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Radisson Owner Restrained From Stepping Onto Hotel Property

A temporary restraining order prevents owner, Jim Heyden, from stepping foot on the hotel premises. Village Manager Mark Fitzgerald said a statement from the village may be coming in several days.

The woes of the ownership group behind the Radisson Hotel continue to deepen in Menomonee Falls.

On Tuesday, attorney Randall Crocker, who’s representing the village in its ongoing receivership involving the Radisson Hotel, filed a temporary restraining order of hotel owner Jim Heyden, which prohibits him from stepping onto the hotel property.

Waukesha County Circuit Court Judge Donald Hassin signed the restraining order Tuesday.

According to Tom Daykin of JSOnline, the restraining order also temporarily prevents Heyden from using or selling any assets pledged as collateral to pay back the $17.65 million village-issued loan given to the original ownership group to develop the hotel.

According to court documents, a second issue centers on drained checking accounts and payments not being made. The ownership group, Lodging Investors of Menomonee Falls, has failed to make its first two semiannual $700,000 payments owed on the village loan.

Court documents indicate that the Department of Workforce Development currently also filed a delinquent unemployment tax warrant for Heyden with the Waukesha County Circuit Court earlier this year. Court documents indicate Heyden currently owes $17,796.

Village leaders met in closed session Monday to discuss the pending receivership litigation. Village Manager Mark Fitzgerald couldn’t comment on what occurred in closed session. However, news regarding the Radisson Hotel should be forthcoming in several days.

“Soon but not in the next seven days,” Fitzgerald said. “The reality is that we won’t have a statement for a while. At some point we will have a statement and issue an official press release.”

What that will statement will contain is unknown at this point.

Additionally, for the third Village Board meeting in a row, Radisson Hotel contractors on Monday who are owed money for work completed on the hotel over a year demanded answers from the village as when they will get paid. The group of about four contractors could only speak during the public comment section of the meetings.

A Troubled Past

In April 2010, the village that featured a $17.65 million loan to kickstart the hotel construction. The ownership group included Heyden, Gilbert, Dean Grosskopf, Paul Nooyen and William Krueger.

However, things quickly went south after the village approved the loan. In October 2010, Gilbert, who was a 10 percent owner of the hotel, filed for Chapter 7 bankruptcy. According to documents from the U.S. Western District Court, Gilbert’s assets were worth some $3.3 million but had outstanding liabilities of $106.4 million.

That was just months after Gilbert provided necessary documentation to ensure he had necessary net worth to account for his portion of the hotel’s worth.

Then, Grosskopf’s hotel management firm, Professional Hospitality, became in Dane County Circuit Court. According to the suit, Madison investor, Gregg Raup, is accusing Professional Hospitality of wrongfully diverting $1.2 million from hotels in Beloit and Green Bay to the Radisson Hotel in Menomonee Falls.

That spurred the village to take preemtive action and appoint a receiver to monitor day-to-day operations at the hotel and its revenues in November. At the time, Fitzgerald said officials were concerned but optimistic.

"The Village Board of Trustees is certainly concerned about recent events involving the Menomonee Falls Radisson Hotel and the outside litigation that is pending against current owners," Fitzgerald said in a statement at the time. "However, the Village Board of Trustees believes that the appointment of a receiver is a prudent measure to take to assure the community and its citizens that the hotel’s operations will be legally protected during this period of outside litigation."

As part of the developer agreement crafted by the village, the hotel’s ownership group was required to make scheduled payments on the principal of the loan. However, the group failed to make its first $700,000 payment when it came due in November. A total of $4.1 million in principal is due to be paid by the partners over the next four years. According to the development agreement, the loan will be paid in full by the time the calendar turns to 2026.

W . Benz June 09, 2012 at 01:07 PM
Davis was all in when he was Prez at 1 million , Other's so called connected people were saying things like " If not this then what " and --" this will be the anchor for main street" Now after all this the Rats are running to the holes saying things like " It wasn't my responsibility to do due diligence" " I like the Bar " So who's running for election ??? Otis and the good old boy RINO's again, Let's do all we can do to support the Hotel !!! please consider writing a check and send it to Fitz the Village Mangt . . make it ot to " FRIENDS OF THE HOTEL". Just 5 bucks and you could save this historic Bld..... Geo Washinton slept here
knowsmorethanyou June 09, 2012 at 07:14 PM
Are any of the bloggers on here market research specialists for the hospitality industry. I've been following this story from the start. It's clear that none of you are. I agree that in the 70s & 80s and part of.the 90s a hotel in that location would only draw highway transient guests along with a few local people. The demand for high quality accomodations in and around the falls area is on the rise. The current market forcast suggests an occupancy on pace with the competitive set but with a higher average rate to reflect a new and upgraded product. This mess with the Village and now a shady owner is almost unbelievable. I have no idea how that will play out. All I do know is that this talk about the hotel failing because there won't be any guests is complete nonsense. There is business to be had in that area and now that it seems the bad apple has been removed hopefully the profits will return. But thats just my opinion.
W . Benz June 10, 2012 at 02:36 AM
Mr Know it all : Thanks for your input other then that I think your full of it . Call Daykin from JS there has been over building of hotels in Metro Milw and many have and are in trouble like the airport Wyndham . Village Mang. Fitz refuses to release occupancy numbers, if they were outstanding Fitz would be on every media outlet. Mr K.I.A . show us your data . Another Spin Doctor !!
paul June 10, 2012 at 02:45 AM
Gaylord.. get a clue. Day to day occupancy and rate figures are confidential. Specific numbers are not made public as it would tip off the competition. But I would be curious to see what their summer forecast looks like. Place looks packed tonight.
red June 10, 2012 at 02:51 AM
Can we agree that government is pretty awful at making these kinds of business decisions? If private money didn't think this was a viable hotel property, why would government know better? I hope we can get leadership to get us out of this mess. Right now I'm asking how much my taxes go up to pay for this.
W . Benz June 10, 2012 at 03:27 AM
Paul : All the clues are written in the Lawsuits and the Village stiffing the contractors who did the work and have NOT been paid . Gee Paul you were in business how would you feel if you didn't get PAID ! This was PUBLIC money and we have a right to know how much business this white elephant is producing ... Paul drive by @ nite and see how many cars are in the lot after R.B.G. is closed . Do a traffic count or call Jim H. hell' tell you about occupancy , just as long he doesn't go on the property. .........Summer forcast ? BANKRUPTCY / creditor in control.......Big Atty fees Tax warrants . No loan payments. No RM tax $$$.
falls123 June 10, 2012 at 05:28 AM
Red, cant agree with you more. Paul, you make a good point about why occupancy numbers arent released. Gaylord, your rantings make it clear you have an ax to grind with the village and the hotel... I can respect that, but seems you may have some other motive behind your posts.. knowsmorethanyoudo.... I hope youre right. Youre position is the only one where the taxpayer wins.
W . Benz June 10, 2012 at 12:34 PM
Some more RINO talk from the hand wringers . Oh everything will be ok and just give them a chance more Obama logic. Ya I have a ax to grind when village morons spend 18 million and still counting on a Hotel using taxpayer monies. Just ask yourself were is the 18 million in TAXPAYER money ?? because the contractors haven't been paid. ........... Jerry Maguire time !!!
Jefferson E. Davis June 10, 2012 at 10:41 PM
Gaylord- Actually, when I served as Village President, we (Village Board) approved a fact finding study for approximately $300,000 to see if Main Street was worth saving or to just simply let it continue to fall into disrepair. The consensus was to try and revitalize Main Street including an upscale lodging destination without taxpayer funds. The report is available at Village Hall if you have the time and would care to see it as many already have. The project I supported, which was voted down twice 6-1 by many of the same members who are currently on the Village Board (Steliga, Farrell, Ellis, McDonald and Jeskewitz), was something similar to an Industrial Revenue Bond (IRB) concept where the businessman would get private financing at a favorable interest rate with the Village's "support" to secure the loan, but very little if any risk. I was told in Closed Session by the McDonald's, Jeskewitz's and Steliga's that, "... the Village might as well buy the hotel, fix it up and deed it over to the owners." That's exactly what happened. Unfortunately, people, personalities and politics interferred with "doing the right thing" for Menomonee Falls and now the taxpayers are on the hook for $18,000,000+. Is it any surprise that 8 employees lost their jobs to save $700,000 a year which is almost exactly what the interest payments are for the hotel?
Jefferson E. Davis June 10, 2012 at 11:41 PM
Paul: Actually, because the Gang of 5 Hotel Owners accepted a taxpayer funded loan, the occupancy rate figures are a matter of public record and fall under Chapter 19 of the Wisconsin State Statutes. Gaylord is correct. Only the Village Manager, on the advice of the Village Attorney, has decided to hide behind the obscure "secrecy for the competition" excuse for not releasing what the public's right to know is for their $18,000,000+ investment and has tried to block any release of those reports that he recently said showed the hotel doing "quite well". The DA has yet to rule on the Village Manager's blocking the release of these reports when a complaint was filed nearly 6 months ago with his office. I think everyone knows what the occupancy rate is for the hotel, dismal. Otherwise they wouldn't be in default on the loan, in a court appointed receivership status and ordered off the property by a restraining order and facing an embezzlement jury trial in Dane County for $1,200,000. The summer isn't looking any better!
W . Benz June 11, 2012 at 04:58 PM
Davis IRB you supported was for 1 million and because it came from you the other trustees voted no . I would not have given the Hotel nothing ,Zipo of taxpayer $$$$ . Were is the new Taxpayer group from last election or was it just about getting Elected ? RINOville
Jann June 11, 2012 at 08:36 PM
Check out Tom Daykins update on JSonline. Its going into foreclosure. Gonna be owned by the taxpayers. Just great.
Jefferson E. Davis June 11, 2012 at 08:57 PM
Gaylord: The Steliga's, Greco's, Jeskewitz's, McDonald's, Ellis's and Rechlicz's are giving you untruthful information. The Village Board was not going to give the hotel owners any money in 2003-04. The Village Board was simply going to act in a capacity that would have helped the hotel owners secure private financing. If you're going to put information out there please at least have the correct information. You are invited to stop by Village Hall and look at the Closed Session Minutes from 2003-04 yourself. The truth is a very freeing thing! I will let the Tea Party/Taxpayer Groups speak for themselves. At least they got a conservative elected to the School Board. That hasn't happened since Don McNamara and look what the establishment tried to do to him.
Jefferson E. Davis June 11, 2012 at 09:33 PM
Jann: Thanks, I guess, for the update. At least JS Online is starting to cover this stuff. Here's the story from JS Online... http://www.jsonline.com/blogs/business/158465995.html#!page=1&pageSize=10&sort=newestfirst. We are all hotel owners now. Imagine the Village accepting false information from the hotel owners on not actually paying the Radisson Hotel Franchise Fee when they had told the Village it had been paid. Gee, some of us tried begging the Village Manager, Village Attorney, Village Police Chief and Village Board long before 2010 not to give these guys any of the taxpayers' money. But they just laughed at us and no one appears to be laughing now. A nearly $18,000,000 loan that is due in May of 2014 when the 4-year note runs out. $18,000,000 gone! Interest payments of around $750,000 a year through 2014 to come from the taxpayers. Another $3,000,000 gone! $18,000,000 is the equivalent of one year's property tax levy to run the entire Village. The tax increment on the hotel went from $1,800,000 before the hotel was finished in 2010 to $2,300,000 when is was finished in 2011 or an increase in property taxes of about $10,000. Wow, what a return on $18,000,000! That comes out to about a $.00055 return on our money.
Jann June 11, 2012 at 10:02 PM
Jefferson: Thanks for posting the link. I'm breaking in a new electronic device and cutting and pasting has not been figured out yet!
GOTF8NGZUS June 16, 2012 at 09:26 PM
The only informative postings are from Jefferson Davis. Most of you are screaming and ranting with no substance. Jefferson Davis was the only hope MF had but because you thought he was quirky you wanted him out. Well, how quirky has he sounded these past years. Another thing I don't understand is how most of you against JD do not get your facts straight but instead follow the Piper Greco into this frenzy of miss information and now what do you have....EXACTLY WHAT JD HAS BEEN WARNING ALL OF YOU ABOUT!!! So now what??? Keep kicking the one that is on top of all this or ask him for help? Cheez, people get a clue. This is a big red flag on why they wanted JD out of there...hello!! You do what you want, I've moved out of MF and I count my blessing after reading whats going on with this. JD MF don't deserve you.
W . Benz June 16, 2012 at 09:49 PM
Davis had his time in the sun and turned it in the darkness. Many of us have been posting on these blogs sites for sometime and warned the taxpayer's. I would never vote for Davis for anything but he is free to post and do what he wants. This village will never Change until good people step up and stop these people who spend your monies on projects like this. RINO's in control.
Jann June 17, 2012 at 10:38 PM
I appreciate all the in depth information from Jefferson Davis. Sorry you feel the rest of us our just ranting, but the math is pretty simple. 18 million tax dollars down the toilet. We are allowed to rant.
W . Benz June 24, 2012 at 07:50 PM
Davis your wrong : 1st, Not part of the Village cabal ..Greco .Jesk , Otis. = Morons 2nd Correct Infor May 14 2003 J/S "Falls trustees reject hotel plan" by Mike Johnson Davis the correct infor was YOU were for 2.5 Million loan from the village not 1 Mill Anyone can look it up just Google the above . I wouldn't have given them Jack ! So Jefferson get your facts right !!! You voted for it just like the rest of them...... The RINO's got to go Folks ....
Jefferson E. Davis June 24, 2012 at 10:23 PM
Gaylord: Thanks for your comments. Here's the article you are referring to from May of 2003 and the hotel on Main Street... http://news.google.com/newspapers?nid=1683&dat=20030514&id=V8AaAAAAIBAJ&sjid=SEQEAAAAIBAJ&pg=6296,3227759. If you read the article, the program I supported was as I said for a private loan from a local bank for the hotel owner with the Village Board helping to guarantee the loan. This was not taxpayer money. This was not a taxpayer loan. This was not an interest free loan for the hotel owner. This private loan did not require a bond sale for the taxpayers. The hotel owner did not ask for a handout. The hotel owner did not ask for a TIF District. The hotel owner did not ask for any tax credits. The hotel owner did not ask for an exemption in property taxes. The Village Board was simply acting to help guarantee the loan for a private businessman with the overwhelming responsibility of risk on the hotel owner. The hotel at the time was valued at around $2,000,000. This project idea appeared to be a much better fit than what the taxpayers are stuck with now. Thanks for staying engaged Gaylord. It's too bad we don't have more citizens who have your interest, convictioin and passion.
W . Benz June 26, 2012 at 01:30 AM
Davis you said Guarantee in 2003 , so if the hotel failed the Village picks up the 2.5. Million and I believe the Hotel still would have failed . I would have supported the project if they would have had a H2 0 park and brought the blighted property next to the Ratisson . The Village went all in with taxpayer $$$$. Menomonee falls RINO's --- Cash for clunkers.
Jefferson E. Davis June 26, 2012 at 02:29 AM
Gaylord: I understand the hotel owner wanted the Village to help him secure a private loan from F&M Bank which would help him to guarantee the private loan. This was not a Village Taxpayer Loan. This was a private loan with F&M Bank at the time. If he defaulted, the Village could have possibly had a hotel on their hands if a buyer could not have been found. The plans at the time were to minimize, if not eliminate, any risk for the taxpayers. Main Street had been an eyesore for decades and still is. We weren't excatly having businesses knocking down the doors of Village Hall to locate on Main Street. The original plans for the hotel were to have a water park similiar to the ones that were built in Waukesha and I believe Sheboygan at or about that same time. The plans were to get the water park built before the other communities did. The original plans also called for the acquisition of the apartments next door and possibly the first 6-7 houses on Jefferson Street for the hotel, banquet hall, water park, restaurant and parking lot. Unfortunately, some of the Village Board Members were more interested in petty politics instead of doing the right thing for Main Street worrying who might get credit if things worked out for the better.
W . Benz June 27, 2012 at 01:05 PM
Village pays Hotel employee wages $ 60.500 and $177.00 other expenses. Yes taxpayers the bleeding continues and now E-mail shows from the start That HOTEL SOLYNDA was in trouble from the very start. Fitz did the Village trustees vote on paying Hotel wages .!!! So who runs this Village a unelected bureaucrat.
Pj June 27, 2012 at 10:38 PM
This is a very bad thing, what the hell! We should all stop paying our property taxes.
Pj June 27, 2012 at 10:46 PM
And the hotel is only worth 8.4million read the article in the business section of the journal, we look like a bunch of fools!
W . Benz June 28, 2012 at 02:19 PM
Property taxes paid by village ? $$ 22 K 1-31-12 next payment July @ $$ 22 k -- so was the hired Village Atty untruthful when he said the village doesn't anticipate more BAIL OUT $$$$$ So who's paying the Solylndra Hotel taxes in july. Any guesses ??? PJ they will be lucky to get 3 mill with all the liens and every Hotel thats been there has FAILED.
W . Benz June 28, 2012 at 10:19 PM
Davis: Google "Lisa Paraday woodland park co " and read what she has to say about Mark Fitzgerald Village Mangt. now we have him here !!! Not for long he should be fired . I think the cabal did the same thing to you !! Pay back a #$%&$.
W . Benz November 21, 2012 at 03:11 AM
Total Take over by bureaucrats with NO Hotel experience.
W . Benz December 06, 2012 at 02:03 PM
Just like I said more Bankruptcy- Grosskopf :: This should streach this out another year . Next up for Bankruptcy Heyden ?
W . Benz March 17, 2013 at 12:45 AM
Not you -- Thank God

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