Miracle on Racine’s Sixth and Water Streets Part II

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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!

Strangely enough, in the City of Racine 2014 CIP, which was adopted on November 19, 2013, there is an entry for TID 18, Machinery Row.  Yet TID 18 does not officially exist, and a TID is not something which is casually approved with just a vote from the Common Council. The creation of a TID requires certain Notices being sent, the creation of a Joint Review Board, Public Hearings, an approved Project Plan, a specific Timeline, and the Wisconsin Department of Revenue must determine certain property assessment values. While Racine Exposed has heard from various sources making claims that the TID is in the approval process, that is NOT what the Wisconsin Department of Revenue claims. In fact, the Wisconsin Department of Revenue has no knowledge of ANY current activities involving the City of Racine in creating TID 18. Neither does Racine County or RUSD. So why is TID 18 there, and was placing this item in the CIP and projecting future budgeting for the TID even legal? And under what Authority was that done? Is this part of the continuing pattern, or practice of Racine City Hall ignoring proper procedures, violating due process, and exceeding the limits of authority to act? Has Racine City Hall been turned into a Realty Office? Is speculation and blowing realty bubbles the name of the game? Only time will tell.

Proposed TIDs

It is the Wisconsin Department of Revenue that administers and regulates TIF’s, aka TID’s. For those who want more information on how TIF’s work, there is an entire WI DOR  webpage devoted to the issue. Click HERE to access the webpage and find answers to your questions. A current list of active TID’s from the WI. DOR may be accessed by clicking HERE.

Reproduced below is page 30 of the 2014 CIP, showing an entry for TID 18:

Click on image to Enlarge2014 CIP

The Wisconsin DOR has no current knowledge of a TID 18 in Racine, WI.

TID 18 Request

Which really brings into question the purpose and motive of suddenly announcing a $65M project on a rushed time table, and, according to Jim Bowman, direct involvement from Governor Scott Walker in approving  WEDC tax credits.  From the Milwaukee Business Journal:

Machinery Row Story

And not everyone understands the importance and value of the Historic Tax Credits – As Jim Bowman succinctly stated, “Without the tax credits, it would have been marginally economically viable at best”; and from WEDC:

Historic Tax Credits-bmp

Of course, with the sudden announcement of a potential $65M development and the approval of Historic Tax Credits, many properties that were previously undesirable and that had been on and off  the market for a long period of time suddenly became salable.  Some of those properties were discussed in the post, Miracle on Racine’s Water and Sixth Street. Are other long time property owners looking to sell? It appears to be so.

Retired RPD Police Officer, Shore West Realtor and Root River Council INC. Board Member Marty DeFatte is looking for $$ Top Dollar $$ for 1251 Mound Avenue, which also, coincidentally, is the business address of fellow Root River Council INC. Registered Agent and Racine County Supervisor Monte Osterman. Currently assessed by The City of Racine at $150,000, Civic Minded Marty DeFatte is only asking a premium of nearly $40,000 for the property.

1251 Mound Ave-bmp

Meanwhile, with only 31 days on the market, 1336 Mound Avenue is quite the bargain! Assessed at $90,000 by The City of Racine, the ad does admit that the property needs a fair amount of work and that no repairs or warranties are offered with the purchase. The Root River Project is just down the street!

1336 Mound Ave-bmp

Another price cut on 1101 Mound Avenue.  Assessed by The City of Racine at $585,000 and with only the third floor fully leased, this property can be bought for $798,000 – was $850,000.

1101 Mound Avenue-bmp

Meanwhile, scuttlebutt around City Hall says that an unnamed person has been hired for $15,000 to facilitate the purchase of the 1287 Mound Avenue property, whose owners may be reluctant to sell. The City has even talked about using eminent domain to take the property from the owners. That is NOT the story that Matt Sadowski told the DNR in his UNAUTHORIZED application for the Knowles-Nelson Stewardship grant. Did Matt Sadowski just get caught lying on an application to the DNR?

1287 Mound Avenue:

1287 Mound Avenue

From The Journal Times:

The Council will not be asked to approve the acquisition and relocation plan for the five properties, Assistant Director of City Development Matt Sadowski explained Monday. By voting to support the redevelopment plan, aldermen will be voting to give the city or Redevelopment Authority permission to either purchase the properties or, if necessary, acquire them by eminent domain.

Sadowski said if the city could not come to a purchase agreement with any of the property owners, it would decide then whether to use eminent domain — based on how crucial to the overall redevelopment the property was. If the city did use eminent domain to acquire any of the parcels, Sadowski said, it couldn’t use the DNR grant money to pay for the acquisition of that particular parcel.

Why is Matt Sadowski, in a Journal Times article, threatening a potentially reluctant property owner into selling with the claim that he may use eminent domain to take what won’t be willingly sold? Why is The City of Racine allegedly employing a Negotiator for $15,000? For a bike trail? To remove 5 properties from the tax roles and shift almost $13,000 in taxes to other homeowners? Here is what Matt Sadowski told the DNR:

Mound Avenue ProblemsMatt Sadowski Statement

*UPDATED* Did Matt Sadowski also lie when he told the DNR, on his unauthorized application that the properties have been primarily residential, except for 1251 Mound Avenue? Did Matt Sadowski actually investigate the area or check the City of Racine property records?

Matt Sadowskis Claim

Property Zoning

There is also scuttlebutt around Racine City Hall that the owners of certain properties had been approached, potentially illegally, with questions about selling their properties, or if they would sell to certain individuals, prior to the announcement of the awarding of the Knowles-Nelson Stewardship Grant. It was told to Racine Exposed that City of Racine Attorney Rob Weber may have advised certain individuals  not to approach the owners – but they chose to do so anyway. If true, this demands an investigation.

When the evidence is examined, Root Works has the appearance of an ill-conceived and rushed plan, lacking proper planning and based upon speculation and lies. Announcements and plans are discussed, yet they have not been properly imnplemented or approved. Mayor Dickert seems to be attempting to blow a huge real estate bubble without any substance backing the plan. Lies and baseless speculation have been the foundation. The taxpayers need to watch out as the profits will be privatized while the taxpayers will pay all the costs along with the losses. There is no solid evidence anywhere that Root Works is nothing more than  SCAM-O-RAMA Racine!

Root Works Ripping Off The Taxpayer Again

When reviewing the many questionable actions that have been EXPOSED in this real estate scheme, the Reader should keep in mind that many of the government officials involved in Root Works are also currently involved in a RICO lawsuit which alleges that the Defendants engaged in:

• Extortion in violation of the federal extortion statute, 18 U.S.C. § 1951(b);
• Extortion in violation of the Wisconsin extortion statute, Wis. Stat. 943.30;
• Bribery in violation of the federal bribery statute, 18 U.S.C. § 201(b);
• Bribery in violation of the Wisconsin bribery statute, Wis. Stat. 946.10;
• Receiving an unlawful gratuity in violation of federal law, 18 U.S.C. § 201(c);
• Receiving an unlawful gratuity in violation of Wisconsin law, Wis. Stat. 11.25(1);
• Official misconduct in violation of Wisconsin law, Wis. Stat. 946.12;
• False swearing in violation of Wisconsin law, Wis. Stat. 946.32(1)(a);
• Honest services fraud in violation of federal law, 18 U.S.C. § 1346; and
• Money laundering in violation of federal law, 18 U.S.C. § 1956(a)(1)(B)(i)

Further, Racine County Supervisor Monte Osterman is facing a Complaint that he, as The Registered Agent for the Root River Council INC. has fraudulently claimed it to be a Non-Profit Organization, failed to disclose his economic interests as required by law, and committed Misconduct In Office by misusing his position and authority in lobbying for Root Works and the Mound Avenue Bluff purchase.

In their Links to Other Partners and Programs, the Wisconsin Coastal Management does NOT list the Root River Council, INC. So where are the funds coming from? Below is a partial list, but Root River Council, INC. never appears on the list!

List of Non-Profits

Who knew what and when? Why it is the Root River Council INC. that has employed Vanderwalle and Associates since 2012!

Root Works Background

And did Mayor Dickert use his position to steer funds from the Costal Zone Management Act Grant #NA12NOS4190091 to Monte Osterman’s Root River Council INC., to retain Vanderwalle and Associates? From: Wisconsin Coastal Management Program:

2014 Management Council Listing

And if the Wisconsin Coastal Management Program doesn’t recognize the Root River Council INC. as  Partner or a Program that they administer, where is Monte Osterman getting the funds to retain Vanderwalle and Associates? Are Root River Council INC. employees and Board Members being paid? Where are the funds coming from?

 

Racine Equality Project Wins Racines Best 4th. Of July Float!

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REP Visual

The Racine Equality Project and The entire City of Racine celebrates Transparency, Truth, Trust and Justice for all on this Fourth of July, 2014!

Click on image to enlarge. These are huge images that need to be clicked on to enjoy the vibrant color and details!IMG_1217

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Brought to you by the Racine Equality Project!

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REP Visual

The Racine Equality Project!

CONGRATULATIONS!!!

Celebrating Justice for all as the Plaintiffs Continue to Seek Justice in Racine Lawsuit.

And The Racine Equality Project Files an Ethics Complaint!

Miracle On Racine’s Water and Sixth Streets

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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!

Cui Bono?

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.Machinery Row Purchase

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:

Water St. Search

900 Water Street, owned by Richard C. Olson, is in arrears for $82,826.11 worth of property taxes, according to Racine County:

900 Water St

900 water st pic

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.

azarian marina

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!

800 water street pic

Zillow History

800 Water St.

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?

1010 water st pic

1010 water st. Zillow

1010 Water St.

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:

702 Water St. For sale listing

702 W St.

702 Water St. Zillow

The correct picture for the main listing should be about where Mayor Dickert has his press conference announcing the Machinery Row Project.

702 Water St. Pic

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.

Newport Realty

 

Cui Bono?   

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.

Flow-of-funds-5a

Bryan Albrecht And Gateway’s Unelected Board Add Another $7M In Debt

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On 13 June, 2014 Moody’s reported that Gateway Technical College was preparing to issue $7,000,000 in bonds to finance equipment purchases and various building improvement projects.

Click on Image to enlarge.June 13, 2014 Moodys

Note that the debt of Gateway, which is paid by property owners in the District and appears on property tax bills, will be $55.2M after the bonds are issued. Of course, The Journal Times failed to report the new borrowing and that the notes would be secured by the District’s unlimited tax pledge – which means it is to be added to District Taxpayers Property Tax bills.

In an April 18, 2014 Article,  The Journal Times did make a note to report that Gateway had managed, thanks to Act 145, to shift half of it’s tax burden from District Taxpayers to State Taxpayers.

“Under Act 145, the property tax relief act passed this year, the state will pick up a large portion of what local property taxpayers usually pay for technical colleges throughout the state, explained Conor Smyth, a spokesman for the Wisconsin Technical College System. It doesn’t mean a new pool of money for technical colleges, he said. It means local taxpayers will pay less, while statewide taxpayer dollars, now part of the state surplus, will be more heavily relied upon.”

Part of the smoke and mirrors game plan of State Assembly Speaker Robin Vos who claimed that tax shifting was actually tax relief. Good Grief Robin Vos!

“Vos, the Assembly speaker, said the biggest complaint he hears from constituents is about taxes and this provides relief.”

Tax Shifting

What’s more important is that The Journal Times played it’s part in fooling the People with the headline, Gateway property taxes cut in half. While it is true that on April 18, 2014, Bryan Albrecht and his unelected Board could claim, “The total amount taxpayers are budgeted to pay next year for Gateway is $28.98 million, down from $60 million this year”; it only took Gateway one month to add another $7M in debt, meaning that the amount District Taxpayers have to pay is now $36.98M and this figure will continue to grow every time Gateway borrows more. And borrow more they will!

Ever since April 2, 2013, when District voters turned down Gateway’s referendum to borrow $49M, Bryan Albrecht and his unelected Board have been making steady progress to turn their failed referendum into a reality through back-door borrowing that goes unreported in local media channels.

Gateway Vote April  2, 2013

RACINE — On Tuesday, residents across three counties voted down a $49 million funding request from Gateway Technical College for a package of construction projects.

The $49 million package would have funded seven renovation and expansion projects at the college, including a $15.6 million public safety training facility and a $13.5 million expansion and renovation at the Elkhorn campus.

Albrecht said that the referendum’s defeat means those projects are no longer a reality for Gateway, which can only approve projects worth $1.5 million without placing an item in front of voters.

So what Bryan Albrecht has chosen to do, because  Gateway can only approve projects worth $1.5M without a referendum , is to defy District Voters by breaking up construction projects into smaller bites and building it one piece at a time, just like Johnny Cash!

albrecht_165x214

One day I devised myself a plan
That should be the envy of most any man
I’d sneak it out of there in a lunchbox in my hand
Now gettin’ caught meant gettin’ fired
But I figured I’d have it all by the time I retired
I’d have me a car worth at least a hundred grand.

I’d get it one piece at a time
And it wouldn’t cost me a dime
You’ll know it’s me when I come through your town
I’m gonna ride around in style
I’m gonna drive everybody wild
‘Cause I’ll have the only one there is a round.

Since the defeat of Gateway’s $49M referendum on April 2, 2013, Bryan Albrecht’s “one piece at a time” strategy has managed to borrow $19.1M without District Taxpayers approval to fund equipment purchases and various construction projects. From Moody’s:

Gateway Borrowing

For orchestrating this “one piece at a time” borrowing strategy, and make no mistake about it’s importance to local union contractors and Gateway Board Member Roger Zacharias, who  is currently a Business Representative for the Chicago Regional Council of Carpenters,  Bryan Albrecht has been amply rewarded with lavish pay and benefit increases in spite of the continuing high unemployment and economic misery for the working People that he taxes out of their homes and businesses.

ROger Zacharias

June 20, 2013, from The JT: Gateway board approves president salary increase

BURLINGTON — Gateway Technical College President Bryan Albrecht is getting a raise and a bonus, the college’s Board of Trustees unanimously decided Thursday.

Albrecht will receive a 2 percent raise, bringing his salary from $210,000 to $214,200 annually. Albrecht will receive a $7,500 performance bonus as well.

YET, only eleven months later, the Unelected and Unaccountable Gateway Board would offer another huge bonus to Bryan Albrecht!

May 15, 2014, from The JT: Albrecht to remain at Gateway – offered $100K incentive for five-year stay

The incentive package gives Albrecht an extra $10,000 in salary and an extra $10,000 in a tax-sheltered annuity account annually. The package also allows Albrecht to “cash out” any unused vacation days at the end of each fiscal year, Bhatia said.

Currently Albrecht makes $229,500 annually and gets $35,000 put into a tax-sheltered annuity account annually, according to Bill Whyte, Gateway’s vice president of human resources and facilities.

The incentive package will only kick in if Albrecht stays at Gateway at least five years; it would then be applied retroactively, giving him $100,000 at that time, Bhatia said.

The package could be extended for an additional three years, and Albrecht will continue being eligible for regular salary increases during the duration of the package, Bhatia said.

Is it then any wonder why South East Wisconsin can’t compete in the Global Marketplace for  Businesses and Employment Opportunities?  Businesses continue to close while brain drain continues as People whose jobs are taxed out of existence move to more desirable and affordable areas of the Globe. Meanhile Gateway trains People for non-existent jobs and continues to loot businesses and property owners to pay lavish salaries and benefits to a chosen few. They are no different than the Robber-Barons of the Nineteenth Century -

Gateway Robber Barons

Meet the Unelected, Unaccountable, Irresponsible, and Ethically Challenged Robber-Barons of the Twenty-First Century:

Gateway 21C Robber Barons

Their Irresponsible Tax, Spend and Borrow schemes will only create more abandoned and closed Businesses and Homes in South East Wisconsin. From:Ruins of the Rust Belt: Haunting Photos of Abandoned Buildings by Seph Lawless

Milwaukee Abandoned Factory

 

 

 

VenuWorks Contract is to be Extended Two Years – Civic Centre to Cost Taxpayers $611,750 In Subsidies

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On Tuesday June 17, the Racine Common Council will refer the recommendation by City Administrator Tom Friedel to extend the contract of  VenuWorks of Racine, LLC by two years, to the Finance and Personnel Committee for consideration.

Click on Images to ENLARGE.Tom Friedel Letter

Is this in the best interest of City taxpayers and has Venu-Works turned the Civic Centre Enterprise into a profit center for the City; or it a profit center for Venu-Works of Racine LLC Registered Agent Rik Edgar and the multitude of vendors and contractors who service the Civic Centre and collect taxpayer funds?

From the 2014 City of Racine Budget, and you can download a copy to view by clicking HERE:

2014 Budget Enterprise

Enterprise is defined as:

Enterprise Defined

So is the City of Racine engaged in profitable business activity, or running at a loss?

Civic Centre Operation 2014 Budget

The 2014 Budget makes it clear that the Civic Centre has Expenditures of $889,750 and Revenues of $611,750, for a staggering loss of $278,000. Worse yet is the fact that the majority of the Revenue is from property taxes paid by residents, $326,750;  borrowing through the issuance of Bonds, $250,000, which must be repaid by taxpayers with debt; and the Room Tax, $35,000 which increases the cost of visiting and staying in Racine, thus discouraging Tourism.

Civic Centre Revenue

While Mayor John Dickert turns off and removes streetlights, cuts services, increases Recycling Fees (which were supposed to have gone away), seeks a Water and Sewer rate increase, and increases property taxes every year, in 2014 The Civic Centre Commission is planning on spending $50,000 on an interior redesign of Festival Hall, $45,000 on vinyl tent side spans, $25,000 on picnic tables, and $20,000 on pipe & drapes, tables, and carts.

Civic Centre Bonded Projects

Over the past several years, while Mayor John Dickert has cut services, raised taxes and fees, and even declared that the City is broke, funds have flowed to buy items such as: In 2012 – $11,029 on Tables, Booths and Chairs; $4,383 on stage upgrades, $3,821 on carpet, $200 for concession bars, $5,623 for grounds equipment, $11,938 for catering equipment, along with other items (see complete list below). In 2013 – $13,477 on stage power, $4,715 on carpet cleaner, $21,875 on kitchen equipment, $6,928 on landscaping, and $25,000 for a dance floor (see complete list below).

Civic Centre Expenses

The money flows, but not to City coffers or tax relief; it flows to service and equipment providers, and in large amounts. Of concern, is there an accurate account of this City property, and is old equipment being disposed of as required by City of Racine Ordinance Sec. 46-32?

Disposal of personal property.
(a) Any personal property no longer usable in or suited to a particular department shall be turned over to the purchasing department to be disposed of in the manner provided in this section. The purchasing agent may assign any such property not exceeding $1,000.00 in value to any city department for further use, or may sell such property and pay the proceeds into the city treasury. No such property having a value in excess of $1,000.00 shall be assigned or sold without the approval of the mayor.
(b) The purchasing agent shall hold an annual auction sale to dispose of all surplus personal property not otherwise disposed of during the year.

Below is a list of the Civic Centre Commission members, taken from The City of Racine listing.

Civic Centre Commission Members

Residents who may be concerned with the spending and losses incurred at the Civic Centre can contact their Alderman at:

City of Racine Aldermen

john hostage

 Venu-Works of Racine LLC Venu-Works of Racine LLC a

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Question: Any Idea what happened in 2012 to give them a profitable year?

Answer: Any report of a profit in 2012 was in error. The 2012 Audited Financial Report evidences that the Civic Centre lost $705,528. Financial reports can be found by clicking HERE.

2012 Civic Centre Audit

Racine Exposed put together a compilation of the numbers used in the 2012, 2013 and 2014 Budgets for the 2012 Civic Centre Budget to document the changes in the numbers over time. The numbers reported in the 2014 Budget are not consistent with the 2012 Audit, and were likely reported in error.

2012a

The Parking Enterprise. The Mayor reported the 2012 loss as $450,764, while the Audited Financial Report recorded the loss as $460,433, and the loss was estimated at $371,211. The estimated loss for 2013 is $662,390, however the actual is not in yet. The 2014 estimated loss of $330,379 will likely turn out to be fanciful at  best when the actual numbers come in.

Parking Enterprise Budget

Transcript:

Alderman Sandy Weidner: Thank you Mr. President, I have 3 questions related to this amendment.  My first question would be, I believe for Dave Brown, regarding the Mayor’s statement in regards to Sister Cities and the change of its focus from being relationship building to more of a business building. Would it be more appropriate for the funding for the Sister Cities to come from – rather than levy to come from the shared revenue funds, if the mission of the Sister Cities has changed?

Dave Brown: Well, that is a philosophical question I guess that I am not in a position to answer. That would be the decision of the Mayor when he’s putting the budget together, and this body as to what you feel is best.

 Alderman Sandy Weidner: Well, then I…

Dave Brown:  Either, either could be used

Alderman Sandy Weidner: I guess I’ll redirect that same question then to the Mayor.

Mayor John Dickert: If we should be taking this out of shared, er, the IGA fund?

Alderman Sandy Weidner: Correct, yes.

Mayor John Dickert: Is that what you’re talking about? The interdepartmental government affairs fund? Uh, where that fund is right now, and the sheer volume of organizations and developers that we’re talking to I wouldn’t want to take an additional dime out of that fund. It is getting extremely thin and the amount of work that we’re doing currently with the number of investors and developers we’re talking to I don’t think that we have, uh, I think actually that we’re going to run short on those funds soon.

Elections have consequences.

College Application

Alderman Sandy Weidner: Dave, what is the balance on that IGA fund?

Dave Brown: That is something I do not have right now. I can get it, get it for you, but I do not have that available at this moment.

Alderman Sandy Weidner: Do you have a ballpark?

Dave Brown: No Ma’am.

Alderman Sandy Weidner: OK.

Why was the City of Racine Finance Director Dave Brown at a meeting to discuss the budget if he wasn’t prepared to discuss the budget? What do the taxpayers pay him to do?

DB

Mayor Dickert’s Shady Deal and Stealth Property Tax Increase

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As beleaguered and overtaxed residents of Racine currently face a water rate increase, a RUSD referendum to raise school taxes forever by $7M annually, loss of tax base from Root Works, higher sewer rates, and paid out thousands of $$ in bonuses to DPW supervisors, Mayor John  Dickert effects another Stealth property tax increase on City of Racine residents as the plans to purchase the Mound Avenue properties was approved. Root River Council INC. members Monte Osterman and Marty DeFatte, who plan to benefit from the sale, should thank the taxpayers of Racine.

Root River Council Inc

Previous posts that covered many of the shady aspects of this Development include:

RootWorks – Cui Bono?

and

Is Monte Osterman’s Lobbying Organization, (The) Root River Council Fraudulently Claiming To Be Non-Profit?

May 21, 2014, from The Journal Times:

RACINE — The city can move forward with a goal of acquiring properties along Mound Avenue in hopes of transforming 3.2 acres of riverfront property in a sprawling recreation area.

The City Council voted 10-1 Tuesday night to approve part of the RootWorks: Root River Corridor Redevelopment Plan. It calls for the city to acquire five parcels across the street from the former Western Publishing building. That area will be turned into a bike path, outdoor classroom and scenic overlook. The properties slated for redevelopment are at 1231 Mound Ave., 1251 Mound Ave., 1269 Mound Ave., 1281 Mound Ave. and 1287 Mound Ave.

Racine Exposed reviews the Property Tax revenue that will be lost and must be passed onto the ever shrinking number of parcels that still pay property taxes in The City of Racine:

1231 Mound Avenue:1231 Mound Ave.

1251 Mound Avenue:1251 Mound Avenue

1269 Mound Avenue:1269 Mound Avenue

1281 Mound Avenue:1281 Mound Avenue

1287 Mound Avenue:1287 Mound Avenue

That’s 5 properties which were paying property tax that are going to be removed from the tax roles for a questionable project in an area that makes no sense, but it does reward Monte and Mary Osterman for working on John Dickert’s mayoral campaign. Monte Osterman and Marty Defatte, through their Corporate lobbying organization, Root River Council, INC.,  have set themselves up to benefit from the taxpayer’s purchase of these properties. Monte Osterman’s business, Osterman Granite and Marble will receive “relocation expenses”, while Marty Defatte expects to receive commissions from the sale of 1251 Mound Avenue.

1251 Mound Avenue

The total value of the properties is currently assessed at $337,000, while the property tax revenue that is lost will be shifted to the bills of others.

The Total Property Tax Burden that is to be Shifted: $12,526.90

The cost to acquire the properties is $484,552. YET – wasn’t Mayor Dickert recently removing streetlights and asking non-profits for donations because the City was so broke? Strange how that works.

Appraisals 2

Interestingly enough, the Owner of 1231 Mound Avenue is the Mound Avenue Association, LLC, which is a division of the Johnson Redevelopment Corporation, 1525 Howe St. That is the address of the  Johnson Wax Research Tower property.

Mound Ave Association

It is interesting to note that this is not the first time that Johnson Wax took one of it’s properties off the tax roles under very shady circumstances, while City of Racine Officials bent the rules and hid details from the public. From the  Racine Post:

June 1, 2009

SC Johnson, city emails offer intimate look
at how company secured tax exemption

Foster+Partners rendering of Project Honor’s Fortaleza Hall being built on SC Johnson’s Racine campus.

SC Johnson used considerable influence, resources and ingenuity to convince former Mayor Gary Becker and Gov. Jim Doyle to approve a property tax exemption for the company’s Frank Lloyd Wright buildings and the new Fortaleza Hall, according to company emails obtained by RacinePost.

The collection of emails from 2007 and 2008 provide an intimate look at SC Johnson’s top executives orchestrating the deal that one email from an SCJ vice president suggests could save the company $400,000 a year in property taxes. SC Johnson Spokeswoman Kelly Semrau verified that the emails were authentic, but said some of the emails provided to RacinePost were taken out of context.

We’ve reviewed the emails and and are reprinting select quotes from them as they relate to Becker’s deal with the company to trade the property tax exemption for money for the Uptown arts district.

The emails show SC Johnson sought the exemption to limit the amount of taxes it’s required to pay on the new building under construction on the company’s Racine campus. They also show a close tie between Becker’s plans for Uptown and a property tax exemption, and SCJ’s ability to successfully lobby the governor for the exemption.

All told, it was a remarkable effort by SC Johnson to minimize the company’s taxes, and a questionable decision by Becker to support the exemption — which ultimately will cost the city, county and RUSD a fortune — without making it public.

Read the entire Racine Post article, SC Johnson, City Emails Offer Intimate Look at How Company Secured Tax Exemption: HERE

Of course, once the properties have been acquired, removed from the tax roles, and the tax burden shifted, the real spending can begin for the work necessary to transform these properties into a bike path and outdoor classroom. Cui Bono?

The incessant promise is that these projects will bring Employers in and reduce taxes. When has John Dickert or the Racine Common Council EVER proposed a tax cut because of the success of one of these projects, and where are the jobs?  Don’t hold your breathe, Root Works will be for City Taxpayers what the Belle Harbor Boondoggle and the ReefPoint Marina purchase is to the County Taxpayers.

Root Works Ripping Off The Taxpayer Again

May Property Report

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The May Property Report is now up, Click HERE to see the complete report.

Some Highlights from the May Property Report:

Foreclosure Statistics:

Wisconsin Foreclosuresmerry-christmas-christmas-Racine foreclosures

Pervert Alert!:

Gary E. Becker bought 400 Lombard Ave, which he is currently remodeling. His officially declared living residence is still at 525 S. Green Bay Rd. Mt. Pleasant, WI. Gary E. Becker’s property at 400 Lombard Ave. is only a few blocks from the Zoo and Racine’s North Beach. Children beware.

Gary Becker

400-lombard-map

400 Lombard Avenue 2

 

Ironically enough, 400 Lombard Avenue is just blocks away from where Drunk Republican Racine County DA Rich Chiapete crashed his car, ran and hid from Police, then tried to lie his way out of a ticket. Has the Northside of Racine gone to Hell? It’s not just Stranger Danger anymore.

The Belle Harbor Boondoggle

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A view of Belle Harbor Marina from Google Maps. The Map below is interactive.

 

May 31, 1990, from The Journal Times:

County buys marina

But after a two-hour negotiation session Tuesday and four more hours of talks Wednesday, county officials upped the ante in exchange for some more property.

Kornwolf praises deal The county board will tour the marina Saturday and act on the sale in a special session Tuesday. The closing is expected before July.

“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,” he said, explaining the marina will be bought with money already accumulated, mostly through land sales.

The county executive, County Board Chairwoman Jean Jacobson, Public Works Director James F. Rooney and Corporation Counsel Mark Janiuk entered talks with Belle Harbor to try to get a winter storage site for boats docked in the summer at Reefpoint Marina.

He called the price of $1.4 million – $800,000 of which will go to pay off loans – “marginable, but acceptable.”

“Believe me, this wasn’t easy,” he said. “There was a lot of give and take – mostly give on our part.”

“I really think the county got itself a damn good deal,” he said.

Even Kornwolf admitted, “We were tough with them.”

What the county will get – if the county board approves – is 4.1 acres, including a lagoon, 80 boat slips, a 10,000-square-foot building, a well for launching boats, and more.

Officials hope to rent out the slips and building, producing a net income of at least $60,000 per year.

City of Racine tax records indicate the land has a 1989 assessed value of $1,134,800, but the property is in an area overrun by growth.

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.

1990 was some heady times for Racine County Officials, and they were afraid that the deal of the century would get away for them, so they even paid EXTRA to close the deal before someone could outbid them for the Marina. They claimed that this project would generate substantial revenue and that it’s value as an asset would increase dramatically. But Fools and their money are soon parted – and once again, the Racine County Taxpayer Fool overpaid for what would become nothing more than a worthless liability by 2014.

Boondoggle: An expensive and wasteful project usually paid for with public money.

Yep – another Racine County Boondoggle. One of a growing list of many. If there was any justice for the taxpayer, some of the County Officials involved in this Boondoggle would be facing criminal charges. But the voters have forgotten, the names and faces have changed, and a new group of Racine County and City of Racine Officials are selling “Root Works“, along with County Ownership and Operation of ReefPoint Marina as the next get-rich quick scheme; and IT IS a get-rich quick scheme, for friends, cronies, and the politically connected, but NOT for the taxpayer. It is just another political wealth-transfer scheme and public rip-off.

2013 – Racine County Executive Jim Ladwig decides to sell the 1990 $1.4M County Investment, Belle Harbor Marina.

September 11,2013, from The Journal Times:

County seeks to sell Belle Harbor

YORKVILLE — The Racine County Board voted Tuesday to solicit bids to sell the Downtown Racine Belle Harbor Marina to an outside party.

According to County Executive Jim Ladwig, the county is seeking a buyer who will ultimately make the 32 Main St. property more valuable.

“Any and all ideas (for the property) are going to be considered and evaluated,” County Corporate Jon Lehman said Tuesday. “… It’s going to really be, ‘What can be done with this site?’ ”

Although the process and a timeline have yet to be finalized, Lehman said the county is tentatively planning to accept bids on the property for the next 90 days.

Now would be the time for the Racine County Taxpayer to profit from that initial $1.4M investment in 1990. According to the US Inflation Calculator, $1.4M in 1990 Dollars translates to almost $2.5M in 2013 Dollars; and that doesn’t include asset appreciation, or as Racine’s Realtors (and Tax-Assessors) remind property owners, “Property values double every 10 years

1.4m 1990-2013

A $1.4M investment calculated at 7% over 23 years = $6,636,742! A jackpot for the Racine County Taxpayer.

1.4M Compounded

90 days pass – and there are no offers on this investment opportunity of the century, which, in 1990,  Racine County Taxpayers paid a premium for, “All in all, I think we’ve got a great deal,” Kornwolf said. “When there’s a marina on the market, there’s always a threat somebody could step in.”

2014 – Belle Harbor Marina – the deal that Racine County Officials paid above and beyond top dollar for in 1990, now proves unsaleable on the open real estate market because…

The TRUTH about the Belle Harbor Boondoggle is found in Racine County RESOLUTION NO. 2013-71: 

From page 5: SUMMARY APPRAISAL REPORT OF ONE PARCEL OF LAND, THAT IS REFERRED TO AS THE BELLE HARBOR MARINA, LOCATED AT 32 MAIN STREET, IN THE CITY OF RACINE, RACINE COUNTY, WISCONSIN

Click on Image for BIG.Belle Harbor Marina Assessment Description

Some Choice Excerpts from the above:

The subject property is not being utilized as a marina due to insufficient water depth within the inner basin, a seawall along the perimeter of the site is in need of repair, boat slips are in disrepair, and there is a lack of overall market demand for the former operations associated with the marina.

Costs to repair the seawall, dredge the inner basin, as well as other costs to repair the integrity of the site are unknown. For purposes of this appraisal report, we have made the extraordinary assumption that the in-place seawall is not in need of repair and will insure the integrity of the site.

Is it more than ironic that current County Executive Jim Ladwig also rushed through the purchase of ReefPoint Marina and grossly overpaid for a run-down property? Racine County needs to get out of the real estate game and focus on the basic function of County government, NOT owning and operating a Marina.

The Appraisal found; with the caveat that “For purposes of this appraisal report, we have made the extraordinary assumption that the in-place seawall is not in need of repair”, my opinion of the market value of the fee simple estate in the subject property on an “As Is” basis, as of July 10, 2012, is:

ONE MILLION SEVENTY THOUSAND ($1,070,000) DOLLARS

That’s $330,00 LESS than what the County Taxpayers shelled out for the property in 1990! That is almost criminal!

Working backwards, $1,070,000 in 1990 Dollars is $609,114! In 1990, the County taxpayers overpaid by $800,000 because County Officials were incompetent and out of their league! That’s NOT surprising! Racine County Executive Jim Ladwig just did the same thing when purchasing ReefPoint Marina! See: ReefPoint Marina 28 Years Later – Where Is The Money? Why aren’t surviving Racine County Officials who were involved in this Boondoggle facing criminal charges?

2012 - 1990

As for the conclusion of the appraisal, dated July 10,2012:

“Given current market conditions in the southeastern Wisconsin market area and the property type involved, I feel an appropriate marketing time for the sale of the subject property is from six to 12 months with the property economically stabilized, assuming a reasonable and constant marketing effort. 

It is now two years later, June of 2014, and there is still no buyer in sight. The County is planning on “investing” in this site, beginning with the $80,000 starter grant to begin gathering the Millions of $$$ that will be necessary to complete the work. Any development will require taxpayer incentives and concessions, along with taxpayer guarantees to backstop any loans. You can count on it.

May 9, 2014, from The Journal Times:

County gets grant to fill Belle Harbor Marina

RACINE — Racine County has secured an $80,000 grant that will allow Belle Harbor Marina to be filled in to make a larger riverside redevelopment site.

County officials explained the grant will be used to close the opening in the river wall at Belle Harbor, which will be done this summer and fall. The County expects to use the spoils from the Pershing Park boat launch basin dredging project to fill in the harbor with soil. That will increase the size of Belle Harbor from 3.3 acres of hard surface now to 4.1 acres.

At the press conference, County Executive Jim Ladwig said the Belle Harbor lagoon is now too shallow with sediments to use without dredging, being only 18-24 inches deep. Filling it provides a better redevelopment site, he said.

“I feel it’s important to have a real high-quality development to be the gateway to (Downtown) Racine,” Ladwig said.

State Rep. Cory Mason, D-Racine, a longtime advocate for Racine riverfront development, said redevelopment of Belle Harbor Marina fits into the overall RootWorks revitalization plan.

“I think it will be one of the key redevelopment areas” to revitalize the Downtown Root River area, Mason said.

My, my how things have changed in Twenty-four years.  However Racine County Jim Ladwig and State Representative Cory Mason have a new taxpayer funded plan ready to go! Just add taxpayer $$$. It will be different this time. Promise. It seemed only like yesterday… With a flurry of signatures and delivery of a $10,000 check, Racine County officials Wednesday all but reeled in a marina – a prize they feared would get away. John Weiss and Ronald Primuth, owners of Belle Harbor Marina, 32 Main St., signed an option to sell their business to the county for $1.4 million. County Executive Dennis Kornwolf also pressed a pen to the 29-page document, and then gave Weiss a non-refundable check of $10,000 as down payment. The agreed-upon price is actually $100,000 more than county officials said they’d spend for Belle Harbor last week.

What’s a grant? It’s just another form of taxpayer funded give-away from another government alphabet agency. Local officials just love it when taxpayers are funding a project, but they don’t realize it.  What makes this Marina development so special is that it involves taxation at every level and many different jurisdictions, so you get Federal, State, County and Local taxpayers all involved along with taxpayer funded grants from a myriad of government alphabet agencies at every level. No matter what they government officials claim, it’s just your tax dollars at work enriching friends, cronies and the politically connected. Just ask Root River Council INC. members, Racine County Supervisor Monte Osterman, Real Estate Agent Marty DeFatte, and Racine County Treasurer Jane Nikolai.

Previous Posts:

Is Monte Osterman’s Lobbying Organization, (The) Root River Council Fraudently Claiming To Be Non-Profit? HERE

RootWorks – Cui Bono? HERE

 May 21, 2014, from The Journal Times:

Plan for west bluff of Root can advance

RACINE — The city can move forward with a goal of acquiring properties along Mound Avenue in hopes of transforming 3.2 acres of riverfront property in a sprawling recreation area.

The properties slated for redevelopment are at 1231 Mound Ave., 1251 Mound Ave., 1269 Mound Ave., 1281 Mound Ave. and 1287 Mound Ave. They currently consist of a few parking lots, a former industrial building, a storage building and a house.

Sadowski said if the city could not come to a purchase agreement with any of the property owners, it would decide then whether to use eminent domain — based on how crucial to the overall redevelopment the property was.

If the city did use eminent domain to acquire any of the parcels, Sadowski said, it couldn’t use the DNR grant money to pay for the acquisition of that particular parcel.

1251 Mound Avenue

And so begins the Root Works Boondoggle. The first step is to remove five productive properties that are paying property tax OFF of the tax roles, shift the taxes to others, and then spend millions creating a “recreational area”, for which there is no demand. Of course, the former Belle Harbor Marina will also play a crucial role in Root Works plans and will, in the future, generate millions in revenue and business for the County and the City. If you don’t believe it, just ask County Executive Jim Ladwig, Mayor John Dickert, County Supervisor Monte Osterman or Real Estate Agent Marty DeFatte.

Click on Image for BIG.Root Works Ripping Off The Taxpayer Again

This time it will be different. The lies will just be recycled.

Promise. Just trust the words of the deceased former County Executive Dennis Kornwolf, and you could always ask James Rooney, who is still around…

Racine County officials Wednesday all but reeled in a marina – a prize they feared would get away. “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.

 

ReefPoint Marina 28 Years Later – Where Is The Money?

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A view of ReefPoint Marina from Google Maps. The map below is interactive.

 

The Marina Webcam is HERE, with live action.

NATIONAL NOTEBOOK: Racine, Wis.; A Catalyst On the Harbor
By JENNIFER STOFFEL
Published: November 30, 1986

HOPES are running high in this southern Wisconsin city of 86,000 for the success of a $35 million project on the Lake Michigan shorefront. The city and Racine County have already begun their parts of the enterprise and a private developer will crank up its project early next year.

The creation of 1,000 private boat slips alone is expected to bring new life to the city’s lackluster economy.

The Racine County Board first proposed a residential/marina project more than two years ago to bolster the city’s eroding economic base. But a program to finance the project eluded the planners.

Late last summer, the county accepted a proposal by a locally based developer, Edgewater Associates of Racine Inc., to develop a complex that will include 1,000 boat slips, an eight-story, 76-unit condominium and a restaurant.

To comply with state and Federal laws restricting commercial use of public lakebed property to ”water oriented” activities, the restaurant was scaled down from a capacity of 300 diners to 100. The Edgewater complex is scheduled for completion by late summer 1987.

In return for the right to build on what had been public property, the county expects to collect $10 million from Edgewater over the 20-year-term of its license to rent slip and winter-storage space, as well as $300,000 a year in property taxes.

”Without question the project is affecting the entire downtown,” said County Executive Leonard Ziolkowski. ”It is much more than just a marina. It is the biggest public project in county history.”

The county will continue to be responsible for breakwater construction and dredging and will pay the $750,000 cost of design and engineering work. The city is also financing the construction now under way of a $4 million lakeside festival center and conference building.

The development of the harbor and its environs is expected to generate 420 jobs and inject $29.5 million a year in the local economy, according to a University of Wisconsin study.

It is now 28 years later, and by all accounts, ReefPoint Marina, Festival Hall as part of the Civic Centre Complex, Belle Harbor Marina, Downtown Racine, and The City of Racine itself should be experiencing a financial windfall from the economic activity that was promised with this $35,000,000 plus Development. Instead, it has been a spectacular failure that continues to rely on taxpayer subsidies. Ownership of ReefPoint Marina has reverted back to the County (taxpayer), while the Counties sale of Belle Harbor Marina caught no bids because both Marinas have no value on the open real-estate market. Today they are not profitable,  there is no demand for the services available (overcapacity), and they will require massive investments just to maintain the infrastructure, much less any “upgrades”. The taxpayer loses again!

How ironic is it that the Racine County taxpayer once again owns and operates the Marina, along with the responsibility for bearing the costs, when on May 23, 1986, Racine County Executive Leonard W. Ziolkowski told voters, “If there was a single reason for objecting to the marina, it was that the private sector should be operating it. We have found a dance partner.”

Click on Images for BIG:May 23, 1986 Journal Sentinel

January 16, 2012 7:26 pm from The Journal Times:                                   By Michael Burke

RACINE COUNTY — The county moved a step closer to buying Reefpoint Marina for $6.7 million in cash and waived payments Monday.Monday the purchase price was released after the county received a signed letter of intent from the owners group, Racine Harbor Marina LLC. Racine County Executive Jim Ladwig said he waited to release the purchase price partly because the county had Reefpoint appraised for $7.9 million, and he wanted to make sure the deal was solidified. The county is obligated by the 1987 license agreement to take over the marina after this year.

“This is not Jim wanting to buy a marina. I tell everyone I was a sophomore in high school when this contract was signed.” He added, “We’re the guarantor on the mortgage, so we’re on the hook one way or another.”The county also takes over the contract to run Belle Harbor, on the Root River just north of State Street. The county already owns the land and improvements there.

Skipper Buds CEO Mike Pretasky Sr., one of the RHM owners, said most of them are at an age where “it was just time to move on” past the investment they’ve owned for many years. “Certainly, the economy’s not getting any better at the moment,” Pretasky said. “It was kind of a neutral investment; it hasn’t really done anything.”

It would be difficult to sell Reefpoint to another private group because financing would be hard to get, he said.

The improvements at Reefpoint Marina, built over county-owned lake bed, last year were assessed at $4,543,400, and the owners paid $115,740 in 2011 property taxes. Under county ownership, the marina will not produce tax revenue.

Despite the requirement to acquire Reefpoint, Ladwig said he thinks the purchase can turn out well, “Because it will allow us to basically revitalize the facility.”

To Paraphrase the above, while it is true that County Executive Jim Ladwig was contractually obligated to “do something” – he paid top dollar for a Marina that was run down, losing money, unsaleable on the open real-estate market, in need of costly infrastructure replacement and repairs, and which was a terrible investment because it never generated the substantial return, as promised by the Politicians. Skipper Buds was tired of running an unprofitable, declining, and deteriorating  operation, so they demanded payment from the County (or they may not pay the Mortgage) and said, “See you later”. Now the County taxpayers foot the bills.

The Milwaukee Business Journal was more succinct:

MBJ Jan 25,2012

According to The Journal Times article,  “The Owners”, Skipper Buds paid a measly $115,740 in property tax for 2011. YET – the taxpayers were promised in 1986 that $300,000 a year would be coming in.  In 2011 the taxpayers didn’t even see HALF of the  $300,000 that was promised, much less any returns adjusted for inflation.  According to the US Inflation calculator, 1986’s $300,000 in 2011 dollars equals = $615,708.94. WHERE IS THE MONEY?

$300,000 adjusted for inflation

Yet, even that assessment might be too kind because nobody invests without expecting an increased return over time. One of the most commonly used rates of return is 7%, which is a doubling every ten years. Imagine the outcry if County Pension funds had been used to fund the Marina, instead of the Racine County Taxpayer.

The original investment to build the harbor infrastructure and other improvements was stated at $35M, which in 2014 dollars translates to $75M. Yet today the biggest asset, the County Marina, has no value on the open real estate market.

35M over time

The University of Wisconsin did a study for the County and told the taxpayer: “The development of the harbor and its environs is expected to generate 420 jobs and inject $29.5 million a year in the local economy, according to a University of Wisconsin study.”

420 more jobs? Where are they? West Marine is out of business, along with Main Marine and Ski. Those businesses, along with so many others in Downtown Racine which have closed, are for sale, unprofitable, or just another empty storefront, PROVE that the Marina isn’t generating Business or jobs. The most popular signs in Downtown Racine are For: Sale, Lease, Rent, and Marty DeFatte.  Meanwhile, the County Board only authorizes 8 positions to work at ReefPoint Marina in 2014. WHERE ARE THE BUSINESSES AND JOBS?

With the new business activity projected  to inject an additional $29.5M  into the economy yearly, compounded over 28 years, and with a growth rate of 7%,  the Marina/Downtown area should be seeing an additional $200M in business in 2014.  There is absolutely no evidence for this, as Downtown is still the Welfare Queen of Racine, businesses continue to go bust, TID’s have been expanded and extended, taxes and debt continue to rise, services are being cut, and every Racine County taxing authority claims to have a yearly budget crisis. WHERE IS THE MONEY? 

IF the Wisconsin Lottery can fund property tax relief, why isn’t the Racine County marina providing Property Tax Relief and funding Schools? The truth is, the Racine County Taxpayer is funding the Boaters and Downtown Racine. WHERE IS THE PROPERTY TAX REVENUE AND RELIEF?

200M

So in addition to every projection of jobs, revenue, and future outlook being a LIE from the lips of the Politicians, County taxpayers now get to own and operate the Marina, just the opposite of what County Politicians promised. It was on May 23, 1986, Racine County Executive Leonard W. Ziolkowski told voters, “If there was a single reason for objecting to the marina, it was that the private sector should be operating it. “

December 05,2012, from The Journal Times:                                            By  Michael Burke

Racine County to operate Reefpoint Marina in 2013

RACINE — The County has decided to operate Reefpoint Marina next year instead of hiring a private company.

Going into last summer, future options included securing a long-term operator. But Ladwig said because the County owns the assets such as the slips, “It’s more challenging to find people interested in a long-term opportunity.” He called the interest level “lukewarm.”

No private sector Company is interested in running the Marina at either a loss, or with a very low rate of return on revenues, so the County  taxpayer is stuck with it.

The financial situation at ReefPoint Marina was so bad that Spinnakers wasn’t profitable and went out of business. In response, County Executive Jim Ladwig took bids for a replacement, received only one, from Reefpoint Brew House, and still isn’t charging them for rent of a County taxpayer funded restaurant/bar facility. That’s WRONG.

From the 2014 County Executive Budget:

2014 County Budget Revenues

How about the Anchors Away convenience store, which sells Liquor, Beer, Food, Ice and other items? Where are the revenues, or rent  from that?  Racine Exposed could find no matching budget item, BUT Racine Exposed found that The City of Racine issued a liquor license to  “Ayra’s on the Lake” at 2A Christopher Columbus Causeway.

Ayra's on the Lake

And that the 2014 County Executive Budget doesn’t include Convenience worker positions.

Authorized Positions

In 2014, ReefPoint Marina achieved approximately 42% Annual Slip occupancy and increased Transient Slip rentals in 2013. That’s it? 42%? With a claimed capacity of 921 slips, that means the Marina only  rented 387 slips in 2014.  Meanwhile, the County can’t even collect rent from the privately owned businesses which are operating a Restaurant/Bar and a Convenience Store in a County taxpayer provided  facility. Is it any wonder why Skipper Bud’s ran away from ReefPoint Marina while no one else would take it?

Performance Measurements

To made this story even more pathetic and sordid, Racine County Executive Jim Ladwig told The Milwaukee Business Journal that he purchased ReefPoint Marina; “With the vision of turning it into a destination spot.” What a slap in the face to the Racine County Taxpayer! That was it’s original intent and purpose, back in 1986!

MBL Jan 12, 2012

It is obvious that the Politicians rely on the voters having a short memory and believing every lie they tell. Twenty-eight years ago, the good people of Racine County set to build what County Executive Leonard Ziolkowski described as: ‘‘It is much more than just a marina. It is the biggest public project in county history.” Also claiming: “Without question the project is affecting the entire downtown.” Federal, State, County and City taxpayers have spent tens of millions to build a destination spot with Marinas, a Radisson Hotel, Festival Hall, Restaurants/Bars, a Convenience Store, a Pool, Spas, Private Parking, Walkways, Bike Paths, Beach Development, Piers, Fish Cleaning Stations, a Fountain, High End Condominiums,  every type of store a shopper might want in a Downtown Racine that is subsidized by the taxpayer, and doesn’t pay it’s fair share. A Lake this is stocked with Salmon and Trout, courtesy of the taxpayer.  It was built as a destination spot and was to economically revive Racine. It should be bringing in more than $200M annually and Racine should have the lowest tax rates and the happiest merchants around.

Twenty eight years later it has also proven to be the biggest boondoggle in Racine County history. It has not only failed to achieve every one of it’s goals, it is now failing and requires taxpayer subsidies. It is time for the County to get rid of the Marina and to stop subsidizing a failed development that can’t pay for itself, much less generate a return for the taxpayer. Whatever it takes – it must be dumped and let the private market find a solution. They will, and this time, it might actually work. Racine County needs to stop throwing good money after bad and unfairly subsidizing services and businesses that the private sector must compete against.

 

While there is an overcapacity of slips available in the Harbor, Racine continues to operate two very expensive, unneeded, unnecessary and Seasonal Lift Bridges, which have no commercial purpose. While Mayor John Dickert continues to whine about funds, his latest whine is HERE, The City of Racine will waste $518,919 so DPW Commissioner Mark Yellen can operate these two Taxpayer Boondoggles. Why aren’t these funds being used to fix roads?

Lift Bridges

 

NEXT: The Boondoggle of Belle Harbor Marina.

 

Racine’s Water Utility Lays Financial Siege To Its Customers

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April 2, 2014 from The Journal Times. By Cara Spoto:

Water utility requests rate hike

RACINE — Racine Water Utility customers could see their quarterly water bill increase by $4 to $6 this summer or fall, but only if the Wisconsin Public Service Commission gives the hike a green light. On Tuesday, the utility’s Waterworks Commission voted 4-0 to allow Racine Water and Wastewater Utilities General Manager Keith Haas to submit an application to the PSC asking for permission to increase the utility’s current rate.

Now that he has the permission from the Waterworks Commission, Haas said Tuesday that he plans to submit the application by the end of the week. Once the PSC receives an application it typically takes the state body three to six months to make a decision and issue a rate order, Haas said.

The rate increase is needed, he said, to pay for the mounting costs of providing water service to the customers the utility serves. In addition to seeing its annual PILOT (Payment in Lieu of Taxes) payment to the city increase by roughly $600,000 over the last three years, the utility has seen a 9 percent drop in water sales.

From the Waterworks Commission, April 1, 2014 meeting. To no one’s surprise, Mayor John Dickert led the charge to increase fees on Racine’s Water Utility customers.

Click on images for BIG.

Waterworks Commission April 1

There was also the matter of the non-represented water utility employees asking for a retroactive raise:

Waterworks Commission April 1 Raises

What does the General Manager, Keith Haas make? The latest information Racine Exposed could find was for year 2012, when he was paid $110,100. His tax-free benefit package was worth $31,108 in 2011.

Keith Haas

In a City that has come to expect lies and corruption from Racine City Hall, which always claims to be broke, is it any surprise that while Keith Haas told the Journal Times on April 2, 2014: “Haas said Tuesday that he plans to submit the application by the end of the week,”, his statement is contrary to official PSC records which show that the completed application was already submitted by 9:34 A.M. on April 2, 2014.  It’s a minor quibble, but why make a public statement that you know is false, especially when Mayor John Dickert already has a credibility problem? It’s far too common in Racine.

PSC History Racine Water Utility

The Link to the PSC website is HERE, and the screen you will see is shown below. You will need to click on tabs and documents to open and view those areas. I urge you to do so. It is also important that you notice that Public Comment is now being accepted, and you need to provide one.

PSC commission

You need to make a Public Comment and tell them NO! to John Dickert  raising fees to fund his Development Projects such as Root Works and his Porters TID 17 through Water Utility Revenue Bonds. You have until October 31,2014 to submit a comment. Please do so, as soon as possible. Below is what the Public Comment screen looks like.

Public Comment

Below is the formal request submitted by General Manager Keith Haas to the PSC for raising the water rates.

Water Rate Increase

Racine Exposed has previously reviewed the City of Racine’s control over the Water Utility and came to the same conclusion as the PSC, that Racine Water Utility customers were already being gouged with the current water rates while revenues are being siphoned off to fund Mayor John Dickert’s Development Projects. While this is legal, the City of Racine is endangering the ability of residents and businesses to afford fresh, clean water because Mayor John Dickert, in the opinion of Racine Exposed, is abusing this privilege. It is why control over the Water Utility and it’s revenues needs to be TAKEN AWAY from Racine City Hall.

See the post, It’s Time To Review The City of Racine’s Control Over The Water Utilitity, by clicking HERE.

The Conclusion from the PSC Pilot Final Report, PSC REF#:180955 (available under Documents) s shocking and reveals the depth of abuse that is going on with Water Utility revenues:

Conclusion: The cost of PILOT payments is passed on to ratepayers in the form of higher rates. PILOT payments can be a significant component of a municipal water utility’s revenue requirement, meaning a large portion of a customer’s water bill is actually being paid to support local government operations rather than water production and distribution. Because water utilities are capital-intensive, the current method for calculating PILOT may be a disincentive to replacing aging infrastructure and making improvements necessary to ensure adequate service and protect public health. In addition, while the original purpose of providing for a tax equivalent was to ensure that municipal utilities were treated on par with privately owned utilities that paid a property tax, property taxes for privately owned utilities were replaced with a gross receipts tax in 1985. As shown by this analysis, PILOT payments for most municipal water systems exceed the amount that they would otherwise pay as a gross receipts tax.

Mayor john Dickert has every incentive to raise Water Utility rates as high as possible, as it is made amply evident in the financing options for Porters TID #17: This should also be a WAKE-UP call to other local governments like Caledonia, Mt. Pleasant and Sturtevant, that there is a need to have the law changed in Madison before the City of Racine drives away more businesses, jobs and homeowners!

Water Utility Revenue Bonds

Is Racine making millions off of Sewer and Water Utility Revenues? YOU BET! Below are reproduced sections from Racine’s 2012 Audited Financial Report showing a Water Utility profit from PILOT for $2,858,132 which was  $500,000 more than expected and due to Racine’s 2011 rate increase!

water utility 2014 budget

Water Utility Expenses (red) Versus Revenues (blue).

Water Utility Chart

In 2014 The City of Racine expects to receive an excess of $2,366,000 in water utility revenue, which will fund Mayor John Dickert’s Redevelopment Authority  Projects and daily government operations – NOT Waterworks projects! This is BLATANT PRICE GOUGING and endangers the future financial health of Racine’s water utility along with hurting struggling families, those on fixed incomes, and creating a hostile and anti-business climate!

2014 Racine Budget Water Utility

The City of Racine also demands an outrageous and excessive amount of PILOT payments from the water utility to fund it’s daily operations! It is expecting $2,366,000 in 2014! That is more evidence of price gouging and creates a hostile and anti-business climate.

2014 City of Racine Miscellaneous Revenue

In fact, this increase, along with likely additional future increases in Sewer and Water fees and rates are expected to fund even MORE Redevelopment Activities in Racine, as evidenced by the City of Racine 2014 CIP. There is even a TID 18 referenced, YET,  Racine Exposed can find NO other official documents that reference this TID, and the Racine Common Council has NOT approved any such plans. For a TID to be approved would require Jim Ladwig, David Hazen, Bryan Albrecht and the State to sign off on it, because it freezes taxes in that area. Where are the documents? These future projections are subject to change, but Water and Sewer Revenues and the issuance of Utility Revenue Bonds will be a major component.

2014 CIP Redevelopment Projects

IT’S TIME FOR A RACINE COUNTY WATER SUMMIT!

While it’s to be understood that The City of Racine should be properly compensated for hosting and providing services to the Water Utility, some restraints needs to be Legislated to ensure that The City of Racine does not encumber the Water Utility with debt for unrelated Capital Improvements, especially unrelated and risky Capital Improvement projects. Nor should The City of Racine be allowed to continue in passing on to surrounding Communities the ever increasing costs of their local government operations by hiking Water and Sewer fees and rates or issuing Utility revenue bonds.

Time is of the essence for the Racine Water and Sewer Utility dependent Communities to sound the alarm and take action at the Legislative Level to control The City of Racine because these are difficult financial times for all and the Water Utility is too precious and necessary a resource to allow the predatory and selfish actions of a few government officials to jeopardize the financial health of the Water Utility and the Communities and Businesses that depend on fresh, clean and affordable water and sewer services.

 

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