Who knew what and when. It’s always the key to making a killing on Real Estate through an Insider Knowledge deal. Is there a small group of Racine City Hall Insiders who have managed to score a few buys of the century? Who had Insider knowledge of future projects that would greatly increase their sales price and commissions? Why else did Mayor John Dickert and the Redevelopment Authority violate numerous Ordinances, make deals in secret, and maintain silence behind the scenes, only to suddenly spring the results on the Common Council and Residents AFTER the Grants and Loans had been approved? Then, when honest and decent Aldermen pointed out that the process was in violation of Democratic principles as well as the law, certain other Aldermen demanded that the project go ahead anyways, AND in a rush!
On April 3, 2014, The Journal Times ran an article, City council members’ question RootWorks grant, project (Exhibit 14); in which City of Racine Alderman Eddie Diehl is quoted as saying:
“He also has raised concerns about connections two members of the Root River Council — Monte Osterman and Marty Defatte — have to one of the buildings the city plans to purchase through the grant: an industrial warehouse at 1251 Mound Ave.
Osterman’s business, Osterman Granite & Marble, leases space in the building. Defatte, a real estate agent for Shorewest, is listed as a real estate agent on the property.
Diehl has said he is troubled that both men might unfairly benefit from the city’s acquisition of the property. He said Osterman, the only tenant at 1251 Mound Ave., might unfairly benefit from the estimated $25,000 the city could end up paying the property owner or tenant to relocate.
As for Defatte, Diehl pointed out that the real estate agent could have known ahead of time that the property was going to be purchased by the city and stands to receive a commission when the property is sold.”
Racine Exposed has already exposed the schemes and lies that surround the Knowles-Nelson Stewardship Grant and the Mound Avenue West Bluff purchase. Posts which covered that topic include:
Root Works- Cui Bono?
Is Monte Osterman’s Lobbying Organization, (the) Root River Council Fraudulently Claiming to be Non-Profit?
Mayor Dickert’s Shady Deal and Stealth Property Tax Increase
With the rushed and sudden announcement by Mayor John Dickert that a $65M Project might take place in Racine, and with the sudden appearance of Rodney Blackwell, who owns the Davenport Quad Cities offices of Lee Enterprises and purchased the Lee Enterprises plane, along with Financial District Properties, scuttlebutt abounded that City Hall Insiders were set to make a killing on Real Estate. Somehow Historic Tax Credits had already been applied for (and received, just under the wire), while the Milwaukee Business Journal erroneously reported that the Properties had already been purchased by FDP. Meanwhile, rumors abounded that someone was attempting to purchase Water Street properties that were in arrears on their property taxes.
Click on Images to ENLARGE.
From The Milwaukee Business Journal, June 25, 2014:
Machinery Row development project in Racine receives $9 million tax credit
Helping Blackwell get the tax credit is just one of several steps that the city is working on to help finance the project, said Racine Mayor John Dickert. The city also plans to go after New Market tax credits and brownfield grants to help get the project financed.
“Obviously this is a big step that was accomplished today, but it’s one of many steps that need to happen to make this project work,” Dickert said. “We’d like to get an announcement done in the next 60 days.”
No one’s sure under what authority Dickert is offering the City’s services, or how much it’s going to cost taxpayers, so let’s take a look at the properties and see if any City Hall scuttlebutt has the ring of truth. Maybe Dickert needs to roll out his Cousin, City Administrator Tom Friedel, to once again explain to overtaxed City Residents the difference between the two types of money at Racine City Hall, Hard, and Soft.
Racine Exposed took a look at the Water Street Properties and checked all publicly available records and discovered that 3 of the properties were in arrears for property taxes, 2 properties were publicly for sale, while two properties had been purchased by SW Income Investment Properties LLC under “unusual circumstances”. Below is the current City of Racine listing of Water Street Properties along with the owners:
900 Water Street, owned by Richard C. Olson, is in arrears for $82,826.11 worth of property taxes, according to Racine County:
Next on the list is 800 and 1010 Water street, properties that are part of the Azarian Marina properties. Over the years, Azarian Marina has come on and off the Real Estate market and has been behind in property taxes, as documented many times in Racine Exposed. Below is an expired realty listing from 2012. Note the list of properties that came with the purchase of 800 Water St; 470, 712, 512, 702, and 308 Fourth St, along with the price of $995,000.
NOW, with announcement of a potential $65M Machinery Row project by Mayor Dickert, 800 Water St. is suddenly a valuable property, but due to unpaid paid property taxes, it is vulnerable to the tax foreclosure process by Racine County Executive Jim Ladwig. And, like magic, it is being offered for sale, by itself. Someone knows the value of this land, and intends to profit!
1010 Water St. is also behind in taxes, and is now a hot property. Why hasn’t Racine County Executive Jim Ladwig taken the property? WIth unpaid taxes in 2010, the process should have started in 2013, or was there another plan?
Strangely enough, 702 Water St. had been for sale including 1010 Water St. earlier in the year. While the listing for 702 Water St. has been changed to remove 1010 Water St. from it, the picture remains! OOPS! The price remained the same, it just has one property less! See below:
The correct picture for the main listing should be about where Mayor Dickert has his press conference announcing the Machinery Row Project.
And who is handling these realty transactions? It’s Re/Max Newport Realty, owned by Saint Catherine’s Alumni Raymond Leffler, who also owns Newport Development Group, and is part of the Leffler’s Real Estate corporation, Platinum Venture Group. It also involves his brother, Attorney Michael Leffler, who is also a 1981 St. Catherine’s graduate along side John Dickert, which makes the WAY in which this project has been handled by Racine City Hall, very interesting, to say the least.
The wise words of Alderman Words of Sandy Weidner concerning the Knowles-Nelson Grant fiasco will turn out to be prescient.
Alderman Sandy Weidner: “On the motion to refer to Committee. There are a couple of reasons why I think it is appropriate to send it back to Committee for a discussion by the full body. There are two issues that I think are important enough to be discussed at length. One is the logistics of this grant and the process in which, um, the City used to apply for it. Um. This never came to Council. There was money spent out of the Intergovernmental fund to pay for the appraisals. That money was never approved by the Council. And if we have one function, it’s, we control the purse strings. If we sit back and allow staff to spend money out of the IG fund, or apply for grants without our approval we’re heading on a slippery slope. The other thing, the full Council needs to be aware exactly what it is we are doing with that grant. I think the Knowles-Nelson grant would be a very important thing for the property that is already owned by The City of Racine. Part of what that grant is going to do once it tears down privately owned property is going to put in new lights, new benches, new garbage cans, along with what amounts to half a block strip along Mound Avenue. I get calls to this day from people in my neighborhoods that have lost their streetlights. Yet we can afford to take this grant money and money out of the IG fund to put into the equivalent of a half a block of bike trail. If you look at the plan itself it says you’re going to get the rural and the urban feel. They’re going to tear down five properties. We have no idea what the demolition costs are going to be. That’s never been discussed. Ever. We have no idea what the total cost of this project was going to be. Um. I understand that we’ll be losing $12,000 a year worth of property tax. To some people it’s not a big thing. To the people that I represent that are struggling to pay their property taxes right now it is a big thing. So it’s things that we need to be cognizant of when we move forward with this. The Staff has done a very poor job defining what the problem is along that River. Very good at proposing what the solution is. But I never, as much as I ride that bike trail. I ride it on a weekly basis. I have…”
Mayor John Dickert: (talking in background, interrupts) “Let’s wrap it up and try to keep it on point. Alderman Weidner.”
Alderman Sandy Weidner: “I don’t think that my discussion is any different than the speakers before me. But if you’d like me to save my comments to speaking to the motion, we can vote up or down sending it to the Committee of the Whole. Once that’s done I’ll speak all over again and finish my comments when we vote on the item. One way or the other.”
Have Racine taxpayers already forgotten the promise by Racine County and City of Racine elected officials that Reef Point Marina would bring prosperity to Racine? Twenty-Eight years later, and the taxpayers are now subsidizing the businesses at Reef Point Marina and there are still NO profits. The Marina is a liability with no actual real-world market value.
Meanwhile, the Belle Harbor Boondoggle still continues to cost Racine County taxpayers, who will now pay to fill in and redevelop what Racine County officials once proclaimed as:
“All in all, I think we’ve got a great deal,” Kornwolf said.
“I’m very pleased we could put it together so that it won’t affect the taxpayers one bit,”
The land seemed so attractive that county officials said they were extremely concerned that another buyer would outbid them. “It was a very big fear,” Janiuk said, noting the county, being a governmental body, couldn’t keep the talks secret. “When there’s a marina on the market, there’s always a threat somebody could step in,” he said.
Next week will be part 2 of this look inside some of the strange circumstances surrounding Root Works.