by Keene Winters
Would a rose by any other name smell as sweet? Maybe or maybe not.
Certainly company names can be deceiving, sometimes lending an aura of respectability and gravitas where none exists. So, it is time to put away the series of limited liability company (LLC) names like Frantz Community Investors, Barker Financial and Quantum Ventures and speak plainly.
The Frantz Identity: Mike Frantz has emerged as the sole developer and financier for Wausau’s east riverfront project. He is the one constant among these shifting entities. With that in mind, the city needs to find out in short order whether he can do the job.
Believe it or not, it has been two years already since the council chose Mike Frantz and his firm to be the developer. The city’s financial stake in this project was borrowed in April of 2016, and the city has been paying interest ever since. In my estimation, Mr. Frantz should have assembled the team and the money to carry-out this project by now. Let’s find out if he has.
The Frantz Ultimatum: By March 27th, Mr. Frantz should be required to deliver the following:
- A list of the equity investors and lenders and how much each is contributing.
- A bank statement for Quantum Ventures, showing a reasonable amount of operating cash.
- The updated business plan with the two extra floors in the mixed-use building.
- A furnished and staffed business office for Quantum Ventures.
Is not some of this confidential or proprietary? No, the city is a partner in the deal, and it gets to know who the other partners are and what they are bringing to the table.
The updated business plan is key. It should including the two additional floors on the mixed-use building that we just learned about. The plan should then be sent to professionals for an independent analysis. Is it realistic? Are the projected returns sufficient to attract investment? Does the estimated income support the projected building valuations?
Quantum Ventures needs its own checkbook. One of the lawsuits Mr. Frantz faces in Green Bay stems from co-mingling assets. His Northland Hotel, LLC, did not have the money to pay a vendor. To fix that, court documents say Mr. Frantz promised the vendor from his other LLC, Frantz Community Investors. That check bounced, and the vendor is now suing Northland Hotel, LLC, Frantz Community Investors, LLC, and Mr. Frantz personally for payment.
We do not want multiple LLCs paying vendors in Wausau. It just muddies the water in who is contracting with whom. The city should demand that all project revenues and expenses run through one cost center, Quantum Ventures, that can be audited. There is no reason for this bank account not to be up and running.
The Unresolvable Problem: The situation in Green Bay casts a long shadow over Wausau because it is ongoing. The Northland Hotel, LLC, still cannot pay its bills. People who did work on the project did not get paid. Mr. Frantz is involved in trying to revive and recapitalize the project. He is the defendant in lawsuits. In my opinion, it has wounded his reputation and will adversely affect his ability to raise money for the foreseeable future. It is also hard to believe that it will not continue to be a drain on his attention and his financial resources for some time to come.
In the end, Mike Frantz is just one guy. Maybe it is time for him to let go of the Wausau project and focus his energies on making things right in Green Bay.
Of course, that decision should not be left to Mr. Frantz alone. If after two years he cannot show us that he has assembled the money and the team to start construction, then I believe that the city needs to move quickly to cancel the development agreement. Wausau deserves a developer who can give its project his or her full attention. Giving him more time to pull things together would be foolish.
Bench the Cheerleader: As for Community Development Director Chris Schock, I believe he bears primary responsibility for not following the basic procedures established by the City Board of Public Works for vetting vendors and contractors. In my opinion, he has also overstepped his bounds as a member of staff to become an effusive advocate for Mr. Frantz at every step along the way. Now so much of his ego and reputation is tied up in the project going forward with Mike Frantz that citizens cannot reasonably expect him to be an unbiased protector of the city’s interest. To revive public confidence, the mayor should remove the riverfront project from Mr. Schock’s portfolio and assign it to another department head.
Double-Check Everything: Given all that has happened, the city should be extra vigilant going forward. For example, we have read about Jason Sharkey in the Wausau Pilot and Review and his involvement in a Denver real estate Ponzi scheme. We have also heard Mr. Frantz’s spirited defense of his friend and former partner. Which is true?
There is no need to wonder. Have the City Attorney read through the court documents on Mr. Sharkey and brief the council in closed session. Seriously seek the truth.
Similarly, if Mr. Frantz produces letters of credit or lists of equity partners, follow-up by calling all of them. Trust but verify. Check everything out. There is no excuse for city officials to drop the ball on background checks again.
Accept No More Excuses: The action plan is simple. Demand documentation now. We have one guy who has emerged as the developer and financier. After two years of promises, Tuesday, March 27th is the night for Mike Frantz to prove that he has what it takes to complete the project. Show us the bank account and the money or let Wausau move on to a new developer.
Editor’s Note: This is one in a series of opinion editorials by Keene Winters on decision-making at City Hall. Winters served as an alderman in Wausau from 2012-2016. Opposing viewpoints are welcome; email guest editorial submissions and letters to the editor at [email protected].
