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Riverlife developer faces questions after Green Bay project audit shows $851K discrepancy

in Breaking News/News

By Shereen Siewert

GREEN BAY — A developer heavily involved in Wausau’s troubled Riverlife Village project is now facing pointed questions in Green Bay, after an independent audit revealed about $851,000 in discrepancies in how city funding was spent on a hotel renovation.

At a meeting Tuesday of Green Bay’s finance committee, City Attorney Vanessa Chavez suggested criminal charges are possible if the court-appointed receiver for the project ultimately claims the developers, Hotel Northland, LLC, engaged in contractor fraud.

City officials did not break any laws and no federal laws appear to have been broken by the developers, Chavez told the committee.

The audit looked into financial records of Hotel Northland LLC, formed in 2014 by Mike Frantz and Keith Harenda, the development team that once spearheaded a massive renovation project at the historic Green Bay hotel.

Frantz is now the president and CEO of Quantum Ventures and has been involved with Wausau’s multi-million dollar river development project since February 2016. Like Green Bay’s Hotel Northland project, Wausau’s Riverlife Village project includes millions of dollars in developer incentives. In Wausau, that funding will come from tax increment district financing. In Green Bay, the public portion of funding in the $44 million project came from a $4.7 million HUD Section 108 development loan, money that was disbursed to Frantz and Harenda at the start of the project.

The Green Bay audit was ordered after Frantz and Harenda defaulted on their financing, halting construction and putting the hotel in receivership. The hotel has since been sold and construction is back on track, with an opening slated for this fall.

The biggest discrepancy the audit showed was a payment of $621,000 for kitchen equipment which was never actually purchased, according to public documents. Other discrepancies detected in the audit include a variation of $153,430 in technology purchases, $153,430 in historic preservation design services and $26,849 in carpet purchases. The total variation discovered in the audit is $850,948, according to city documents.

Chavez told committee members that all disbursed funds appeared to have been spent on the project, but precisely how the money was used is not clear.

In Wausau, city leaders are still grappling with how to move forward as they await deadlines for Frantz’s current development team to satisfy about $3.2 million in construction liens filed since May against phase one of the Riverlife Villages. The city has funded $372,462 toward the project as part of a pre-development loan and construction came to a halt early this year.

Earlier this month, Frantz not only assured a Wausau Daily Herald reporter that financial commitments were in place, but also said he plans to amend the original plan to add additional space to the apartment complex and bring the total number of rentals to 70.

City officials have received three proposals from developers interested in the Riverlife development area, but those proposals will remain under seal until at least Aug. 23, according to Economic Development Director Chris Schock. Officials have not said whether the proposals received are for the Riverlife Villages project currently underway or for adjacent properties, both of which were part of the request for proposals issued in May.

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