by Keene Winters
Have you heard? Wausau’s riverfront development project is back on track and construction should resume soon. That information comes from to city officials speaking through a press release to another publication.
The city has given Mike Frantz and David Barker until mid-August come up with the money to move forward. If they do not, the city anticipates having names of new developers at the ready from their request for proposals, which is due in August. It is another “bullet-proof” plan from the City of Wausau’s economic development team. What could go wrong?
Perhaps a better question is what is the probability that things will go right? It is theoretically possible that things could work out. However, there are a number of complications that are likely to transcend mere wishful thinking. A short list of the challenges follows:
Financing by Frantz: Historically speaking, Mike Frantz has not been able to put together an investor group to pay his bill here or in Green Bay in 2016 or 2017. What are the odds that he will come up with money in the next six weeks? His legal and financial woes are many, and it is hard to imagine that lenders and equity partners are lining up behind him.
The White Knight Developer: The original project got only two bidders, Frantz and S.C. Swiderski from Mosinee. Now handicap the project with legal challenges and calculate the odds of getting multiple proposals from qualified bidders? Given the availability of many other unencumbered projects for developers to choose from, it is hard to conceive that this one would make their short list without massive subsidies and guarantees.
Pesky Legal Conundrums: First, there is the question of who is responsible for paying the subcontracts. This project is going nowhere until the liens are lifted. Remember, the city voted to replace Barker Financial with Quantum Ventures back on January 9th. However, the paperwork never got executed. That muddies who is responsible.
In the intervening time, it has been Mike Frantz of Quantum Ventures that has been directing the activities of the subcontractors and in the newspaper giving the city updates on construction activity. Barker Financial played no apparent role. So is it feasible to hold Barker Financial liable for the $3.2 million? Quantum Ventures has no money, so it is not coming from them. This could take a while to sort out.
More importantly, the city very well may have some liability too. There is a legal doctrine called “unjust enrichment.” The liens are on city property. The improvements were constructed on city property, enriching the city. City officials knew Mike Frantz had no money because they paid his overdue bills for him in 2016 and 2017. Yet, they never cautioned the subcontractors. To the contrary, city officials made multiple public statements that the developer’s financing was falling into place, in effect encouraging the subcontractors to continue to work on credit. If the subcontractors are not paid by one of the two developers, they may have a case that the city lead them on and profited unjustly from their work.
Being positive is laudable. But, the Pollyanna platitudes coming from the Mielke administration seem more directed at concealment rather than any credible attempt at reassurance. In one particularly egregious example, city officials mislead the Longfellow Neighborhood Association about the status of the project. On Monday, May 7th, during the day, they posted an agenda for Tuesday, May 8th, to brief the council that liens would be filed shortly. That same evening they assured the neighborhood association that construction and financing were on track, despite having been in possession of letters from the subcontractors on their intent to file liens for 30 days. It is hard to imagine a more outrageous example of lack of candor.
The citizens of Wausau are not children waiting for Santa Claus who can be placated with reassuring-sounding vagaries. Treating them as such is more than disrespectful. It is a flat-out insult to their intelligence. Who do city officials think they are fooling?
It is time for the Mielke administration to start providing detailed and honest assessments. At very least, people would like to know that their leaders have a grasp on reality. This pattern of vague reassurances that are undone by the facts every time are cementing a reputation for untruthfulness that will not soon be forgotten.
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