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Guest Column: Lien on me, it’s not so bad

in Opinion

by Keene Winters

The city has a mess on its hands with the riverfront project.

For two years, city officials have allowed themselves to be dazzled by would-be developer Mike Frantz’s promises. Funding for the RiverLife Village was always just around the corner.

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

With the filing of some $3 million in liens against the city’s downtown waterfront by unpaid contractors and subcontracts, there can be no escaping the truth. Mike Frantz never had any money and is never going to raise any money. City officials were duped time and time again. It has been painful to watch our elected representatives be so willfully blind to the obvious for so long.

If you cannot be good, be lucky. Despite all of the city’s mishandling of the riverfront project, today might be its lucky day. The liens present a elegant solution to a host of problems. Simply give the 16 acre site to the Samuels Group to satisfy the liens. Hand over the building plans and let a local contractor with experience finish the project.

The land could be used as collateral by the Samuels Group to raise cash, pay its subcontractors and continue with work on the two buildings. Remember, the city paid $2.6 million for the property back in 2011. Since then, millions of dollars have gone into clean-up and new infrastructure on the site. The 16 acres of “clean and green” downtown waterfront property should be valuable enough to satisfy all the liens and to underwrite the initial cash needs of this phase of the project.

Do not get hung-up on holding onto the land. The City of Wausau does not need land, it needs tax revenue. All of the money the city has put into the riverfront project has been borrowed. It needs an income stream to repay the bonds. By placing the land in private hands, the city can not only erase a $3 million liability, but also start collecting property taxes on the site immediately.

With the Samuels Group effectively leading the development, there will be no further role for Mike Frantz or any other developer. As the middleman in the project, Frantz was slated to get a developer fee of 8% off the top of everything. We can do without that expense. Given his non-performance to date and the fact that he already owes the city $372,462.50 for previous advances, Mr. Frantz’s exit should not be that hard to negotiate.

Not only will transferring the land to the Samuels Group make Mike Frantz’s role unnecessary, but it will take the micro-managers at city hall out of the development business. The city will no longer own the land, and that is also one less middleman with hands in the project.

Of course, the traditional tools and incentives for protecting the public interest will remain in place. The city will still have zoning and permitting powers to insure that what gets built is a good fit for the downtown. In additon, the landowner will have property taxes to pay, so leaving the land undeveloped for an extended period of time will not be practical. Together, that is enough to make sure that the property will neither be misused nor unused.

This solution may needs some tweaks, but the framework is sound. For example, instead of turning over the whole 16 acre site, the city could offer 80% of it plus some of the cash that was earmarked for the Frantz development agreement. This way the city could have some land for parkways and public access to the river while providing the Samuels Group with some working capital.

What are the alternatives? It seems like any other solution depends on finding $3 million in a hurry. The city will still own the land and the building plans and will be paying all the contractors. That could potentially turn the riverfront development into a public works project and bring in a whole set of extra rules to navigate.  Suing Barker Financial, LLC, which seemingly had no role in directing project expenditures, and Quantum Ventures, LLC, which has no money, could tie up the project for years.

I have one last thing to say to the city council—particularly the new members. Act now and act quickly to dispense with a major liability and prevent lengthy delays in construction. This is your lucky day.

Do not let Rob Mielke, Chris Schock, Tom Neal and Lisa Rasmussen talk you out of it. For two years, they have had their way, and the result is one of the most significant legal and financial entanglements ever faced by the city.  It is time for new leadership on this project. It is time to get out of the business of owning land and micro-managing developments. It is time to engage the private sector to raise capital and use it wisely. Give the land to the Samuels Group to satisfy the liens.

Then, when this crisis is over, take up the business of hiring a city administrator. It should be clear from this project that Wausau needs a trained and experienced professional to assign work to the department heads and make sure their work gets done. No checklist or set of new procedures is going to be successful at covering all contingencies and averting another crisis. The key to success is hiring someone who knows what he or she is doing and placing him or her in charge.

Editor’s note: The views of our readers and guest columnists are independent of this newspaper and do not necessarily reflect the views of Wausau Pilot and Review. To submit a letter, email editor@wausaupilotandreview.com or mail to P.O. Box 532, Wausau, Wis., 54402-0532.

 

12 Comments

  1. Schock keeps defending Frantz and pushing us to give him advances on payments and stick with him even though he’s shown to be as crooked as a snake in other dealings.
    Schock has been delaying three open records requests regarding his dealing with Frantz on this matter.
    Schock has been caught LYING to the public in city meetings and in neighborhood meetings.

    When will the mayor get some balls and walk Schock out the door for good? Are you scared of him Mayor Mielke? Does he have something over your head or are you just a coward?

    Do you not have the fortitude of a leader to do what must be done with an employee that has been caught lying to the public more than once, breaking the law by delaying open records requests and now has gotten us into a terrible deal that could affect the city’s credit rating and it’s ability to get bids on future projects?

  2. Chris, the point you underscore is important. The city–and Chris Schock and Bob Mielke–have repeatedly over two years made public statements assuring all of us that the funding was in place and Mike Frantz was meeting his obligations. They made these statements while clandestinely paying bills for Mike Frantz as far back as December of 2016. Right up until the Longfellow Neighborhood Meeting on May 7, 2018, they knowingly made false statements that vouched for Mike Frantz.

    The Samuels Group and its subcontractors did work and order materials as directed by Quantum Ventures on credit–in no small part because the city was vouching for the credit-worthiness of Mike Frantz.

    Before the city tries to “play the victim” and sue everyone under the sun, they need to understand their culpability in creating the situation. This long and public track record of lying will surely undermine their legal claims.

  3. At some point we are going to be passed the money, and the idea of the Mayor and the ED boss knowingly misleading people. Is this not the real issue, credibility?

  4. Dino, I agree with your observation. I think it is an important factor right now and is an issue that has to be tacked later. For two years, Mielke and Schock kept assuring the public that the financing structure was in place and that Frantz had money. They did this right up until May 7, 2018, despite having ample evidence that the contrary was true.

    Meanwhile, the Samuels Group and its subcontractors granted Frantz credit and kept on working for months, believing they would get paid, and being reassured by city officials that they would get paid.

    So, to the extent that Frantz misrepresented his financial situation to the general contract, city officials played a huge role in covering for him–even paying his bills under-the-table.

    That is why I believe the city is in no position to start filing lawsuits and claiming to be the aggrieved party when they essentially acted as Frantz’s co-conspirator. They made it possible for Frantz to string Samuels Group along.

    Mielke and Schock’s repeated misrepresentations of what they knew have put the city in legal and financial jepoardy. Ideally, there would be some accountability for that. But, my guess is that the mayor will protect Schock, and in two years Mielke will be re-elected just like Tom Neal was re-elected. There are suprisingly large number of people who will vote for their tribe, regardless of the issues.

    • Keene, Have you as a citizen spoken directly to Bob Mielke about these matters… and who do you arrive at all your decisions about who is responsible???
      Are you dedicated to seeing this issue settled, dedicated to giving away public land. or just looking forward to the next election?
      I await a response!
      John

  5. I think that it is naw apparent to everyone that Mr. Frantz is like they say in Texas, “All hat and no cattle.” And if Chris Schock had an IQ higher than his shoe size he would have recognized thst fact. My God, Stevie Wonder could have seen through Mike Frantz. I think Schock let his ego get in the way of common sense.

    • Amusing Stan… insulting a person as not having cattle, challenging another person’s shoe size, and suggesting that blind people can see through a business person and forgetting that common sense isn’t all that common – WillRogers

      • So you never heard of any body with a name of Stan.

        John you are a typical liberal. If someone have a different view of a matter than you, they must be a troll. Pathetic. You are a sad little mam.

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