By Shereen Siewert

WAUSAU — Three council members have spoken out following revelations about the troubled history of a key player in Wausau’s multi-million dollar Riverlife Village project.

The story, which included reporting supplemented by longtime Denver Post reporter Kirk Mitchell, broke early Monday and revealed that Jason Sharkey, who is the CEO of Riverlife developer Quantum Ventures, was charged with securities fraud for his role in an $8.3 million real estate Ponzi scheme. Midway through his two-year diverted sentence, Sharkey moved from Denver to Milwaukee. More than a decade later, he continues to make monthly restitution payments to his victims, according to Colorado court records.

As the story broke, city officials circulated an email from Quantum Ventures’ Strategic Engagement Advisor Clay Dougherty that stated the newspaper is “intent on using this story to discredit Jason Sharkey and Quantum Ventures work in Wausau.”

The Denver Post published a story of their own about the project on Monday.

Sharkey, 41, acknowledges his criminal case in Colorado, but explains that as the regional vice president of a Canadian real estate venture, he too was a victim of the elaborate fraud. He said he and his wife lost $134,000 in the deal.

“I never knowingly lied about the fund,” Sharkey said in a written reply to a series of questions from The Denver Post and Wausau Pilot & Review. “I fully cooperated with the state of Colorado in this matter as I did not knowingly take investors’ money for a fraudulent fund or intentionally try to steal money from the company or investors.”

Wausau Pilot and Review reached out early Monday to all city council members along with Mayor Rob Mielke, Economic Development Director Chris Schock and City Attorney Anne Jacobson with an invitation to weigh in on the matter. Schock had previously commented for the story.

Three city council members have so far responded.

Council member Becky McElhaney said she voted against approving Quantum due to what she sees as a lack of due diligence that was completed and a lack of information about the financial feasibility of the company.

“The only information put before council regarding Quantum’s financial standing was a statement by Mr. Frantz stating Mr. Sharkey has “deep pockets.” The cascading legal and financial problems shown by court records associated with both Mr. Frantz and Mr. Sharkey proves to me my vote was the correct one,” McElhaney wrote. “My expectation is for the ED Committee and Council to demand due diligence determining the true financial and legal status of all partners in the Riverlife project safeguarding the taxpayers.”

Council member Dennis Smith also had strong words for the city.

“I have no idea as to why the city has turned a blind eye to past, and possible, future problems with the financing for the Riverlife project,” Smith wrote. “I can only put it down to the city’s obsession with building a city within a city on the bank of the river that is only navigable for a few hundred yards south.”

City Council President Lisa Rasmussen said she is waiting to comment more until after the economic development committee meets. The committee is expecting an update on the project during the meeting, which is slated to begin at 5:15 p.m. today at Wausau City Hall.

“The city’s development agreement does contain strong safeguards for our public gap financing arrangement prior to any fund disbursement, which are needed regardless of who is involved given the project size,” Rasmussen said. “The committee will have questions tomorrow for those involved and we will expect answers, as we have at various stages.”

The Riverlife development is one of a string of projects slated for an update during the meeting, though there is no documentation on any of the projects included in the committee’s online packet. Rounding out the list of updates expected Tuesday night: Westside Battery, Sears, Great Lakes Cheese, Wausau Chemical, Savo Supply, Scannell, Brownstone projects, Urban West development and Liberty Mutual.

In his email regarding the Riverlife development, Dougherty reassured city leaders that the organization remains confident that the issue will not have an adverse impact on securing financing for the project, which is now underway.

“All potential equity partners and lenders are already aware of this matter and it has not adversely affected discussions with them,” the email states.

Wausau, too, is an equity partner and lender for the project, as a portion of the development project will be funded in part by city money. The city’s commitment includes about $2.75 million in grants and loans for the first phase of the project, which is expected to cost about $20 million to complete.

To date, the city has funded $372,462 toward the project as part of a pre-development loan, according to Finance Director Maryanne Groat. The bulk of that number, $290,078.50, was paid to Mudrovich Architects of Wausau for design and engineering costs.

Photo: Mudrovich Architects