By Shereen Siewert

WAUSAU — City council members on Tuesday met in closed session to discuss legal strategies for an expected lawsuit involving phase one of the Riverlife Village development.

Little is known about the expected litigation, as council members are prohibited from disclosing matters discussed in closed session to protect attorney-client privilege. No official action was taken after the meeting.

Riverlife Village has been closely scrutinized in recent months amid a flurry of changes in plans and financing partners. Construction, which had been underway, appears to have stalled even as plans to add two additional space to one of the buildings is in motion. 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, all of which will come through tax increment district financing.

To date, no lawsuits have yet been filed involving Riverlife itself. But court records show Frantz is named in three open civil cases in Brown County Circuit Court, all of which are connected to his role in the troubled Hotel Northland project in Green Bay. Frantz’s Walworth County home was also in foreclosure, but that case was dismissed March 1.

In November 2016 in Illinois, Frantz was sued for breach of contract in federal court by two former business partners, Gregory and Carol Hammann, who tried to recoup nearly $4 million Frantz owed after allegedly failing to repay a promissory note. The couple claims that Frantz paid only $120,000 of the balance, money which was allegedly part of a real estate investment. The lawsuit was dismissed on a technicality.

One month after the lawsuit was filed, Frantz formed a new LLC, Frantz Community Investors, and signed with the city to develop the Riverlife Village.

Since the original agreement was signed, the players have changed several times. One partner — Barker Financial — withdrew from the project in January and was replaced by Quantum Ventures, a new LLC formed in South Dakota.

On March 13, former Quantum Ventures CEO Jason Sharkey pulled out of the project 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. Days later, the state Department of Revenue filed a delinquent tax warrant in Milwaukee County Circuit Court against Sharkey for unpaid income taxes of $32,374, according to court records.

Then on March 27, Frantz introduced a new co-developer and financing partner, Rainy Investments, LLC, to join 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.

13 replies on “Council discusses potential Riverlife Village litigation in closed session”

  1. Holy Helen.
    The word that comes to mind regarding Council’s handling of this entire matter, from its inception, is ‘malfeasance’.

  2. I feel like the shine has come off the Economic Development department penny. This never ends, and appears to have no consequence for anyone involved.

    1. Having lost an election largely on the issue of negotiating projects and the vetting process, I don’t think enough people are connecting the dots between the council committee system and bulldozers sitting idle on the shoreline.

  3. If the rumors are true and a vendor is suing for not being paid by the developer then the city may have painted itself into a corner. According to city documents, on December 27, 2016, the City of Wausau paid Wausau RiverLife, LLC, another LLC formed by Mike Frantz in December of 2016, $290,078.50, so the developer could clear a backlog of five separate invoices to Mudrovich Architects. Then in July of 2017, the Board of Public Works authorized payments to Baker Tilly and Ayers Associates directly for bills the developer had not paid. There is some evidence to suggest that the Baker Tilly invoice was approximately one year overdue at that point. In sum, the city paid $372,462.50 in bills that probably should have been paid by the developer.

    Now, if another unpaid vendor emerges and Mr. Frantz’s LLC has no money and the building is on city-owned land, how will the city argue that it does not have to pay this latest vendor?

  4. I sat behind Mr. Frantz at the March 27th Finance Committee meeting. He introduced the new Investor, Rainey Investments, another investor with little background information. He also said he stopped work on the project the last two weeks (work stoppage March 13) until financing was in place and there was “lots more engineering than anticipated with the addition of two more stories.” Mr. Frantz said he was planning to resume work on the project in the next week which would have been April 3rd. I drove by the project May 1st because there had been no update about financing the project,and the fence was still locked and no work being done. Guess this whole fiasco isn’t any surprise to me and shouldn’t be to Mr. Neal, chair, Economic Development Committee, Ms. Rasumussen, chair of Finance Committee and Mr. Schock, Economic Development Director. How many thousands/millions of dollars have City of Wausau taxpayers put into this project and no progress in the last two months and more expenditures to come? Sad!

  5. Until ANYONE is held accountable for ANYTHING regarding this financial pig of a project, this WILL continue. Seriously, are any of us surprised? Who exactly does Neal, Rasmussen and Schock answer to? Answer…….NO ONE. THAT is problem number 1.
    God, how I’d LOVE to spend other people’s money with ZERO consequences. What a “job”, huh?

  6. So this project APPEARS to be troubled. I do not know if that is accurate, because the waterfront is amazing, and WOW is amazing, so those positive things have happened. I do not even need to see a building go up, heck, I say just put down some grass, and build a second skatepark, and finish the other pieces of the park, and let it go. Clearly this developer, from all the consternation, is not going to get this together, right? So, let us recoup our monies through legal actions, lets have an audit of the processes in the Economic Development offices that got us here BY AN OUTSIDE AGENCY. And then figure out what happens next.

  7. I think it would be worth it for the Wausau Pilot and Review crew to look into the actual financial state of the City of Wausau. What Economic Project have in fact been completed? What projects in general have been completed? So, what happened to Liberty Mutual? What is happening with Thomas Street? What is happening to the mall? What about the movie theatre? The WEDC grant? It is fair to ask about these things, and it is fair to expect an answer on them from both city staff and elected leaders.

    I think the Chairs of FInance and Economic Development OWE the taxpayers an explanation. There names appear in stories like this often, and they rarely are quoted with anything more than a platitude (if that).

    I also think it is important to compare the financial state of the City of Wausau with the surrounding municipalities. Or even Oshkosh, as was the wont for a time. It appears that the City of Wausau will remain in long term operational debt in the tens of millions of dollars, and this is an economic driver for the entire region. Combine this with the fact that state dollars are going to continue to go down, and Wausau faces some real troubling future indicators.

    While it is true that this Mayor inherited a bit of a nightmare from the prior Mayor, this Mayor has apparently emboldened his staff to drive the City of Wausau taxpayers down this road to increased long term debt, and diminished bond rating. The apparent lack of oversight created in the Economic Development department (which exists because the committee has altered the process, a de facto admission that it was flawed AND the staff did nothing about it) has brought us to this point.

    And no one seems to want to articulate a vision to move the city out of this situation. It becomes important for the City which claims to value transparency to articulate a vision for changing this course.

  8. Dino Corvino has summed up the Riverlife Project correctly. Only cities MUCH larger like San Antonio TX will consider putting $100 million into a Riverfront Project. They have the population to support such a development. I’m shocked that the taxpayers of Wausau AND the City Council except for Becky. McElhaney and Dennis Smith remain quiet when the city’s bond rating is down graded because of the debt load the city is carrying. Mr. Schock apparently has free rein in Economic Development to propose any project at any cost, supported by a Mayor who hired him and a City Council who will vote for it.

  9. The troubled Economic Development department MUST be acknowledged at this point. Even if the council does not want to speak to this, their actions indicate that there is a problem. Just recently ED committee changed the process and information gathered for ED projects. This shift, and the timing of this shift, is a de facto acknowledgement that trouble existed, that information was not collected, worse that no one thought to collect this information.

    This is made exponentially worse by the fact that until this point, the perception is that none of the paid ED staff considered the change. Meaning, they never thought to ask these questions, it took years worth of trouble for this to even be a thing. This lack of action does call into question the judgement of this department.

    I have made my bones on this and other forums posting over and over and over (all the damn time) about the City of Wausau and the lack of actual communication strategy making things worse. I had worked under the impression that everything was fine, but people just did not understand it, that the city just did not communicate it. But, we are at a point now where even I have to acknowledge that everything does not appear to be fine. That structures appear to be broken or not current with the times. And while Mayor Mielke has overcome a lot of the troubles left behind by Mayor Tipple, he clearly has not done a good job leading this city.

    Even if we look at ONLY these issues…

    1. The Movie Theatre
    2. The Mall as a Whole
    3. Thomas Street
    4. WEDC situation (it seems small to many, but I think it is a giant deal)
    5. Riverlife
    6. Bond Rating
    7. Long Term Debt

    These things are part of the Mielke administration. I am a pretty solid consumer of municipality news, and have not seen much mention of these things, either in acknowledging the issues as operationally troubled, or worse a plan to move through them.

    To repeat, Wausau is the economic driver of Central Wisconsin, and for me the lack of articulated plans to fix the troubling state of things can only be seen as a detriment to surrounding municipalities and the County as a whole.

    The City of Wausau has a great new crop of Council members some of whom I know personally. It is my hope that these new lions will come in quickly and change the directions of the lasez faire council and committee work that has marked this council.

    Until that happens, I hope Tom Neal and Lisa Rasmussen and Mayor Mielke and Chris Shock will make themselves MORE available to the Wausau Pilot and other media outlets locally to explain the situation we fine ourselves in today, and not simply dismiss criticism as uninformed negative nancies harping on the good public servants of the council and staff for our own agendas. To use the parlance of the day, these criticisms are not “fake news”.

  10. Once the Riverlife financial and legal liabillities that could drag on for years comes to light, I hope there will be changes at city hall with Chris and Maryanne departures and resignations from Neal, Rasmussen and the mayor since they all have lead the way with the rosy overpitching to fellow council members and to the 39k Wausau residents (the stockholders of the city) and the lack of fiduciary oversight….which is malfeasance in office IMHO. Why should Wausau residents be forced to start a recall. These leaders should save the city further chaos and resign.

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