By Shereen Siewert
GREEN BAY — A Florida company claims the developer of Wausau’s Riverlife project owes the company more than $153,000 after a check paying for design services at Green Bay’s Hotel Northland bounced in January, according to court documents.
The suit is one of four open cases in Wisconsin involving Michael Franz, the senior project manager of a $100 million multi-phase riverfront development on Wausau’s east side. Frantz Community Investors, the original developer entity chosen by the city through an RFP process in 2016, is also named in the suit, which was filed Feb. 3 in Brown County Circuit Court.
According to the complaint, obtained this week by Wausau Pilot and Review, Guru of Luxury, LLC signed an agreement in June 2015 to oversee the design plan as well as oversee installation of furnishings and fixtures for the hotel project. Under the terms of the contract, which is included in the complaint document, Guru was to be paid $7,500 per month and $5,000 upon completion, for a total of $125,000 plus expenses.
Guru claims the company did perform those services, and the company’s work was featured in the appraisal prepared for a former senior lender of the project, court documents state. By mid-December, 2015, those design services were complete, and on Dec. 24, 2015, Frantz Community Investors issued a check to Guru. Court documents did not state the exact amount of the check issued.
When Guru received the check, according to the complaint, either Michael Frantz or Frantz Community Investors requested the company “wait to deposit the check until 2016,” and Guru agreed. But even after waiting, the check, deposited Jan. 8, 2016, was returned as a chargeback on Jan. 13, 2016, according to the complaint.
Now, Guru is asking a judge to award $153,482 for services completed, plus court costs and attorney fees.
Future court dates have not yet been set.2017CV000143 SAC1168663_7751297469766069291-1
I absolutely love the river project. I think it will be an amazing part of the city going forward. But what the holy hell is this? Is there a standard guide for who the city gives this kind of development project to? Who brought this guy on? What was the vetting process?
I get that this is a couple of administrations, but this seems like financial due diligance to know this stuff.
A person has to ask why wasn’t the council show these legal complaints before they were asked to vote on continuing with the Frantz-lead development group? The trouble in Green Bay has been widely reported, and this kind of public information is easy enough to find. The answer is that city hall is broken.
If asked who was responsible for tracking this information down, every department will point the finger at another. The City Attorney’s Office will likely say the Community Development Department never consulted them. Community Development will respond with something like we thought legal services had our back and would have contacted us if they had any concerns. No one take responsibility for not having done the vetting work.
Clearly, at this point, the council should reconsider its vote on the riverfront project in light of the new information.
Beyond that, the city council really should revisit the idea of hiring an administrator so that there is someone who can develop internal processes, assign tasks and hold department heads accountable. The council should not be put in a position where they have to continue to make ill-informed decisions because the collective of unsupervised department heads who run the city cannot agree on how to divide up the work.
Not even in the WDH which is a Gannette paper 90 miles away. This is a critical story.
Keene, with all due respect to you and your experience dealing with the city council, I STRONGLY disagree with you regarding a city administrator. Reason being, what EXACTLY is the freaking job of the mayor……..heck, even the city council for that matter? Aren’t these people elected and entrusted to do the EXACT thing(s) you mention? If they’re incapable or in this instance, sadly incompetent to handle those tasks, they should be replaced and/or major financial commitments like this should be put on hold or firmly halted. Who’s the “Grand Poobah” of this circus? The mayor, correct? I have nothing personal against Mr. Mielke, but it’s quite obvious that he’s nothing more than a deer in the headlights with…….well…..basically everything. It seems that Mr. Schock (sp?) is the one who’s looking to spend like a drunken sailor (with no disrespect to drunken sailors) with NO ONE providing oversight, which again, to me, seems like it sure as hell should be the mayor’s job!
Mark Hadley……c’mon man, you know the answer to your own question! Gannett couldn’t care less about reporting about something “trivial” like out of control spending and/or fiscal responsibility. It’s not in their DNA/talking points.
Dear Call 911 –
It sounds like you are pretty invested in disagreeing, so I’ll be brief.
Let’s start with a couple questions. What are the chances of finding a qualified city executive with 15-20 years experience working in 3-to-5 different municipalities through a mayoral system that confines the recruitment pool to people who are residents of Wausau? How do we hold a mayor accountable to do a good job day-in and day-out when elections only come once every four years?
By contract, if Wausau were to offer a standard, at-will employment agreement to an administrator, we would get at least a dozen resumes from masters-degreed professionals with 10-to-20 years experience. And, we would not have to wait four years to fire him or her if things didn’t work out. In my opinion, an administrator system would do a better job at finding qualified and experienced candidates and of holding them accountable.
I know there are a lot of people who share your opinion. That’s why the referendum lost. You are all happy with the current system. But, remember, the 20-year track record of the current system took us from Linda Lawrence to Jim Tipple to a choice between Robert Mielke and Jay Kronenwetter. If you are indeed generally happy with those outcomes, by all means, continue to oppose hiring an administrator.
On the other hand, if you are generally not happy with things at city hall, tell me what your plan is to make things better?
Keene….Can we stop now? I mean there are some things built, and it looks like a new building is going up. How can we stop? I mean the problem of this is, The Water front is going to be great. (Maybe). But, even now it is is awesome.
Stopping will just feed the narrative that the negativity rules the roost.
Though, I think it would be interesting for a journalist to write a timeline of how the project came to be. a Tick Tock as the cool kids say.
Getting the project done is precisely the issue. To accomplish that, we need a developer who has the resources to complete the work. There is a growiing body of information that suggest this developer may not have the money to live up to all of his obligations. At very least, the council should have this information in front of them before they finalize a devoper agreement with the current vendor or decide to seek someone new
Thanks for the reply Keene. I think that is true of course, but for me I am stepping back and wondering if the institution of the City of Wausau and the entirely separate institution of the City of Wausau City Council can create structures and systems to force or uplift transparency.
I think it is fair to say that the City of Wausau, as an institution with staff and what not, has become entirely separate from the City Council, and the City of Wausau has operated on its own, under what seems to be its own direction and guidelines.
I want to add a comment here, because it seems pertinent. In 2018 there is no reason that the guidelines that score these decisions should not be on the city website. It is not outside of the realm of possibility that actual transparency guide these sorts of decision making times.
What I mean is this, if we can post a Bartender Application online, and pay out parking tickets online, we should be able to see a PDF that is a score template that economic development uses to decide things.
For example, in the village of rothshchild, if you want to rent the Pavillion you have to fill out a packet, and it has instructions, and you work through it. The same for the 400 block.
But, it seems that these waters are murkier. Sometimes I imagine it is be neccessity. Negotiation is negotiation, and business commitments and competition are real and valid forces that should be respected.
But, we keep running into this sort of thing over and over again. How decisions are made? Why they are made? Without a communicated leadership strategy or vision, these tacitical decisions lack any sort of context. If there was an articulated vision or strategy that could be referred back to, these decisions would not seem so arbitrary.
Dino, You’re on to something. The metrics should be standard weighted measurements easy for all to follow. Some of the grading is subjective, but the RFP should specify the vision and intent of the city and how those priorities will be ordered. Additionally, negotiations on this scale should include basic financial qualifications (bank letters of credit) well in advance of gaining a seat at the final table.
As to your question about “can we stop it now?”…. Maybe the guiding principle should be to ask: if knowing what we know now, would Frantz have been the front runner? Would they even be in the mix? If the answer is still yes, then what can we do to salvage them? Delaying now to get our footing is better than finding out when these units are 50% complete that contractors aren’t being paid or running into cost overruns and the project goes into receivership. At that point, the contractors and banks are tied up in court fighting to see who gets paid a few cents on the dollar and the whole time the project languishes.
If Frantz is sincere, pumping the brakes for a few weeks isn’t going to bother them a bit. It sounds like they have some paperwork to catch-up on anyway.
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