By Shereen Siewert
WAUSAU — More than two years have passed since city leaders chose one of two contenders to develop roughly 16 acres along Wausau’s east riverfront. Since then, the process has included a dizzying array of adjustments and changes to the players involved in the project.
Planning for the transformation has long been in the works; the city in 1995 began buying up properties along the river, cleaning up contaminated land and preparing the area for future development. And in 2011, the city purchased the 16-acre parcel currently being developed from MCDEVCO for $2.6 million.
The current project, the first phase of which is now underway, involves adding both commercial and residential buildings to the area and has been the source of some controversy in recent months due in part to changes in developer and financing partners involved and questions about the city’s vetting process for choosing developers.
The most recent change, announced March 27, introduced a new co-developer and financing partner, Rainy Investments, LLC, which will join Mike Frantz’s Quantum Ventures for the project. The announcement spurred optimism among some city council members who remain hopeful that Frantz will succeed in securing financial backing for the project, despite setbacks for projects in Green Bay and Iowa.
After reviewing city documents, meeting minutes, and court records, Wausau Pilot and Review put together this timeline of the project and the project’s principal players, from the time the request for proposals was issued until today.
July 10, 2015: The city of Wausau issues a request for proposals (RFP) to develop the city’s east riverfront.
November 2, 2015: The city’s RFP period closes. Two vendors bid on the proposal: S.C. Swiderski, LLC, of Mosinee and Frantz Community Investors, LLC, of Iowa.
December 24, 2015: Frantz Community Investors, LLC, issues a check to Guru’s of Luxury for $153,483 for work performed on the Northland Hotel project in Green Bay. Frantz asks Guru to hold the check until the new year, according to court documents.
January 8, 2016: Guru deposits the check from Frantz, which bounces, prompting a lawsuit currently pending in Brown County Circuit Court.
February 23, 2016: Wausau chooses Frantz Community Investors (FCI) as developer of the Riverlife project. The Frantz Community Investors team, according to city documents, consisted of Mike Frantz, Tom Frantz, Andy Frantz, Paul Pappgeorge and Mitch Hallgren. Of those, only Mike Frantz is still involved with the project.
June 28, 2016: Ehlers, a consultant for the city, provides a review of the FCI business plan and a set of financial projections performed by Baker Tilly for FCI. The analysis warns city leaders of a potential low level of return on the project; as a result, the final agreement included a shortfall guarantee. The Ehlers report, furnished to all council members, was also critical of high residential rent levels and the city’s 99-year-old ground lease for $1 per year.
July 12, 2016: Final approval is given to the FCI plan.
December 13, 2016: Wausau Riverlife, LLC, is formed by Mike Frantz.
December 19, 2016: City officials sign a development agreement with Frantz Community Investors, LLC, and Wausau RiverLife, LLC, with Mike Frantz signing as manager of both. How Wausau RiverLife, LLC became a party to the development agreement is unclear, and is not mentioned in any minutes or meeting documents on the city’s website.
December 27, 2016: Wausau writes a check to Wausau RiverLife LLC for $290,078.50, which was used to pay five payment requests from Mudrovich & Associates for architectural and engineering designs. There is no mention in the Board of Public Works meeting minutes approving the payment.
July 20, 2017: During a Board of Public Works meeting, Finance Director Maryanne Groat explains to Public Works Director Eric Lindman that all “developer payments are considered by the Board of Public Works, which gives the city attorney a chance to review (them) and the opportunity to review the developer agreement.” Groat explains the payment is based on preliminary costs that Frantz encountered putting together the construction plan. The payments are also meant to ensure that the architectural drawings will become an asset of the city if “the project does not go through,” according to meeting minutes. Lindman then moves to approve “developer payments” to Baker Tilly Capital, LLC for $68,884 and to Ayers for $13,500 during a Board of Public Works meeting. (Note: Neither Baker Tilly nor Ayers is a developer in the project, but rather subcontractors that are being paid directly by the city.) The motion passes.
August 1, 2017: At an Economic Development Committee meeting, Mike Frantz introduces Dave Barker of Barker Financial LLC as his “lender and equity partner.”
August 14, 2017: Frantz Community Investors, LLC, is administratively dissolved, according to Iowa state records.
September 5, 2017: At an Economic Development Committee meeting, Community Development Director Chris Schock asks that the development agreement be amended to include Barker Financial since they are the new partner. It is not clear if city officials are aware at this point whether FCI is no longer a legal entity.
September 7, 2017: Mike Frantz, together with Jason Sharkey and Clay Dougherty, form Quantum Ventures LLC as a South Dakota limited liability company. Sharkey is named as CEO.
September 12, 2017: The city council approves a resolution to replace FCI and Wausau RiverLife LLC with Barker Financial, LLC, as the new developer for the project. MIke Frantz signs as the manager for FCI and RiverLife, withdrawing from the project. David Barker signs for Barker Financial, the project’s new developer.
October 5, 2017: The city holds a groundbreaking ceremony at the site of Riverlife Village.
January 9, 2018: The city council approves a resolution to replace Barker Financial as the developer with Mike Frantz’s new company, Quantum Ventures, LLC.
March 13, 2017: Mike Frantz announces he has bought out Quantum Ventures CEO Jason Sharkey after a Wausau Pilot and Review investigation that revealed Sharkey’s role in a 2006 real estate Ponzi scheme in Denver, for which Sharkey is continuing to pay restitution after a two-year diverted sentence. Frantz also announces plans to expand the commercial development by adding two additional stories to the building, pushing the overall cost of the project to $27 million.
March 27, 2018: In a news release, Mike Frantz introduces Rainy Investments LLC as his new 50 percent co-developer and investment partner.
The project includes incentives of about $2.74 million in grants and loans to support the developer and $2.27 million in infrastructure costs to support the entire riverfront development, including park space and other amenities. All the funds will come from tax increment district financing.
Phase 1 includes a high-end, 52-unit apartment building, a mixed-use space for retail and offices, and two three-unit townhomes. One-bedroom apartments will rent for anywhere from $950 to $1,325 a month depending on the size, number of bathrooms, and whether the apartment is an interior or riverside unit. A two-bedroom, two-bathroom apartment will cost $1,625 monthly for an interior unit and $1,725 for riverside.
The townhomes, which will cost $1,850 a month, will have two bedrooms and 2.5 bathrooms
Some elected officials are openly questioning whether the two Phase I buildings will ever have an assessed valuation of $27 million, as suggested by the developer. In the Ehlers report, the valuation of the combined buildings is estimated at $14.2 million in 2022, based on the same rent projections that Ehlers warned could be too high for the Wausau market to sustain.
But those numbers were calculated and presented before Quantum announced plans to add an additional two floors of space to the commercial building. It is unclear whether a new business plan or projections have yet been completed to support the $27 million figure.
The first Riverlife phase, slated for completion in early 2019, will be followed by additional phases to add more housing and other mixed-use buildings, officials said. The total project could cost between as much as $100 million to build, according to city documents.