By Shereen Siewert
WAUSAU — The primary contractor spearheading the troubled Riverlife development filed two construction liens against the city of Wausau this month totaling more than $2.8 million, the first time the city has been specifically named in legal action in connection with the project.
The Samuels Group, Inc., of Wausau, notified the city Aug. 3 by registered letter delivered to Mayor Rob Mielke and to City Clerk Toni Rayala outlining the intention to file a lien against Wausau based on providing materials that improved city property, according to court documents. The city had 30 days to respond or satisfy the debt. The liens were filed Sept. 19 in Marathon County Circuit Court for $704,372.65 and $2,092,780.45.
The amounts of the liens exactly match the unsatisfied liens filed by Samuels against Barker Financial, LLC and Quantum Ventures, LLC in May, several months after construction stopped on the Riverlife Villages Phase I project.
Wausau owns the land upon which the buildings were being constructed and state law does not have a provision allowing a property owner to deny responsibility for improvements. And court documents specifically describe improvements made to the city’s property as the basis for the lien, which suggests taxpayers could be on the hook for paying unpaid contractors who spent many months and millions of dollars working on the project.
City Attorney Anne Jacobson said property owners can be held liable for improvements made on their land.
“And the City does own the land that is the subject of the liens to which you refer,” Jacobson wrote, in an email to Wausau Pilot and Review. “Whether the City, as the owner, would be held liable depends of course on compliance with state statutes in enforcing the lien claims.”
The Samuels Group had a signed contract for the work, which was performed between September 2017 and March 2018, court records show.
City Council President Lisa Rasmussen deferred to the city attorney on the question of whether the city is liable for the improvements made on the land, but added that she believes a landowner can become liable if the liens are foreclosed upon.
Rasmussen also noted that the city has some options relative to the liens and the funds that have been spent on design, but since those discussions have taken place in closed session the details cannot be made public.
“All I can say is that the fact that there are options, is due to the strength of the developer agreement that was executed initially by the city,” Rasmussen said. “Hopefully once the ED Committee has had a chance to interact with the proposers that emerged from the RFP process, we will be able to talk a little more about the project, the current and any future level of public partnership and the next steps. Obviously, if there are negotiations with a new developer, those topics will be addressed as well as the path forward in terms of costs and timeline.”
City officials on Sept. 11 terminated Wausau’s ground lease and development agreement with Barker Financial, LLC, of Iowa, an entity that Economic Development Director Chris 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. Frantz is facing multiple accusations of wrongdoing in Wisconsin and other states including Florida, where he is accused of luring a childhood friend into a $3 million Ponzi-style scheme.
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.
In August, city officials received three letters of interest for the east riverfront development, two of which are from developers potentially interested in taking over the current Riverlife Villages Phase I project. But at least two of those letters clearly state that the current lien situation would need to be resolved before any action is taken.
Economic Development Director Chris Schock and Economic Development Committee Chair Tom Neal did not immediately respond to requests for comment.