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Guest column: A tale of two stories

in Opinion

By Keene Winters

This is a tale of two stories. What are two stories worth and which story do you believe?

Keene Winters served two terms on the Wausau City Council from April 2012 to April 2016. (Photo credit: Life Touch)

Back on March 13th, Mike Frantz announced that he would be adding two stories to the proposed mixed use building in the east riverfront development. That got me wondering about which of the two stories most readers believe? Some are in the camp that believes the riverfront project is meeting its deadlines and on-track to be wonderful. Others believe that there is neither a plan nor the money to move forward.

The surprise announcement of the additional floors was greeted as good news by people in the first camp. Mr. Frantz told the council that the addition would raise the value of the project’s taxable real estate from $23 to $27 million. People in the second camp were left wondering how such extravagant numbers could suddenly spring into being. It was either the best of times or the worst of times, depending on who you spoke to.

As a practical matter, it should be noted that this major change order creates some impediments to the project advancing. It means there will have to be both a revised building plan and a revised business plan.

The revised building plan needs to be completed and filed with the state before construction can begin on the mixed use building. Unfortunately, state filings can get backlogged this time of year because everyone is getting ready for construction season.

Moreover, at least a basic program statement or some precursor to the revised building plan is needed to complete a new business plan. There has to be some list of the rentable spaces to project gross income and information about the square footage to project parts of the operating costs.

The business plan, in turn, is critical to raising money. Equity investors (i.e., owners) will want to know what the buildings will be worth. The market value of commercial buildings is based on the income it can generate for its owners. Lenders will be curious not only about the value of the asset as collateral, but will also want to see that the property can generate sufficient cash to stay in business and make its loan payments.

Has anyone seen any revised plans yet?

Based on my reading of source documents, it is my opinion that a revised business plan that supports a real estate valuation of $27 million would be hard to construct. The sizes of the buildings are fixed, and they are unlikely to be able to produce materially higher rents than contemplated in the original business plan.

Here are the data I see. In its June 28, 2016, analysis of the original building business plan, the city’s financial consultants, Ehlers, used a capitalization rate of 8.5%. A capitalization rate or “cap rate” is a term used in the valuation of commercial real estate. It is defined as the net operating income of a property divided by its fair market value. Knowing two of the inputs of the equations allows a person to solve for the third.

In this case, Mike Frantz promised an assessable property value of $27 million with the two additional stories. If we multiply that number by 8.5%, we get an expected annual net operation revenue of $2.30 million ($2,295,000 to be exact). That fills one blank in the table below.

Without the additional floors, Mike Frantz said the buildings was worth $23 million. Multiply that by 8.5 percent, and we have a second number for the table.

Those figures are higher than in 2016 Ehlers analysis. It placed net operation income for the apartment building at $715,247 in 2022 and income for the mixed use building at $491,288. Together, that totals only $1.20 million. Keep in mind that the consultants also went on to express concern that the rents used in that model were too high for the Wausau market. That makes me skeptical that rents can go much higher—and certainly not 50%-to-60% higher.

We can make a rough adjustment to the Ehlers numbers for two additional floors on the mixed use building and round out the table.

Using the cap rate, it is possible to convert the numbers back to building valuations. Again, the recent numbers are significantly higher than what was projected in the original business plan with or without the two additional stories.

So, who is a person supposed to believe?

These new numbers have been out for a month without any documentation to back them up. By the end of April, Mike Frantz should provide the City of Wausau with a revised business plan, and the city should turn it over to its financial consultants for a professional evaluation. Such a significant change to the project’s plans should not go this long without explanation.

Unfortunately, getting the silent treatment from their city government is nothing new for the citizens of Wausau. It happened after the city borrowed money to give to CBL & Associates to save the mall. It happened after the city bought the Sears building to give to Micon Cinemas. I have a bad feeling that we have been here before; the silence means there is no good news to report.

This controversy has a simple solution. All that is required is for Mike Frantz and the city to “come clean” to the public about what is going on and do so immediately.

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


  1. The city needs to be totally transparent in all its dealings no matter if it financial or not. That’s what our elected officials are there for or we would have a dictatorship.

  2. The word on the street is that it is possible tha the latest investor brought on by Mr. Frantz has withdrawn. That could surely slow things down a bit.

  3. Now, it is a waiting. We will see what happens next. In the mean time, no good excuse has been offered for the absence of key planning documents or the general lack of transparency. That gives rise to concerns that the secrecy is necessary to cover-up what is not going well.

  4. Boys and girls, The river front project is moving right long, Keene you are using the wrong story… is is not about the French Revolution or A Tale of Two Cities
    by Charles Dickens, you are conflating honest and straight forward city government with The Crucible is a 1953 play by American playwright Arthur Miller. It is a dramatized and partially fictionalized story of the Salem witch trials that took place in the Massachusetts Bay Colony during 1692/93. Miller wrote the play as an allegory for McCarthyism.

    I know you were in this play in the past, but it is time to move on and cut the unfounded accusations. I think you can talk to the Mayor and Council Members and staff at the city and get reasonable and honest answers… but remember to be civil this time Keene, many take umbrage with your highhanded manner and supercilious tone. I still am available to talk this over with you as I said… the offer is still on the table Keene. You have some good ideas and insights that we can share… but not by being a bully…

    So the river project is in the works and on schedule, negotiations continue, the problems on the Westside and the pollution have been and are still under investigation and replacing the dirt will work and we need to work together.

    But if you have another agenda, then that is up to you… I am looking for fair dialogue and solutions…

  5. “Boys & Girls” isn’t that a little demeaning a John? Also, what special “insights” can you offer on the situation. Are you blessed with some special talents that gives you a leg up on the goings on concerning this project. Are you privy to some inside information thst was provided only to you. I think not!

      • I manually approve every first-time commenter, but after you’ve been approved once your comments should register without moderation. I don’t see any that went into the spam folder, so if your comment didn’t register and you’d like to post again, please do.
        The only comments I take off are those that are either potentially libelous, contain profanity, or contain some sort of threat. Otherwise, no, we do not censor comments and have not deleted any of yours on our end. Thanks for commenting.

  6. Shereen, Thanks. I agree that comments should be civil, truthful, respectful, and thoughtful… when in doubt…. I do research and go to the sources… I love Wausau as much as you do… we can disagree without being disagreeable… and that is why I use my name and stand behind what I say… just like you do, George, Dino, Mark, Keene…
    Stay safe during this latest snow storm… FYII asked the Mayor about it and he said that he couldn’t control the weather!

    • Thanks, John. I think it is important to note that there are differences between what is journalism and what is opinion. Guest columns are not journalism; they are opinion. That said, I strongly believe that they add value to the conversation by asking questions and presenting viewpoints. Journalism, in its best form, should always rely on much more than opinion or “someone who’s in the know said this so it must be true.” Asking is fine, but it only goes so far. Solid journalism relies heavily on documents — things that can be proven. Our hardest hitting stories are often reviewed by a media attorney before publication. Sure, we’ll ask city officials about projects or contracts or toxic soil or whatever the story of the day is.
      But then, we verify.
      If we publish a story that we later find out is wrong, we will correct what’s wrong and add an editor’s note bringing attention to and explaining the error. Guest columns are a completely different animal. That’s why they carry an editor’s note at the end. Opposing viewpoints are always welcome. City Hall officials – from the mayor to Mr. Schock to all city council members – have repeatedly been offered the opportunity to submit columns of their own, weighing in on the issues that the city is facing, and that door will always remain open. We welcome guest columns and letters to the editor (not just from officials, but from readers) about any and all of these subjects, and because we are not a print publication, we’ll publish them ALL, at any length, as long as they aren’t anonymous. (You’re welcome to write one, too.)
      Thank you for contributing to the conversation!

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