By Shereen Siewert
WAUSAU — Wausau City Council President Lisa Rasmussen is calling for changes in the city’s vetting process for development partners amid revelations about the troubled history of a key player in Wausau’s multi-million dollar Riverlife Village project.
Wausau Pilot and Review broke the story early Monday, which has since been picked up by other local media sources. Longtime Denver Post reporter Kirk Mitchell worked closely with the Pilot and published a story in the Post hours later.
The Pilot investigation, prompted by a Google search and verified through a number of paid background check services, court documents, and interviews, revealed that Jason Sharkey, who is the CEO of Riverlife developer Quantum Ventures, was charged with securities fraud for his alleged role in an $8.3 million real estate Ponzi scheme while he lived in Denver.
The Pilot undertook an extensive week-long investigation into the matter to ensure the two men were one and the same prior to publication.
During a meeting Tuesday of the city’s economic development committee, Rasmussen called for city officials to take stock of processes that ensure development partners are well-chosen.
“We should have better intel than an investigative reporter has,” Rasmussen said. “Vetting needs to take place before (a project) gets here.”
During a radio interview Wednesday morning on WXCO, Mayor Rob Mielke said the allegations caught the city by surprise, referring to Sharkey as an “investor” in the project.
“When the city does do development deals, there is thorough vetting, if you will, of the developer,” Mielke said. “But in the past, we haven’t investigated or done any background checks on the investor. As of yesterday, that will change.”
Economic Development Director Chris Schock, during Tuesday’s meeting, also referred to Sharkey as an investor in the multi-million dollar project, a portion of which is being funded through taxpayer dollars.
But city documents show Sharkey isn’t an investor, he is the CEO of the development firm in charge of the project, Quantum Ventures. The two roles — developer and investor — are distinctly different.
A developer is generally someone who develops new real estate properties from the ground up with the intent of selling these properties for a profit. An investor is someone who invests their money into the project. Quantum took over as developer in January.
A review of court records shows Sharkey served two years of probation during a diverted sentencing agreement. As part of a plea deal, he agreed to pay nearly $900,000 in restitution and interest in exchange for the criminal charges to be dismissed. He now lives in Wisconsin, where he continues to pay back the victims in the case. In a statement, Sharkey said that he and his wife were actually victims in the fraud, losing about $134,000 to his former employer, who has since fled the country.
Two members of the public spoke out at the meeting including former Marathon County Board member Joanne Leonard, who urged the city to rethink the entire project.
“It’s time to go back to the drawing board,” Leonard said. “We hear a million dollars has been spent, but there’s no documents. Whose money is that?”
But Schock said the project has so far met its benchmarks, and the city does have the ability to choose a new developer should that change in the future. Schock said he participates in weekly phone meetings to stay up-to-date with the project’s progress.
Sharkey, along with Quantum partners Clay Dougherty and Mike Frantz, are expected to appear at a meeting Tuesday to answer specific questions from council members and the public about the project.