In what can only be described as breathtaking and extremely difficult to process, the Village Board unanimously approved the Village Manager's recommendation in early 2010 to give the original "Gang of Five" Radisson Hotel Partners the equivalent of the Village's entire Property Tax Levy for one year to renovate what had become known as the Baghdad Hotel on Main Street which had been sitting empty since the Fall of 2006.
Property Tax Bills Arrive
Property Tax Bills began arriving in early December and thanks to Governor Walker's Campaign promises and legislative action, most property taxpayers found their tax bills had gone down, stayed about the same or went up very marginally.
The savings could have even been more had the Village and School District fully implemented the guidelines the Governor and the Legislature had given them through Act 10.
What a relief to taxpayers and there were no services or programs that had to be substantially scaled back as a result of the Governor's reforms.
Good times are ahead as the Governor and legislature are just getting started.
For a complete and detailed list of the nearly $470,000,000 in tax savings so far, please go to www.reforms.wi.gov and click on the respective county to see what the itemized examples of savings are for local communities and school districts.
Imagine what could have been done for taxpayers and businesses had these reforms been implemented a long time ago for which many had called for, but didn't have local officials who had the courage to do so or were in bed with the unions.
Village's Annual Property Tax Levy Explained
According to the Village's General Revenues Summary website, (http://www.menomonee-falls.org/DocumentView.aspx?DID=1997 page 2) the average annual total tax levy for all businesses, corporations and homeowners in the entire village over the last four years (2009-12) has averaged $18,375,000 a year.
The Village also has other revenue sources above and beyond property taxes to operate on that include interest income, fines/penalties, permits, governmental aid, transfers, fee for services, licenses, etc. that complete the amount needed to operate the Village on an annual basis.
The average homeowner ($200,000) pays, according to the Village's Property Tax Bill, about $1,000 a year in property taxes for Village services.
Put another way, the average homeowner would not have had to pay the Village's portion of their tax bill ($1,000) for one year if they were to be given the preferential treatment that the Gang of Five received in 2010.
Imagine what an extra $18,000,000 would do for the local economy for all of the businesses, corporations and homeowners instead of giving it to the Radisson Hotel's Gang of Five.
Radisson Hotel Partners Gang of Five Given the Entire Tax Levy for Renovation in 2010
In a move that defies all logic, rationalization and any sense of sensibility, the Village Board unanimously approved the Village Manager's recommendation to give the original Radisson Hotel Partners Gang of Five the equivalent of the entire property tax levy to operate the village for one year when they gave the Gang of Five an interest free loan of $18,000,000 in May of 2010 to renovate the hotel.
Many of these same Village Board Members, who voted for the $18,000,000+ interest free Radisson Hotel renovation in 2010, scoffed at, made fun of, made cries of "corporate welfare" and ridiculed the Village President in 2003-04 when he was approached by local businessmen who wanted to bring GE's Global Headquarters for Clinical Systems, Information Technology (IT) and Interventional Cardiology and Surgery (ICS) Operations (http://www.gehealthcare.com/company/interns/business.html) to Menomonee Falls that, at full capacity, would have been the home for some 1,800-2,100 full-time jobs that would have averaged well in excess of $50,000 (http://www.indeed.com/q-GE-Healthcare-l-Wauwatosa,-WI-jobs.html), did everything they could to block any public/private partnerships between the Village and GE.
The 3 greatest fears of these Village Board Members were that they had been saying for years that something like this couldn't be done, knowing that it would be a huge coup if it was done and that they wouldn't get credit for it when it was done.
Trustee Jeskewitz was often observed by Vanguard members at McDonald's for his daily nine o'clock coffee clutch gloating to his retired friends about his efforts with other trustees to block the Village President in 2003-04, "We're (trustees) going to fight him (Village President) on everything to make sure he doesn't get anything done."
GE of course wanted to keep their costs down for leasing their building for their global headquarters in the area and were willing to take the best deal they could get from the various communities who were soliciting their business.
Village records will show the Village Board met numerous times in Closed Session with financial representatives, Waukesha County reps, Village Staff and the local businessmen who were courting GE.
The Closed Session Minutes will show that the local businessmen were looking for a package of approximately $5,000,000 between the County and Village to court GE to come to Menomonee Falls and would also seek assistance from the State of Wisconsin to complete the package of keeping GE in Wisconsin who was also looking at going to Illinois at the time.
The $5,000,000 bond issue would have been paid back through the TIF District revenues in a very short period of time according to the repayment schedule presented to the Village Board at the time by the Village's Bond Agent.
Village records will show that Trustees Jeskewitz, Steliga, McDonald and Ellis were the loudest critics, detractors and objectors to the idea.
It was suggested at the time that Trustee Ellis was against the idea purely because of her personal dislike of the Village President and her unamiable parting of the ways with Strong Funds and Dick Strong.
Jeskewitz, Steliga, McDonald and Ellis carried enough weight for votes (4-3) to kill the idea if it were to come to a public vote.
The matter never made it to a public vote because those members of the Village Board that wanted to approve the project didn't want the Village to become known as anti-business especially right after 9/11 and the severe recessionary times the country was experiencing.
The local businessmen left deflated and defeated.
The City of Wauwatosa, Milwaukee County and the State of Wisconsin immediately put a package (approximately $30,000,000) together 15 minutes down the freeway (http://www.bizjournals.com/milwaukee/stories/2004/03/01/daily30.html) and opened the new $85,000,000/2,000 jobs+ GE Global Headquarters shortly thereafter.
Many businesses benefited from GE locating in that area including the beautiful new Crowne Plaza Hotel (http://www.ichotelsgroup.com/crowneplaza/hotels/us/en/wauwatosa/mkemr/hoteldetail).
The $5,000,000 in bonds would have been paid back to the taxpayers of Menomonee Falls in a very short period of time by GE's property tax payments.
Wauwatosa and Milwaukee County got GE, 2000+ jobs at $50,000+ a year and Crowne Plaza.
Jobs where employees live near their workplace and contribute to the local economy and community in immeasurable ways.
The taxpayers of Menomonee Falls got the Gang of Five's hotel that is in default and receivership nearing the very real possibility of closing.
The taxpayers of Menomonee Falls got a small number of part-time jobs at $7.50 an hour for a variety of ethnicities that probably don't live in or near Menomonee Falls or contribute much to the local economy or community.
The $18,000,000 interest free taxpayer loan came out to $135,000 being spent on each one of the 134 rooms for the Radisson Hotel renovation.
What is Known About the Gang of Five Radisson Hotel Partners So Far
Thanks to the Village Manager and unanimous approval by the Village Board, the taxpayers now know the following information through Open Record Requests and tipsters to The Vanguard about the Gang of Five ...
- Radisson Hotel is purchased in 2003 after informal meetings are held with Village seeking input about assistance options and taxpayers fork out over $1,000,000 for studies, surveys, consultants and legal fees about the prospects of Main Street being renovated after decades of neglect by the Village Board.
- Village Board, in the words of Trustee Jeskewitz, "We're going to do everything we can to make sure nothing gets done with this Village President.", blocks any efforts by the hotel owner(s) to help secure a private loan.
- Trustee McDonald and Municipal Judge Hurt quickly move in to attempt to get cash under the table from hotel owner(s) if they want their project approved while requesting that the hotel owners separate themselves from certain Village Board Members as McDonald and Hurt promise the hotel owners that these Board Members will be "taken care of" and not to worry about their project.
- One potential hotel partner, who built the beautiful Hilton Garden Inn (http://hiltongardeninn3.hilton.com/en_US/gi/search/findhotels/results.htm?view=GALLERY) at Good Hope and 41/45, heads back to Illinois as he knows what happens to politicians who ask for cash in exchange for votes. They usually go to prison.
- The "certain members" of the Village Board are no longer on the Board after 2005.
- All systems go for cash.
- Cash is given, Village Board blocks any approval and the hotel is closed in late 2006 facing potential bankruptcy and or foreclosure.
- Another attempt is made by hotel owners in 2008 to revive the renovation and it quickly stalls after another $1,000,000 was forked over by the taxpayers for water/sewer, land purchases and more studies only to have the project stalled once again because the "credit market" had dried up.
- New partners are brought in in 2008 that promote themselves as a hotel management business out of Madison.
- Hotel is fined $6,000 by DNR for illegal asbestos removal to local landfill.
- Hotel sits bombed out for 3 more years and was delinquent at times on their property tax payments to Village since it was purchased in 2003.
- Gang of Five comes to Village Board with hat in hand pleading for an $18,000,000 interest free loan from taxpayers in late 2009 early 2010.
- Members of The Vanguard briefly meet with the Police Chief to share concerns about the hotel, Village Board and other issues in March of 2010 in the form of a formal complaint.
- Police Chief blows the complaint off in a short letter from July of 2010 basically stating there is nothing to look at and to move along.
- Gang of Five submit financials, spousal consent forms, collateral set-off agreements and joint marital agreements to Village.
- Gang of Five, under a notary public seal, state they are cumulatively worth approximately $20,000,000+ in order to secure the taxpayer loan.
- Approximately 60 days before the $18,000,000 is disbursed, one of the Gang of Five (Dave Gilbert) heads to Nevada to set up 14 Irrevocable Trusts on the same day to protect his investment properties around the state from creditors, lawsuits, bankruptcies and foreclosures including his interest in the Falls Radisson Hotel.
- Financially related lawsuits, evictions, judgments and or foreclosures are mounting and being settled against various members of the Gang of Five at the very same time they are asking the taxpayers for $18,000,000 to renovate the hotel.
- Village Board starts to disburse the $18,000,000 in May of 2010 for the hotel renovation.
- Nearly $3,000,000 goes to pay off 3 existing mortgages on the empty hotel that is assessed at $1,800,000.
- Over $1,000,000 goes to Gil-Her Construction out of Sun Prairie as a cash advance on the hotel renovation.
- Gil-Her Construction just happens to be owned by 2 of the original Gang of Five members (Gilbert and Nooyen).
- Disbursements are made by the Village to Stewart Title for the hotel renovation until June of 2012.
- Dave Gilbert, 50% Owner of Gil-Her Construction, files Chapter 7 Federal Bankruptcy in the U.S. Western District Court in Madison listing liabilities of $104,000,000 including the $18,000,000 he owes the taxpayers of Menomonee Falls about 150 days after he received the $18,000,000.
- Hotel is formally opened in June of 2011.
- Hotel projects a room occupancy rate of 60% or more on the 134 rooms.
- Hotel believes gross revenues will be well in excess of $3,000,000 a year starting in 2011 to pay for the debt service on the $18,000,000 taxpayer loan.
- Radisson Hotel gets to keep 37% of all hotel tax revenue through 2026.
- Some of the Gang of Five are evicted from their T Wall Properties Office in Madison at about the same time the hotel is opened.
- Many lawsuits start piling up all over the State of Wisconsin against most of the Gang of Five in 2010 and 2011 totaling millions of dollars related to various financial judgments, evictions, bankruptcies, foreclosures, delinquencies, fraud, etc.
- A jury trial is scheduled in Dane County in early 2012 against some of the Gang of Five for allegedly embezzling $1,200,000 from other hotels in Wisconsin that was used as collateral to secure the $18,000,000 taxpayer loan in Menomonee Falls. The Gang of Five members are also accused of falsifying the balance in the other hotel owner's bank accounts while using the $1,200,000 on the Radisson Hotel for collateral to secure the $18,000,000 renovation project from the Village Board.
- Gang of Five are in default on their first two $700,000 loan payments for 2011.
- Gang of Five were ordered by a Waukesha County judge to be in receivership in an attempt to protect the taxpayers of Menomonee Falls and their $18,000,000 investment.
- Nearly $3,000,000 in construction lien lawsuits are filed in Waukesha County against the Gang of Five by contractors who have not been paid yet.
New Developments About the Radisson Hotel and the Gang of Five
Since Tom Daykin, Journal Sentinel, and others broke the story about the Radisson Hotel challenges around Thanksgiving, many people have come forward to share even more information with The Vanguard involving the latest issues facing the Gang of Five based on the condition of anonymity.
Here's a list of the latest developments with the Radisson Hotel...
*The tax incremental value of the Radisson Hotel went from $1,800,000 in 2010 to $2,300,000 in 2011 after the $18,000,000 taxpayer loan.
*$18,000,000 for a $500,000 increase in tax increments or a net of about $7,500.00 for taxpayers.
*The hotel is allegedly behind on their electric bill and may be faced with having the power turned off soon.
*The hotel may turn the keys over to the Village if they can't make some of their loan payments within the next 90 days of which they are already behind on by one year.
*The hotel is finally beginning to admit that there are apparently not enough revenues coming in from room/banquet rentals to pay the bills.
*Many reservations are being canceled for fear of the hotel not being open when the reservation was to have taken place in 2012 and losing their security deposit of thousands of dollars.
*Village Manager is now blocking any release of any information to the public about the operations of the hotel after stating publicly that he receives regular reports and that the hotel is doing quite well. Trustee McDonald is trumpeting the same line. If the hotel is doing well, then just release the documents and let the rest of the public know. The Village Manager has become a professional contortionist with all of the excuses, State Statutes and Supreme Court Cases he sites to violate the public's right to know what has happened and is happening with their $18,000,000.
*Vendors are now requiring cash up front or credit card payments for services and products.
*Paul Nooyen, remaining 50% Owner of Gil-Her Construction Sun Prairie because his partner Dave Gilbert filed bankruptcy and an original member of the Gang of Five, appears to have closed Gil-Her, shut down their website (http://www.gilherltd.com/), has a red message alert from the Better Business Bureau to not do business with this company (http://www.bbb.org/milwaukee/business-reviews/services-general/gil-her-ltd-in-sun-prairie-wi-25001392/), has suspicious addresses for the business that a Google satellite search shows an empty or vacant building along with a hair stylist that now answers a phone number listed for Gil-Her which has been her number since August of 2011.
The Vanguard welcomes any input, corrections and or clarifications provided they are truthful, accurate and not hateful.
It is hoped by a miracle of God that the Radisson Hotel makes it and all of this bad publicity and legal issues are put behind them so the taxpayers can get their $18,000,000 back in a little over 24 months in 2014 when the lump sum payment on the 4 year note is due to the Village by the hotel partners.
Lots to be Thankful for...
In spite of all of the troubles with the Radisson Hotel and questionable Village Board decisions, Menomonee Falls has a lot to be thankful for.
We have Scott Walker as Governor.
Governor Walker was recognized as the Governor of the Year for 2011 (http://governorsjournal.com/2011/12/governor-of-the-year-scott-walker/).
We're basically safe from terrorist attacks.
Bin Laden is gone thanks to the president's correct decision.
Taxes have been held in check for the first time since 2003 and 2004.
Most Americans have jobs, their families, shelter, food and good health.
We can still worship the God of our choice.
It looks like there will be a new president in 2012.
The US Senate will probably have more members like Wisconsin's Ron Johnson in 2012.
The House of Representatives will reward Wisconsin's Congressman Paul Ryan for his courage to do the right thing and for his vision on how to save America from itself.
CVS, Woodman's, Pick 'n Save, JC Penny and others have come to or expanded in Menomonee Falls without a handout from the taxpayers.
Let's hope there's more in 2012.
Happy New Year Menomonee Falls!
Everything happens for a reason and can only get better!