Friday, November 30, 2018

$2 million naming-rights deal for alumni center upset by actions of UW officials, foundation alleges

Photo by Miles Maguire
The UWO Foundation says it may sell the alumni center if the UW System continues to resist paying a court judgment.

By Miles Maguire

A $2 million naming-rights deal for the UW Oshkosh alumni center has been put on ice after the donor canceled a $500,000 check upon learning that an agreement he approved with university officials did not match his intent, court papers show.

The University of Wisconsin Oshkosh Foundation alleges in court filings that the naming-rights deal as well as several other major gifts were targeted in repeated acts of interference by university officials, possibly including UW System President Ray Cross.

In addition, according to a sworn affidavit from former state Sen. Jessica King, UW Oshkosh Chancellor Andrew Leavitt spoke to her at a memorial for longtime professor Dr. Kenneth A. Grieb and told her that future gifts in his name should be directed away from the university foundation.

King is the executrix of Grieb’s estate and had just informed the chancellor that Grieb “had left a generous gift through the UW Oshkosh Foundation for the International Studies Department,” the affidavit states. Grieb died this summer after teaching for more than 50 years at the university.

The allegations of state officials directing donations away from the foundation represent the latest skirmish between the university and its long-established fundraising arm. Rep-resentatives of Cross and Leavitt were asked to comment for this story. They declined to do so.

The dispute over charitable gifts has surfaced as the UW System is attempting to keep the UWO foundation from collecting on a multimillion-dollar judgment that would allow it to emerge from bankruptcy.

If the impasse continues, the foundation says, it may attempt to sell the Alumni Welcome and Conference Center, which overlooks the Fox River and which is currently used by the university rent free. 

Friday, November 16, 2018

Oshkosh waterfront eyed for $32 million project that would contain offices, restaurants, residences

This concept drawing was submitted to the city's Redevelopment Authority for the waterfront project.

By Miles Maguire

A development group that includes two Iowa companies and a Madison investor is proposing to build a two-building, $32 million complex overlooking the Fox River at the corner of Jackson Street and Marion Road. 

The city’s Redevelopment Authority agreed Nov. 12 to accept an option to purchase the parcel from an Iowa company called Grand Management LLC. According to City Manager Mark Rohloff, the developer has three partners: ECHO Development Group, Lancaster Investments and Slingshot Architecture. 

“The project would include two five-story mixed use buildings,” Rohloff said. “Retail and office uses would be located on the ground floor with residential uses located on the upper floors.” 

He warned that parking could be an issue, and the project still needs to go through multiple development reviews.

Slingshot is based in Des Moines, and Echo is in Cedar Falls. Lancaster is headed by Jon Lancaster, a former car dealer in Madison. 

Local developer Andy Dumke had also prepared a proposal for the site but decided to withdraw it.

Wisconsin's case against UW Oshkosh Foundation takes another hit as second judge shoots down key argument

Photo by Miles Maguire

A judge in Dane County has ruled that UW Oshkosh transactions with a foundation pass constitutional muster.

This post has been updated.

By Miles Maguire

A second judge has sided with the UW Oshkosh Foundation on the issue of whether the financial assistance promised by the university violated the Wisconsin Constitution.

Dane County Circuit Court Judge Richard G. Niess ruled Nov. 6 that the UW System Board of Regents has incorrectly interpreted state law in arguing that the constitution prohibits the kind of agreements made between the foundation and UW Oshkosh.

His reasoning echoes that of U.S. Bankruptcy Judge Susan V. Kelley, who has been overseeing the foundation’s bankruptcy case and has ruled that the state owes the foundation millions of dollars.

Niess made it clear that he did not buy all of Kelley’s legal opinion, and parts of his ruling were favorable to the UW System.

Niess’ ruling came in a case involving First Business Bank, which financed one of the university’s biodigester projects, and Bank First National, which financed the construction of the Alumni Welcome and Conference Center on the Oshkosh campus.

The constitutional question is critical to the legal morass the university is in. That’s because the UW System has hung much of its legal and public relations strategy on the argument that promises by UW Oshkosh officials to support the foundation were prohibited by the state constitution.

In addition to making this a primary defense against the claims from the foundation, the UW System advanced the constitutional argument twice in its initial civil lawsuit against former Chancellor Richard Wells and former Vice Chancellor Thomas Sonnleitner. The same constitutional arguments are contained in the subsequent criminal case against the two.

It’s not clear how far these cases will go if the constitutional underpinning is removed. But the state’s legal setbacks so far against the UW Oshkosh Foundation are directly tied to the weakness of the constitutional argument. Niess is also the judge in the civil case against the former university officials.

“You have a federal and a state judge now saying this is not unconstitutional,” said Raymond M. Dall’Osto, a Milwaukee attorney who represents Wells. “A project for the public good does not create an unconstitutional debt.”

The foundation’s argument all along has been that it was operating on behalf of UW Oshkosh and at its direction. The nonprofit provided support for a range of real estate projects, including a hotel, a sports complex, a couple of biodigesters and a campus conference center.

When some of these created a cash drain, the foundation asked the university to make good on written promises to cover the shortfall. But the UW System said that it could not provide funds to a private organization, a position that was almost immediately criticized as legally suspect.

Niess’ ruling “reiterates at the very least that the law is not as clear as the state in the civil case makes it out to be,” Dall’Osto said. It also raises questions about the state’s criminal case.

The legal doctrine known as “void for vagueness” holds that a law cannot be used to prosecute someone if it isn’t clear what the law requires a person to do. In this case the question becomes “how you conform your conduct to something that is unconstitutionally vague,” Dall’Osto said.

“The banks allege with sufficient factual particularity … that the primary if not sole purpose of the contracts at issue is the public good, specifically to benefit UW Oshkosh,” Niess said. “Thus … the constitution is not violated.”

While this language lends support to the foundation’s position, Niess was critical of parts of the bankruptcy decision, which said the UW System had to stand behind UW Oshkosh’s financial promises.

In fact state lawyers seized on some of Niess’ comments to help win an order blocking the foundation from collecting from the UW System. At one point during a late October hearing Niess said he was “a little perplexed by Judge Kelley’s ruling.” At another point he said he “can’t understand her reasoning.”

Chief Judge William C. Griesbach of the U.S. district court in Milwaukee agreed to put a hold on Kelley’s decisions so that he could consider arguments from the foundation and the UW System.

An earlier version of this post incorrectly identified which bank had financed which project.

Saturday, November 10, 2018

Oshkosh City Hall renovation may include first-floor addition, $10 million to $20 million pricetag

City Hall's origin as a high school means there is an inefficient use of space, consultants say.
By Miles Maguire

A possible $10 million to $20 million renovation of City Hall as well as a proposal to build a new Parks & Forestry Building for $6.4 million will come before the Common Council early next year.

The City Hall renovation would entail putting the council’s meeting space on the ground floor in a one-story addition, said City Manager Mark Rohloff.

The main municipal office building, which looks out over Algoma Boulevard, opened in 1916 as Oshkosh High School. The high cost of renovation is related to its original design and to the fact that the structure has been grandfathered under the American with Disabilities Act and does not meet current building requirements.

“This building is inefficiently used,” Rohloff said. Because it was built to accommodate large numbers of students moving periodically from class to class, it has very wide hallways and stairwells, which go unused for much of the workday.

The problem is that converting those underused areas into office space would trigger a need to modernize the rest of the structure so that it meets ADA and building code requirements.

Last year Boldt Co., the Appleton construction firm, completed an evaluation that found City Hall to be “structurally sound … and well maintained.” But Boldt also noted some issues, including the ADA problem.

“If a significant alteration is made to the facility, federal regulations would require areas of noncompliance to be brought up to current day standards, unless structurally or technically unfeasible,” Boldt said.

The other major knock against the building is that its shell, including windows and walls, are not up to current energy standards.  

The city has other options, like moving some staff to the Public Safety Building. But retrofitting any vacated space in City Hall would also trigger the ADA and code requirements, thereby limiting any cost savings, Rohloff said.

This year the city commissioned a space needs assessment to determine whether City Hall is adequate now and into the future.  “Our building needs are not so drastic if we redo it,” Rohloff said.

“We’re not projecting a great deal of growth in our office needs,” the city manager said. “The biggest need that was pointed out was meeting space.”

When the council was told last month that the space needs assessment was essentially complete, the members decided it was too big an issue to take on right away.

“The magnitude of the City Hall project is going to be so sizable, and the cost has such a high price tag” that the council should wait until next year to review the alternatives, said Mayor Steve Cummings during a meeting last month.

Deputy Mayor Lori Palmeri said she has not seen the City Hall report but had heard about the idea of adding 7,500 square feet of office space by making better use of the stairwells.

At some point the cost of renovation could become so great that erecting a new building would make sense, but Palmeri said she hasn’t “heard specific numbers” as yet.

Major changes to City Hall “are not going to happen anytime soon,” she said. One of the first steps would be to add the project to the city’s Capital Improvement Program, a rolling five-year plan that covers construction projects on public property.

The council will also be asked to consider putting a new parks building into the plan.

Some money, about $250,000, has been earmarked for buying adjacent land to allow for expansion of the parks headquarters. The building, at 805 Witzel Ave., was rated by Boldt as being in “fair” condition with exterior doors that are deteriorating at the bottom and a heating/cooling system that needs to be replaced.

Boldt analyzed but rejected the idea of incorporating parks staff and equipment into the nearby Public Works Department central garage. The consultants said the garage has some unused space but not enough.

Another option is to tear the existing building down to its frame and then rebuild it and put on an addition. This would cost about $1 million less than building new but would not provide the same degree of efficiency and functionality, the consultants said.

The more expensive, build-new option would be more energy-efficient and more attractive, the consultants said. This alternative would also accommodate larger vehicles that the city is planning to buy, they said.

Tuesday, November 6, 2018

Oshkosh reports sharp decline in drug overdose deaths due to stepped up narcotics enforcement

Oshkosh Media
Oshkosh Police Chief Dean M. Smith presents his department's 2019 budget proposal to the Common Council.
By Miles Maguire

The Oshkosh Police Department’s stepped up vice and narcotics enforcement has led to a 57 percent decline in overdose deaths and the recovery of six victims of human trafficking so far this year.

Police Chief Dean M. Smith provided these and other enforcement statistics to the Oshkosh Common Council Oct. 30 as it examined a proposed $565,000 increase in the department’s operating budget.

The department’s Vice and Narcotics Unit has been “hugely successful in combating narcotics trafficking as well as human trafficking here in Oshkosh,” Smith said. He cited these year-to-date statistics about the work of the unit:

  • 104 drug investigations.
  • 122 drug arrests from those investigations.
  • 4,574 grams of marijuana seized.
  • 338 grams of crack cocaine seized.
  • Nearly 82 grams of heroin seized.
  • 439 grams of methamphetamine seized. 
  • 5.8 grams of fentanyl seized.
  • Almost 400 grams of marijuana wax seized.
  • 52 prostitution investigations.
  • Six victims of human trafficking recovered.
The vice-narcotics unit, which consists of three officers and one sergeant, was started in early 2017. Smith credited their efforts with a steep decline in overdose deaths.

“From September 2017 compared to September 2018 our overdose deaths are down 57 percent,” Smith said. “That's an incredible number.” He said overdoses overall are down almost 29 percent.

Friday, November 2, 2018

Oshkosh's tax base taking big hit from 'dark store' lawsuits, other state policies, Rohloff says

Mark Rohloff gives a budget update in a special edition of the "City Manager's Report."  
By Miles Maguire

The city’s property tax base has taken a $140 million hit because of actions and inactions by state government, City Manager Mark Rohloff said in a video produced in advance of next week’s annual budget hearing.

After closing a special development district and putting the real estate there back on the tax rolls, the city should have registered a gain of $145 million in property value, Rohloff said. Instead the increase was only $5 million.

He blamed changes at the state level, including the rollback of the personal property tax and cuts to industrial land valuations, both of which are determined by Madison.

A major factor in the decline in tax base, he said, is the ongoing litigation over the value of large retail stores. These cases, popularly known as the “dark store” issue, have resulted in the city having to cut the assessed value of outlets operated by national chains.

“‘Dark store’ .. is coming to roost here in Oshkosh right now,” Rohloff said. An effort to address the issue has attracted bipartisan support in the legislature but has run into strong opposition from business lobbyists, who have so far prevented action.

The city’s tax rate is currently projected to dip slightly next year, to about $10.50, but should be going down much more, Rohloff said.

The final rate will depend on the outcome of decisions by the Common Council later this month.

The city’s overall budget is projected to rise 2.5 percent to $75.2 million.

The council will hold a special meeting Wednesday at 5 p.m. The agenda includes :

  • The public hearing on the 2019 operating budget.
  • Discussion of the 2019 Capital Improvement Program.
  • The possibility of using a vehicle registration fee to replace street special assessments for residential properties.
Watch the video here.