By Shereen Siewert
WAUSAU — During a media roundtable discussion Thursday, Wausau’s mayor said he is confident the city will move forward with developing the east riverfront land without the current development team.
But when asked by Dist. 11 Alderman Dennis Smith whether city officials could say with certainty that taxpayers would not foot the bill for roughly $3 million in liens filed against the project, neither Mayor Rob Mielke nor Economic Development Director Chris Schock had a clear answer.
“The city already approved funding toward this project,” Schock replied, in answer to Smith’s question. If you want to say it’s paying for liens or for other parts of this project, that’s what you’ll decide (as a city council member).”
The city council in 2015 approved about $2.25 million in loans for phase one of the project and $500,000 in grants for the building foundations, all of which would come from a special tax district. Since then, the project has undergone a variety of changes in financial and development partners and has been mired in financial and legal snags. To date, the city has funded $372,462 toward the project as part of a pre-development loan, according to Finance Director Maryanne Groat. That money has not been repaid.
On Tuesday, members of the economic development committee recommended terminating the current development and ground lease agreements with Barker Financial, LLC, of Iowa, an entity that Schock described as having a “common thread” with Mike Frantz. Frantz has been the public face of the project since the council first awarded the project to Frantz Community Investors, LLC, which has since dissolved. The full city council will consider the terminations during the group’s Sept. 11 meeting.
When asked whether there was any chance the city would continue working with Frantz on the development, Mielke answered: “I’ll be very candid. No.”
The liens continue to be a stumbling block as the city seeks to move forward to develop the roughly 16-acre parcel on the city’s east riverfront. The Riverlife Villages portion of the project generated significant enthusiasm in the community, but stalled when financial roadblocks halted construction in early spring.
Schock said the city owns the architectural designs for the project, though a future developer could opt to move forward with a new plan altogether. In August, city officials received three letters of interest for the east riverfront development, two of which are from developers interested in taking over the current Riverlife Villages Phase I project.
The first letter, presented by Gorman & Company of Oregon, Wis., asks the city to transfer the two current building sites to the purchase price of $1. Under the terms of the proposal, Gorman would not assume liability for the $2.7 million lien for foundation work but would require the city of Wausau, Barker Financial and the Samuels Group to come to a collective agreement on the existing debt.
Gorman proposes to continue building the 52-unit apartment building as designed but would look further into the viability of the retail tenants “supposedly lined up for the intended mixed-use commercial building,” according to the letter of intent signed by Ted Matkom, Gorman’s Wisconsin market president. If retail tenants are not secured, Gorman would consider converting the mixed used building into apartments within the established foundation footprints.
On Thursday, Schock said the city is not aware whether any current retail tenants secured are already renting space at other Wausau locations or are being drawn in from other areas.
“That’s not something we would know,” Schock said.
The second proposal from Mitch Viegut and Ohde Construction, does not include specific details about their proposed takeover of the project but instead asks Schock to add their names to the list of potential developers for the project. Viegut is a Wausau real estate broker and contractor and Ohde Construction is a general contractor with offices in Wausau and Daytona Beach, Fla.
A third proposal, submitted by Dave Johnson of Wausau, relates to property adjacent to the current development site.
Johnson seeks to construct 17 high end condos located on a city-owned parcel south of Fulton Street along the Wisconsin River. The proposal calls for an approximately 39,000-square-foot building containing 23 units ranging in size from 2,000 to 3,000 square feet of space. The cost of the building is estimated at $9.75 million, and would generate about $260,000 in annual tax revenue.
City staff will ask all three potential developers to flesh out their plans and present them to the economic development committee for evaluation next month.
Schock said city officials are not having conversations with other developers about the area but are sticking with the city’s process for requesting proposals. Other interested parties could contact the city if they have an interest in other areas of the land along the riverfront slated for development, Schock said.
Mielke, during Thursday’s roundtable discussion, said he is confident the city has acted appropriately during the process, providing numerous updates to the public along the way.
“There are great and positive things happening,” Mielke said.