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Possible developer change in the works for Riverlife project (again)

in Breaking News/News

By Shereen Siewert

WAUSAU — Less than six months after the Wausau City Council chose a new developer to assume control of the stalled Riverlife Villages project, another change appears to be in the works.

Members of the Wausau City Council on Tuesday, April 22, will meet in closed session to discuss the “selection of (a) developer for the Riverlife Villages Phase I project,” according to an online agenda. In November, city officials awarded the project to Gorman & Company. The company, which is headquartered in Oregon, Wis., was chosen in favor of Riverlife Wausau, LLC, a local development partnership between Bob Ohde Construction, Mitch Viegut and Dr. Fernando Riveron.

But a signed development agreement with Gorman has so far not materialized.

During an April 2 meeting, Economic Development Director Chris Schock acknowledged that no agreement had yet been signed but insisted that plans were still moving forward.

“We are working on the details of the agreement,” Schock said on April 2. “The timeline has not necessarily changed but obviously we’re in a crunch period now to be sure everything is signed and ready to go…everything has been moving along.”

Despite those assurances, three separate sources have told Wausau Pilot and Review that a developer change is imminent. Mayor Rob Mielke would say only that an announcement will be forthcoming.

“It is a discussion for Closed Session with an update regarding this matter that will be brought before the Council …there will be an announcement afterward,” Mielke wrote, in an email Monday to Wausau Pilot and Review. “I’m fairly sure of whom your sources are but respectfully, the City Council needs to be officially informed first…stay tuned until tomorrow night, I will have a statement addressing this after Closed Session.”

Schock did not respond to a request for comment for this story and efforts to reach Gorman & Company officials were not successful on Monday.

Gorman & Company’s application, dated Sept. 25, outlined a plan to purchase the 1.8 acre property from the city for $1 to build the 38,000-square-foot building for both apartments and commercial use. The company anticipated using $1.3 million in equity and $5.7 million in loans to complete the project.

Riverlife Wausau, LLC, also sought land acquisition from the city for the purchase price of $1 for residential construction only. The group had already secured financing and presented several letters of support from high-profile downtown business owners.

Looming over the project is a series of liens filed in Marathon County Circuit Court by several contractors and subcontractors. The Samuels Group, the prime contractor for the multi-million dollar redevelopment, filed liens in May totaling $2,797,153.10 in connection with the project.

Ayres and Associates, an Eau Claire firm that was contracted directly by the development team to design and install a geopier foundation system for the project, also filed a primary contractor lien Aug. 30 in Marathon County Circuit Court for $38,503.84. Court documents show Ayres performed work valued at $120,590.17 and has so far been paid $83,086.33. The Ayres construction lien names Wausau Riverlife, LLC and Barker Financial, LLC.

In November, Mielke said that situation was expected to be resolved within a week, and that a potential settlement had already been budgeted for. But to date, those liens remain unsatisfied.

Meanwhile, legal bills continue to mount for the project. As of Jan. 24, 2019, the city paid $71,962.01 to Quarles & Brady for invoices billed under “Frantz Community Investors Development Agreement.” An additional $6,709.50 was paid to Quarles & Brady for professional services which were billed under “Riverlife Phase I (2018 RFP), according to City Attorney Anne Jacobson.

The project has been in the works for nearly four years, involving a dizzying array of adjustments and changes to the players involved in the project. The city initially released a request for proposals in July 2015, which garnered two responses. The project was awarded in February 2016 to Frantz Community Investors, a team that consisted of Mike Frantz, Tom Frantz, Andy Frantz, Paul Pappgeorge and Mitch Hallgren.

Then in December 2016, city officials signed a development agreement with Frantz Community Investors, LLC, and Wausau RiverLife, LLC, with Mike Frantz signing as manager of both. How Wausau RiverLife, LLC became a party to the development agreement is unclear, and is not mentioned in any minutes or meeting documents on the city’s website. Dave Barker of Barker Financial, LLC, was introduced as a lender and equity partner in the project on Aug. 1, 2017. Fourteen days later, Frantz Community Investors, LLC, was administratively dissolved, according to Iowa state records, and Barker Financial became the developer of record in September 2017.

The situation changed again in January 2018 when the city council approved a resolution to add Mike Frantz’s new company, Quantum Ventures, LLC, as part of the development team. Two months later, Frantz announced he bought out Quantum Ventures CEO Jason Sharkey after a Wausau Pilot and Review investigation revealed Sharkey’s role in a 2006 real estate Ponzi scheme in Denver, for which Sharkey is continuing to pay restitution after a two-year diverted sentence. At the same time, Frantz also announced plans to expand the commercial development by adding two additional stories to the building, pushing the overall cost of the project to $27 million.

But less than two months later, the deal fell apart.

To date, the city has funded $372,462 toward the project as part of a pre-development loan, according to Finance Director Maryanne Groat. The bulk of that number, $290,078.50, was paid to Mudrovich Architects of Wausau for design and engineering costs, Groat said. The remainder was split between Baker Tilly and Ayers & Associates.

The first Riverlife phase was expected to be followed by additional phases to add more housing and other mixed-use buildings, officials said. The total project could cost between $80 million and $100 million to build, according to city documents.

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