More news. Less fluff. All local.

City issues formal response after Riverlife Village hits legal snag

in News

By Shereen Siewert

WAUSAU — One day after millions of dollars in construction liens were filed in connection with the troubled Phase I of the Riverlife Village development in Wausau, the city has served a notice of default on the project developer.

In a prepared statement, Mayor Robert Mielke and Economic Development Director Chris Schock restate their commitment to the project but caution that the mayor and council will “take whatever action necessary to protect the city’s interests.” The city will also issue a new request for proposals shortly seeking interested developers to take over the project or propose a new development in the event that Barker does not resolve these defaults.

Wausau Pilot and Review broke this story Monday morning after obtaining letters of intent to file a lien issued by the project’s prime contractor and one subcontractor that were received by the city in April. The city was served with those papers because Wausau owns the land, City Attorney Anne Jacobson said. The letters are public record.

On Monday, The Samuels group filed four liens against the project. Two liens totaling $2,797,153.10 are filed naming Quantum Ventures, LLC, which now lists a Milwaukee address, while two separate liens for the identical amount are filed against Barker Financial, LLC, with an office in Iowa. Wausau Pilot and Review initially reported that liens totaled $5.5 million but has now learned the liens against each LLC are identical, leaving the amount owed as $2,797,153.10.

PGA could file liens as early as May 28.

Mielke did not say why Schock, as recently as May 7, assured residents that the project’s financial stack was in place and on track, telling members of the Longfellow Neighborhood Group construction was about to resume, even after letters of intent to file a lien were in hand. The city council on May 8 went into closed session to discuss their legal strategy in the matter, but took no action at that time.

The city has so far funded $372,462 toward the project, an amount for which the city has a “personal guarantee” in place by Mike Frantz of Quantum Ventures, Jacobson said.

Some council members said they were surprised to learn that Barker remains the developer of record on the project, believing instead that they approved Quantum Ventures as a new developer in January. Prior to the vote, Schock told council members in open session that Barker was only meant to provide gap financing for the project and was withdrawing for that reason, a point he also made in two separate emails to Wausau Pilot and Review.

But Jacobson explained that the action the council took in January followed the resolution included in the packet: “BE IT RESOLVED, that the Mayor and other proper city officials are authorized and directed to work on behalf of the City of Wausau to amend the existing development agreement and groundlease to include Quantum Ventures.”

In their statement, Mielke and Schock said they would prefer that Barker resolve the defaults and ensure payment to the contractors involved, but “will not excuse” those defaults. Instead, they stated, the city will “actively work to protect the future vitality and interests of Wausau.

Riverlife: A Timeline (So Far)

Nearly three years have passed since the city first issued a request for proposals to develop the roughly 16-acre parcel 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.

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 add Mike Frantz’s new company, Quantum Ventures, LLC, as part of the development team.

March 13, 2018: 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. No mention is made of Barker Financial.

April 10, 2018: The Samuels Group, the prime contractor for Phase I of Riverlife, sent letters of intent to the city of Wausau indicating an unpaid debt of $1,785,885.89 incurred in the project, according to City Attorney Anne Jacobson. The city is given 30 days to cure the debt.

April 28 and May 4, 2018: PGA Inc., a subcontractor working on the project, sent letters to the city of Wausau claiming they are owed $134,149.

May 7, 2018: Economic Development Director Chris Schock tells the Longfellow Neighborhood Group the Riverlife project is on schedule and work will shortly resume.

May 8, 2018: The city council goes into closed session to discuss legal strategy on potential action involving Phase I of the Riverlife Village project. No action is taken.

May 14, 2018: The Samuels Group, Inc. files four liens totaling more than $2.7 million against the project in Marathon County Circuit Court, naming both Barker Financial, LLC and Quantum Ventures, LLC.

May 15, 2018: The city issues a notice of default to Barker Financial and vows to issue a new RFP for the development project in the near future.

Latest from News

Go to Top
%d bloggers like this: