Menomonee Falls Village Board agrees to pay into trust funds as part of Radisson settlement
$650,000 would go to firms that worked on hotel
Menomonee Falls — By a 4-0 vote, the Village Board on Monday night approved a proposed settlement agreement regarding the Radisson Hotel. Trustees Sharon Ellis and Bonnie Lemmer were absent, and one trustee position is vacant.
Under the agreement, the village would pay $400,000 into a trust fund for subcontractors on the project, and $250,000 into the Gil-Her Trust. Gil-Her, the general contractor for the hotel project, is in receivership. Village Manager Mark Fitzgerald said the $250,000 would go to a lender and other creditors.
"The idea behind this was to settle any collateral claims," Village Attorney Michael Morse told the board.
The agreement is subject to approval in Waukesha County Circuit Court. A hearing on the settlement is scheduled for March 31, and Fitzgerald said afterward that "with all sides agreeing, that should be a straightforward process."
In 2010 the Village Board approved a $17.65 million construction loan to the developer, Lodging Investors of Menomonee Falls. After Lodging Investors missed payments on the construction loan, the village filed a foreclosure suit. The court last year entered a judgment of $14,838,000 plus interest and costs for the village.
The settlement agreement states that "the village and the court-appointed receiver over the hotel are making reasonable efforts to market and sell the hotel for the best obtainable price, however it is anticipated that the sales price of the hotel will be less than the amount of the monetary judgment."
Fitzgerald said afterward that the $650,000 is from the original borrowing. He told the board the village is free to sell the hotel after June 30, unless the hotel owners pay off the mortgage by that date.
"It's been a long time coming," Fitzgerald told the board. "It's very hard to work this through foreclosure. Frankly, it's nice to move this forward."
The manager also said after the meeting that "sales proceeds aren't part of this settlement," so proceeds from a sale can be applied to remaining debt from the project.
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