is provided for in Article IX of the Developer's Agreement.  It is unclear if the MROB has been issued for the project as the Village Manager and Village Board refuse to answer questions.
• $1.00 is the price the hotel owner will pay to the Village Board for the Redevelopment Parcel if the 82 conco units are not built across the street from the hotel by 2013 or 5 years.  This clause is unclear as well as the Village Manager and the Village Board will not answer questions.

The Developer's Agreement has a "Performance Clause" (The Vanguard term) in Article XIV where 8 areas of the Agreement must be met or the Agreement could be considered in default.

It is clear from examining those clauses that the Developer's Agreement appears to be in default for failing to meet various performance requirements established by the Village Manager and the Village Board.

The Village Manager and Village Board are required by the Agreement to notify the developer to resolve the outstanding issues to cure the default matters. 

It remains unclear as to what if anything is being done with the Main Street Project as the Village Manager, Village Attorney and Village Board refuse to answer any questions of the taxpayers.

Trustee McDonald and Former Municipal Judge Shake Down Developer for Village Board Votes in Exchange for Cash

Trustee Mike McDonald, who is up for re-election to the Village Board in 2010 and is no stranger to skirmishes with the law as he was arrested and convicted on DWI Charges in 2003 which cost him his driver's license for 6 months, a $612.00 fine and alcohol assessment, was also caught and cited with 2 charges by the Menomonee Falls Police for hiding in a closet after bar hours and obstructing an officer at Su Casa Restaurant in Menomonee Falls in 2009.

The 2009 case is still pending in Waukesha Municipal Court.

Trustee McDonald, according to Police Reports, always threatened Police Officers when he was arrested or cited by the officers that he was going to go to "...the Chief" because of the officer's actions against him as a Village Trustee. 

Trustee McDonald, along with the former Municipal Judge, tried to shake down the developer and his original partner of the Main Street Hotel in 2005 and 2006 for cash contributions in exchange for Village Board Votes to approve the developer's project while meeting at North Hills Country Club.

It is widely known that the developer gave money to the former Municipal Judge in exchange for Village Board Votes.

The former Municipal Judge later had to resign from office in 2006/2007 for numerous legal violations involving the lack of disclosure of client accounts and the improper recording of financial transactions for services rendered to clients when client payment for services were deposited into the personal bank account of the judge and not the law firm's client escrow accounts which is required by law.

The Wisconsin Supreme Court Rules for Professional Conduct of Attorneys through its Disciplinary Division cited the former Municipal Judge before he resigned from office.

Is it any wonder that certain projects in Menomonee Falls aren't completed especially when they are tainted like this one has been from the start? 

Taxpayers Deserve to Know Where Their $1.6 Million Went

What do you think?

Let The Vanguard,

Village Manager (mfitzgerald@menomonee-falls.org),

Village Attorney (mmorse@menomonee-falls.org),

Village Financial Services Director (mdatka@menomonee-falls.org) and

Village Board (http://menomonee-falls.org/index.aspx?nid=292) know what you think about the accounting for the expenditure of $1.6 million of taxpayer money and for the update of what, if anything, is being done with the Main Street Project.