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Cudahy lays claim to troubled Iceport site

Judge rules in favor of city's foreclosure on land

March 24, 2009

The city of Cudahy has jumped its first hurdle toward gaining ownership of the abandoned 26-acre former Iceport property.

On March 19, a Milwaukee County judge ruled in favor of the city foreclosing on the land, located at the southeast corner of Layton and Nicholson avenues.

Mayor Ryan McCue said there is a two-month "redemption" period in which Sportsites LLC can pay the city about $34.8 million - part of the stipulation and order Cudahy and Sportsites agreed to in August 2007 as part of the foreclosure action - to regain ownership of the property.

If Sportsites does nothing and the two-month redemption period expires, Cudahy will have the ability to gain ownership of the parcel, City Attorney Paul Eberhardy said.

Heading for auction

City officials say the land will be up for auction through the Milwaukee County Sheriff's Department in about two months.

McCue said the city can bid on the property for about $30 million, but Eberhardy said a decision has yet to be made by either the Community Development Authority or the Common Council on such a bid.

If someone bids more than $30 million, the city would collect the money to pay off the mortgage on the property and the highest bidder would take ownership of the land.

"I don't foresee someone outbidding the city of Cudahy," McCue said. "I'm pretty confident that we'll be able to get the land back."

Brad Hoeschen, Sportsites' attorney, said the property is not worth $30 million, and that Sportsites will likely not pay that amount. He said Sportsites is looking at alternatives such as appealing the judge's decision.

Resurrecting Wal-Mart

Development on the site has been stagnant for about five years after Sportsites was unable to finance a $29 million state-of-the-art ice facility with five skating rinks.

Hoeschen said Sportsites, if it regains ownership, could sell the property to Continental Properties, which in 2007 was interested in acquiring the land to construct Cudahy Station, anchored by a Wal-Mart Supercenter, before project financing collapsed.

Earlier this month, Continental representatives submitted a new concept for big-box retail to the CDA, which again entails a Wal-Mart plus some restaurants.

 

City never owned land

Jack Vaccaro, former economic development coordinator, said the city never actually owned the parcel because the site was contaminated. But when James Kasten of Sportsites purchased the land for $2.8 million from BT Squared, the city reimbursed Sportsites with a $2.8 million payment.

The city then put a mortgage out on the property to prevent Sportsites from selling it and leaving town, he said.

"The biggest mistake the city made was letting (Sportsites) start the project when the financing was not in place," Vaccaro said.

If city takes ownership, it can determine how the property should be developed.

Prized land

"This is the most valuable parcel of land in the city of Cudahy," McCue said. "There are no bad ideas when it comes to developing this land."

Fritts is in the process of compiling a market analysis to determine what types of businesses would attract area shoppers.

To ensure that the city does not encounter another "Iceport fiasco," McCue said officials will make sure a developer has the necessary financing to proceed with a proposed development.

"I'm very excited about the outlook for the city of Cudahy," he said. "It's nice to finally be able to put the Iceport behind us and move forward."

Chantel Balzell can be reached at (262) 446-6602

At a Glance

The city of Cudahy has invested $5.4 million in the Iceport site:

$3.54 million in acquisition costs

$371,619 in legal fees

$1.4 million in development costs

$77,112 in Earth Tech fees

$21,837 in consultant fees

Source: City Accountant Bruce Schuknecht (does not include interest from loans)

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