Davis questions village officials' loan review
Former village president hosts forum to discuss Radisson deal
Menomonee Falls - With a bevy of documents in hand, former Village President Jefferson Davis on July 24 discussed the controversial Radisson Hotel development at a public forum he initiated.
The village in 2010 loaned developers $17.65 million to convert the former Falls Inn, W14776 Main St., into a 135-room Radisson property. It has been operating under a court-appointed receiver since November.
From the onset, the project stirred mixed reaction in the community. While proponents lauded the effort as an opportunity to address what had long been deemed a highly visible eyesore in the hopes of spurring area development, opponents were critical of the village's decision to loan the money at a time when private lenders were unwilling.
Lodging Investors of Menomonee Falls, the limited liability corporation that had been overseeing the property until late last year, has been under fire in recent months for defaulting on the village's loan. Two payments of $700,000 each were owed to the village in November and May and remain unpaid.
Hot topic at board meetings
At recent meetings, residents and unpaid subcontractors have packed Village Board meetings and expressed dismay about the property's status during 15-minute periods designated for public comment.
Davis said he held the public forum at the village library to discuss the project's past and present at a venue beyond the 15-minute constraints at board meetings. He also criticized sitting elected officials, as well as the village manager and village attorney, for being silent on the Radisson situation for about a year.
"They've been behind this cloak of secrecy," Davis said.
Village Attorney Michael Morse declined to comment "on anything Mr. Davis has to say." Village Manager Mark Fitzgerald was unavailable by press deadline.
Because the current status of the Radisson property involves litigation, a number of closed session meetings have been held to discuss where the village is heading.
Property is stable
Several weeks ago, Randy Crocker, an attorney representing the village in litigation, provided a brief update in open session at a board meeting. Crocker characterized the Radisson property as being in stable condition, operationally.
Crocker further asserted that he anticipates the village receiving the full amount of the loan through a number of mechanisms, including proceeds from the tax-incremental financing district the hotel is part of, refinancing or selling the hotel and seeking repayment from the borrower under terms specified in a secured financing transaction.
Davis shared his take on the state of property before about 50 people during the forum.
Few spoke during the forum, but those who did criticized elected officials and village management for a perceived lack of due diligence during a vetting process of the five investors that make up Lodging Investors of Menomonee Falls.
"This all could've been stopped," Davis said, suggesting the village should have done an independent audit of all five investors: David Gilbert, Dean Grosskopf, James Heyden, William Krueger and Paul Nooyen.
In June, Heyden was temporarily barred from entering the Radisson property by Waukesha County Judge Donald Hassin.
One of the dozens of documents Davis presented before the audience was a certification of the company's financials. One of the investors, Gilbert, has since filed for Chapter 7 bankruptcy, citing debt of $106.4 million and assets of $3.3 million.
"This isn't worth the paper it's printed on," Davis said of the document.
Not planning to run for office
One resident in attendance suggested holding a recall effort for the sitting board members.
"I'm kind of worn out with recalls," Davis replied. "But there's an election coming up in April. I think that's the best thing citizens can do."
There will be three open seats on the Village Board in April that are currently held by Trustees Michael McDonald, Stephen Raymonds and Jeffrey Steliga. Davis said in a later he does not plan to run for one of these seats.
Davis' presentation also included a discussion about the money owed to subcontractors.
"Let's do the moral and ethical thing and pay these people," Davis said.
During his recent Village Board presentation, Crocker said the village is under no direct obligation to pay subcontractors. But he asserted each company would eventually receive compensation through foreclosure proceedings.
Your link to the biggest stories in the suburbs delivered Thursday mornings.
Enter your e-mail address above and click "Sign Up Now!" to begin receiving your e-mail newsletter Get the Newsletter!
- UberDork Cafe opens in Falls
- Menomonee Falls approves Kwik Trip plans
- Menomonee Falls approves flat tax rate for 2015
- Menomonee Falls School Board lobbies for funding, local control
- Fundraising party for childhood cancer honors Graham's memory
- Graham's memory honored with fundraising party for childhood cancer
- Menomonee Falls Police report: Nov. 13, 2014
- Quest Specialty Coatings challenges OSHA findings
- The community reacts to loss of local legend Ernie Von Schledorn
- Menomonee Falls Radisson Hotel finances come full circle