UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN MILWAUKEE DIVISION
RICHARD OLSON 7510 W. Kangaroo Lake Road Baileys Harbor, WI 54202, RACINE INDOOR MOTOCROSS, LLC c/o Marquette Warehouse LLC 900 Water Street P.O. Box 5 Racine, WI 53403, MARQUETTE WAREHOUSE, LLC, 7510 West Kangaroo Lake Road Baileys Harbor, WI 54202, MARQUETTE DISTRIBUTION CENTER LLC 7510 West Kangaroo Lake Road Baileys Harbor, WI 54202, URBAN SUSTAINABLE ______________ 900 Water Street Racine, WI 53403,
AQUAPONICS,
RIVERSIDE BUSINESS CENTER, LLC 7510 W. Kangaroo Lake Road Baileys Harbor, WI 54202, SAM AZARIAN & SONS MARINA, INC. 1535 High Street Racine, WI 53404, AZAR, LLC 1535 High Street Racine, WI 53404, AZARIAN WRECKING, LLC 1535 High Street Racine, WI 53404,
LLC
File
No.
Plaintiffs,
vs.
CITY OF RACINE 730 Washington Avenue Racine, WI 53403 REDEVELOPMENT AUTHORITY OF THE CITY OF RACINE 730 Washington Avenue Racine, WI 53403, JAMES SPANGENBERG 3324 Foxwood Dr. Racine, WI 53405, MATTHEW SADOWSKI c/o City of Racine 730 Washington Avenue Racine, WI 53403, THOMAS J. FRIEDEL 1904 Dwight Street Racine, WI 53403, and JOHN DICKERT 151 Westminster Square Racine, WI 53402,
Defendants.
COMPLAINT
The Plaintiffs, RICHARD OLSON, MARQUETTE WAREHOUSE, LLC, MARQUETTE DISTRIBUTION CENTER, LLC, RACINE INDOOR MOTOCROSS, LLC, URBAN SUSTAINABLE AQUAPONICS, LLC, RIVERSIDE BUSINESS CENTER, LLC, SAM AZARIAN & SONS MARINA, INC., AZAR, LLC and AZARIAN WRECKING, LLC by and through their attorneys, Guttormsen & Terry, LLC, by Todd A. Terry, hereby allege as
follows:
JURISDICTION
1.
That the Plaintiffs assert claims for declaratory and/or damages relief against the Defendants based on (a) Defendants collaboration in the gross and continuing violation of Plaintiffs’ rights for just compensation and fair treatment under the Fifth and Fourteenth Amendments to the United States Constitution, Article 1 §§ 1 and 13 to the Wisconsin Constitution, The Federal Uniform Relocation Assistance and Real Property Acquisitions Policies Act of 1970, as amended, 42 U.S.C. § 4601 et seq., (the “Uniform Act”), regulations thereunder at 49 C.F.R. 24, et seq.; (b) procedural deficiency claims under Wis. Stat. § 32.06; (c) federal civil rights claims under 42 U.S.C. § 1983; and (d) conspiracy to interfere with civil rights claims under 42 U.S.C. § 1985(3).
2.
That this Court has jurisdiction of the federal constitutional and statutory questions
under 28 U.S.C. § 1331.
3. That this Court has supplemental jurisdiction for the state claims asserted herein under 28 U.S.C. § 1367. 4. That this Court has jurisdiction of judicial review of the Uniform Act as an appeal to a superior agency authority is not a prerequisite for judicial review under the Uniform Act, which renders the Administrative Procedures Act, 5 U.S.C. § 704, inoperative. 5. That venue for all causes of action stated herein lies in the Milwaukee Division of the Eastern District of Wisconsin as the acts alleged as a basis for federal claims took place within the boundaries of that District. PARTIES
6. That RICHARD OLSON (hereinafter “OLSON”) is an adult resident of the State of Wisconsin residing at 7510 W. Kangaroo Lake Road, Baileys Harbor, Wisconsin 54202.
7.
That RACINE INDOOR MOTOCROSS, LLC (hereinafter “RIM”) is a limited liability company duly organized and existing under the laws of the State of Wisconsin with its principal place of business, at all relevant to the action at, 900 Water Street, Racine, Wisconsin 53403, with Marquette Warehouse, LLC its registered agent.
8.
That MARQUETTE WAREHOUSE, LLC (hereinafter “MARQUETTE WAREHOUSE”) is a limited liability company duly organized and existing under the laws of the State of Wisconsin with its principal place of business at all relevant to the action at, 526 S. Marquette Street, Racine Wisconsin 53403 with OLSON as its sole member.
9.
That MARQUETTE DISTRIBUTION CENTER LLC (hereinafter “MARQUETTE DISTRIBUTION”) is a limited liability company duly organized and existing under the laws of the State of Wisconsin with its principal place of business at all relevant to the action at, 615 S. Marquette Street, Racine Wisconsin 53403 with OLSON as its sole member.
10.
That URBAN SUSTAINABLE AQUAPONICS, LLC (hereinafter “USA”) is a
limited liability company duly organized and existing under the laws of the State of Wisconsin with its principal place of business at all times relevant to this action at, 615 S. Marquette Street, Racine, Wisconsin 53403, with OLSON as the registered agent.
11.
That RIVERSIDE BUSINESS CENTER, LLC (hereinafter “RBC”) is a limited liability company duly organized and existing under the laws of the State of Wisconsin with its principal place business at all times relevant to this action, at 900 Water Street, Racine, Wisconsin 53403, with OLSON as the registered agent.
12.
That SAM AZARIAN & SONS MARINA, INC. (hereinafter “MARINA”) is a Wisconsin corporation duly organized and existing under the laws of the State of Wisconsin yet now a discontinued business with its principal office located 1535 High Street, Racine, Wisconsin 53404.
13. That AZAR, LLC (hereinafter “AZAR”) is a limited liability company duly organized and existing under the laws of the State of Wisconsin with its principal place of business located 1535 High Street, Racine, Wisconsin 53404. 14.
That AZARIAN WRECKING, LLC (hereinafter “AZARIAN WRECKING”) is a limited liability company duly organized and existing under the laws of the State of Wisconsin with its principal place of business located 1535 High Street, Racine, Wisconsin 53404.
15. That the Defendant, CITY OF RACINE, (hereinafter the “CITY”) is municipal corporation incorporated under Wisconsin Statutes as a City pursuant to Wisconsin Statutes §66. 16.
That the Defendant, REDEVELOPMENT AUTHORITY OF THE CITY OF RACINE (hereinafter “RDA”) is a subdivision of the CITY created and acting under and pursuant to Wis. Stats. § 66.1333(3).
17. That the RDA has the power to condemn, as defined within Wis. Stats. 66.1333(3)(f) and 32.02(11).
§§
18. That JAMES SPANGENBERG (hereinafter “SPANGENBERG”) is an adult resident of the State of Wisconsin, upon information and belief, residing at 3324 Foxwood Rd., Racine, Wisconsin 53405. 19.
That SPANGENBERG is named in his role as Chairman of the RDA at all times relevant to the conduct complained of herein.
20. That MATTHEW SADOWSKI (hereinafter “SADOWSKI”) is, upon information and belief, an adult resident of the State of Wisconsin residing at 724 Monroe Street, Racine, Wisconsin 53405. 21.
That SADOWSKI is named in his role as Acting and Interim Director of City Development for the CITY and as Assistant Executive Director of the RDA at all times relevant to the conduct complained of herein.
22. That THOMAS J. FRIEDEL (hereinafter “FRIEDEL”) is, upon information and belief, an adult resident of the State of Wisconsin, upon information and belief, residing at 1904 Dwight Street, Racine, Wisconsin 53403. 23.
That FRIEDEL is named in his previous role as City Administrator for the CITY, having held such position and acting under the authority of the CITY and in his individual capacity at all times relative to the conduct complained of herein.
24. That JOHN DICKERT (hereinafter “DICKERT”) is, upon information and belief, an adult resident of the State of Wisconsin, upon information and belief, residing at 151 Westminster Square, Racine, Wisconsin 53402. 25. That DICKERT is named in his previous role as Mayor for the CITY, having held such position and acting under the authority of the CITY and in his individual capacity at all times relative to the conduct complained of herein.
CORPORATE/REAL ESTATE OWNERSHIP STATUS
26. That OLSON was the owner of the real estate located at 900 Water Street, Racine, Wisconsin (hereinafter “900 WATER ST.”). 27.
That MARQUETTE DISTRIBUTION was, at all times relevant hereto, the owner of the real estate located at 615 S. Marquette Street, Racine, Wisconsin and 922 Sixth Street, Racine, Wisconsin (collectively hereinafter “615 MARQUETTE ST.”).
28. That MARQUETTE WAREHOUSE was the owner of the real estate located at 526 S. Marquette Street, Racine, Wisconsin (hereinafter “526 MARQUETTE ST.”). 29. That RIM, as a business tenant, operated an indoor motocross track at 526 MARQUETTE ST. 30. That USA, as a business tenant, operated an urban hydroponic fish farm for the growing and sale of farm raised tilapia and giant prawns at 615 MARQUETTE ST. 31.
That the following properties shall be considered and referenced herein further as the “OLSON PROPERTIES”:
- 900 Water St. - 615 Marquette St. - 526 Marquette St. 32. That MARINA owned the real property located at the following locations: - 308 – 4 Street, Racine, Wisconsin - 470 Water Street, Racine, Wisconsin - 712 Water Street, Racine, Wisconsin - 800 Water Street, Racine, Wisconsin - 1010 Water Street, Racine, Wisconsin (hereinafter collectively known as the th
“MARINA PROPERTIES”).
33. That MARINA operated a marina, boat storage and boat service business from the MARINA PROPERTIES.
34.
That AZAR owned the properties located at 512 Water Street, Racine, Wisconsin and 702 Water Street, Racine, Wisconsin (hereinafter collectively the “AZAR PROPERTIES”).
35.
That AZARIAN WRECKING was a business tenant at both the MARINA PROPERTIES and AZAR PROPERTIES. FACTS PERTAINING TO ALL COUNTS
36.
That beginning in and around 2008, the CITY and the RDA, formulated plans for the area encompassing the OLSON PROPERTIES, MARINA PROPERTIES and AZAR PROPERTIES, collectively the “Subject Area” with the 2008 rendition of such plans known as “Back to the Root Plan.”
37. That beginning in and around 2012 the CITY and the RDA enlisted the services of Vandewalle and Associates, Inc. to market and promote the redevelopment of the area encompassing the Subject Area under the plan known as “RootWorks Plan.”
38. That the RootWorks Plan was further organized by Vandewalle and Associates with an informational brochure printed by the Racine County Economic Development Corporation (hereinafter “RCEDC”), entitled the Root River Corridor Redevelopment Plan 2012, Racine, Wisconsin (hereinafter the “Root River Corridor Plan”).
39. That the RootWorks Plan was to benefit the City of Racine in redeveloping the area of the Root River from generally N. Memorial Drive, east to State Street, all within the City of Racine.
40.
That the RootWorks Plan combined local, State and Federal funding sources, including grants and a Tax Incremental Financing District (TID #18) within the City of Racine.
41.
That beginning in and around late 2013 and early 2014, the CITY and the RDA began promoting the area encompassing the Subject Area for redevelopment under the RootWorks Plan with this portion of it known as “Machinery Row” (hereinafter “Machinery Row”).
42.
That Machinery Row was proposed to be a $65,000,000.00 mixed-use redevelopment spread over a 20-acre parcel which was proposed to be the CITY’s largest redevelopment project ever.
43.
That, as defined by the Vandewalle brochure, the CITY identified the role Machinery Row played in the RootWorks Plan as, “the catalyst for RootWorks is Machinery Row.”
44. That the RootWorks Plan included plan renderings noting the various components encompassing and including Machinery Row. Further, attached hereto incorporated herein and made a part hereof as Exhibit “A” are true and correct copies of plan renderings. FEDERAL FUNDING 45.
That the RootWorks Plan, as adopted in 2012, was funded, in part, by a federal grant from the National Oceanic and Atmospheric Administration (“NOAA“) as grant #NA11N0S4190097 (hereinafter “NOAA GRANT“).
46. That in addition to the NOAA GRANT, the RootWorks Plan, received funding from the RCEDC, which is partially funded by a federal community block grant. 47. That the Environmental Protection Agency (hereinafter “EPA”) provided a grant in the sum of approximately $200,000.00 for clean-up of contaminated lands within the RootWorks Plan (hereinafter the “EPA Grant”).
48. That as part of the RootWorks Plan, the CITY received $15,921.00 from a Federal Trails Grant.
49. That the CITY and RDA received “Federal Financial Assistance” as defined in 42 U.S.C. §4601(4), for the RootWorks Plan. OPTIONS TO PURCHASE 50.
To accomplish Machinery Row, the CITY sought out private developers for the development of the same with the development including the acquisition of the OLSON PROPERTIES, MARINA PROPERTIES and AZAR PROPERTIES.
51.
That the CITY subsequently partnered with Financial District Properties of Davenport, Iowa (hereinafter “FDP”) for development of the Machinery Row Project.
52.
That beginning in and around February, 2014, representatives for the OLSON PROPERTIES, MARINA PROPERTIES and AZAR PROPERTIES met with representatives from FDP, about FDP’s potential acquisition of the OLSON PROPERTIES, MARINA PROPERTIES and AZAR PROPERTIES as part of the RootWorks Plan.
53.
That based on discussions and negotiations with FDP, representatives for the OLSON PROPERTIES, MARINA PROPERTIES and AZAR PROPERTIES entered into an option with FDP obtaining an option to purchase the MARINA PROPERTIES, AZAR PROPERTIES and OLSON PROPERTIES (collectively the “OPTIONS”).
54. That the Options were signed on or about and March 20, 2014. 55. That the Option price for FDP to purchase the MARINA PROPERTIES and AZAR
PROPERTIES was $1.1 million
56. That the Option price for FDP to acquire the OLSON PROPERTIES was $1.5 million for 900 WATER ST. and $3 million for 526 MARQUETTE ST. and 615 MARQUETTE ST. 57. That the Options were extended and amended numerous times by FDP. 58. That in and around May, 2014, OLSON, at the request of FDP, signed a request for a State Historic Tax Credits for the 900 WATER ST.
59.
That on or about June 9, 2014, the State of Wisconsin awarded a $9,000,000.00 historic tax credit for the 900 WATER ST. property.
60. That on June 10, 2014, DICKERT held a press conference announcing the Machinery Row Development as part of the City adopted RootWorks Plan. 61. That the DICKERT, at the June 10, 2014 Press Conference announced, “we built the Plan (RootWorks) and now we are working the Plan.”
62.
That the historic tax credit awarded required that FDP take ownership of 900 WATER ST. no later than December 31, 2014.
63. That the OLSON PROPERTIES were essential for the RootWorks Plan. 64. That the MARINA PROPERTIES and AZAR PROPERTIES were essential to the RootWorks Plan.
65. That OLSON required that FDP also purchase the properties located at 615 MARQUETTE ST. and 526 MARQUETTE ST. 66.
That FDP refused to acquire such properties as part of the 900 WATER ST.
acquisition.
67.
That the RDA subsequently offered to purchase 615 MARQUETTE ST. and 526 MARQUETTE ST. as part of Phase II of the Machinery Row/RootWorks Project.
68. That the RDA agreed to pay the sum of $800,000.00 for 526 MARQUETTE ST. 69. That the RDA agreed to pay the sum of $1 million for 615 MARQUETTE ST. FDP SALE CLOSINGS
70. That following the original Options, FDP negotiated reductions to the Option prices on all of the Subject Area Properties. 71. That after June 10, 2014, but prior to December 31, 2014, upon information and belief, FDP advised the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI that it did not plan to proceed with the Machinery Row Project. 72.
That, upon information and belief, the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI offered to provide a loan to FDP to acquire 900 WATER ST. and the MARINA PROPERTIES and AZAR PROPERTIES in the total sum of $4,500,000.00 (hereinafter the “LOAN”).
73.
That, upon information and belief, when the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI recommended, authorized and funded the LOAN they knew, or should have known, that FDP had no intent of moving forwarding with the Machinery Row Project.
74.
That, upon information and belief, the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI elected to provide the LOAN to FDP in order to induce FDP to act as a “Straw Man” for the CITY or RDA to acquire the Subject Area Properties.
75. That the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI additionally allowed FDP to fund an escrow account at the time of closing to pay the interest on
the LOAN, pay FDP its costs and fees and allow the CITY to pay for maintenance, upkeep and taxes (hereinafter the “ESCROW”).
76. That the ESCROW was further used to induce FDP to close on the transaction and allow the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI to locate and transfer the Machinery Row Project to a developer who was willing to move forward with the Project, or transfer ownership to the CITY or RDA.
77. That prior to closing on 900 WATER ST., the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI negotiated a Deed in Lieu of Foreclosure agreement with FDP, allowing the CITY to reclaim 900 WATER ST. and the MARINA PROPERTIES and AZAR PROPERTIES when and if FDP defaulted on the LOAN. 78. That at the time the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI obtained the Deed in Lieu of Foreclosure Agreement it knew that FDP was not going to develop the Machinery Row Project.
79.
That the LOAN was not secured by any personal guarantees, bonds or other security other than a pledge of the interest in the real estate.
80. That with the LOAN provided, when reducing it by the ESCROW, FDP was unable to meet the total contract amounts for the MARINA PROPERTIES, AZAR PROPERTIES, and 900 WATER ST. as had been negotiated (hereinafter the “Shortfall”) by and between FDP, OLSON and representatives for MARINA PROPERTIES and AZAR PROPERTIES. 81.
That given the Shortfall, FDP forced a negotiated reduction in the purchase price approximately 12 hours prior to closing with OLSON and representatives for MARINA PROPERTIES and AZAR PROPERTIES.
82. That the forced reduction, to fund the ESCROW, resulted in OLSON receiving $150,000 less than the sale price of 900 WATER ST. 83.
That the forced reduction, to fund the ESCROW, resulted in MARINA PROPERTIES and AZAR PROPERTIES receiving $110,000 less than the sale price of the properties.
84. That the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI knew, or should have known, that FDP, given the authorization to fund the ESCROW, utilized such shortfall in the LOAN to negotiate reductions in the purchase prices of 900 WATER ST. and MARINA PROPERTIES and AZAR PROPERTIES. RDA CLOSINGS – OLSON PROPERTIES 85. That in conjunction with the $4.5 million LOAN, and in furtherance of Machinery Row, the CITY and RDA also authorized the purchase of the 526 MARQUETTE ST. and 615 MARQUETTE ST. by the RDA. 86. That the RDA paid $800,000.00 for 526 MARQUETTE ST. 87. That the RDA paid $1 million for 615 MARQUETTE ST. 88. That OLSON originally negotiated a sale price, with FDP, for 526 MARQUETTE ST. in the sum of $1.5 million.
89.
That OLSON originally negotiated a sale price, with FDP, for 615 MARQUETTE ST. in the sum of $1.5 million.
90. That the RDA renegotiated the purchase price with OLSON reducing the sale price of 526 MARQUETTE ST. by $700,000.00 and for 615 MARQUETTE ST. by $500,000.00 91. That at the time the RDA negotiated with OLSON on the 526 MARQUETTE ST. and 615 MARQUETTE ST. buildings, the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI knew that the owners of the OLSON PROPERTIES were behind in real estate taxes.
92.
That at the time the RDA negotiated with OLSON on the 526 MARQUETTE ST. and 615 MARQUETTE ST. buildings, the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI knew that the owners of the OLSON PROPERTIES were in default under its existing Promissory Note and Mortgages with its lenders.
93.
That while the RDA was negotiating with OLSON on the 526 MARQUETTE ST. and 615 MARQUETTE ST. properties the CITY continued to repeatedly served OLSON with notices of fire code violations and building code violations to wit.:
A.
Requirement that OLSON extend the water lateral at his cost.
B. equirement that OLSON repair the sidewalk adjacent to the OLSON R PROPERTIES. C.
Requirement
that OLSON conduct snow plowing at the OLSON
PROPERTIES.
D.
Requirement that OLSON repair the sprinkler system at the OLSON
PROPERTIES.
E. epeated flood and drain sprinkler system testing at the OLSON R PROPERTIES. 94. The above referenced code inspections and compliance requirements were carried out by the City of Racine Fire Department and City of Racine Building Department, upon information and belief, at the direction of the CITY, RDA, FRIEDEL, and/or DICKERT. 95. That, upon information and belief, the code inspections and requirements were done to leverage negotiations with OLSON allowing the RDA to acquire the properties for reduced amounts, not representing Just Compensation.
96. That SPANGENBERG was the chairman of the RDA when the acquisition of 526 MARQUETTE ST. and 615 MARQUETTE ST. were authorized, with SPANGENBERG moving the action and voting for the same. 97.
That SADOWSKI was the Interim Executive Director of the RDA when the acquisition of 526 MARQUETTE ST. and 615 MARQUETTE ST. were authorized.
98. That, upon information and belief, SPANGENBERG and SADOWSKI were, or should have been aware that MARQUETTE WAREHOUSE was a business tenant at 526 MARQUETTE when the RDA acquired the same. 99.
That, upon information and belief, SPANGENBERG and SADOWSKI were, or should have been aware that RIM was a business tenant at 526 MARQUETTE when the RDA acquired the same.
100. That, upon information and belief, SPANGENBERG and SADOWSKI were, or should have been aware that MDC was a business tenant at 615 MARQUETTE when the RDA acquired the same. 101.
That, upon information and belief, SPANGENBERG and SADOWSKI were, or should have been aware that USA was a business tenant at 615 MARQUETTE when the RDA acquired the same.
102. That the RDA and CITY, via its agents, forced MARQUETTE WAREHOUSE to remove from the 526 MARQUETTE on or about May 15, 2015. 103.
That the RDA and CITY, via its agents, forced RIM to remove from the 526 MARQUETTE on or about May 15, 2015.
104. That the RDA closed on the acquisition of 615 MARQUETTE ST on December 30, 2015.
105.
That the RDA did not make the last payment due and owing to OLSON, for the sale of 615 MARQUETTE ST. until February 5, 2016.
106. That 900 WATER ST., 526 MARQUETTE ST., and 615 MARQUETTE ST. were all acquired as part of the same project as defined within Wis. Stats. §32.20. DOA COMPLAINT
107. That on May 2, 2017, a Tenant at 615 S. Marquette St. filed a complaint with the Wisconsin Department of Administration (“DOA”) alleging that he was entitled to business relocation benefits as a business tenant displaced for a public project. 108. That on June 9, 2017, the DOA determined that the Machinery Row project was a “public project” under Wisconsin Law in that it was “being carried out directly by a public entity, or an entity receiving public financial assistance, including a grant, loan, or contribution” under the Wisconsin Administrative Code. Further attached hereto and incorporated herein and made a part hereby reference as Exhibit “B” is a true and correct copy of the DOA determination. RELOCATION PLAN
109. That, pursuant to Wis. Stats. § 32.25 and Wis. Adm. Code ADM § 92.26, the RDA was required to submit a Relocation Plan prior to displacing any tenants. 110. That, at no time, has the RDA completed a Relocation Plan as mandated. 111. That despite notice that this was a public project and subject to relocation benefits on June 9, 2017, the CITY and/or RDA has yet to prepare and/or file a relocation plan. BENEFITS
KNOWLEDGE BY THE CITY AND RDA OF RELOCATION
112. That prior to the DOA complaint and determination, the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI were all aware that the Machinery Row Project was a Public Project, as defined under Wisconsin law, and the same triggered relocation benefits.
113.
That beginning in April 2014, the RDA and CITY directed SADOWSKI to prepare a Relocation Plan for properties located at 1251, 1281 and 1287 Mound Ave., Racine, Wisconsin (hereinafter the “Mound Ave. Properties”).
114. That the Mound Ave. Properties were being acquired by the CITY, with the CITY acting as the RDA’s agent. 115. That the Mound Ave. Properties were being acquired under the RootWorks Plan. 116. That SADOWSKI prepared a relocation plan for the Mound Ave. Properties (hereinafter the “Mound Ave. Relocation Plan”).
117.
That the RDA and SPANGENBERG approved the Mound Ave. Relocation Plan on May 19, 2014.
118. That the CITY approved the Mound Ave. Relocation Plan on May 20, 2014. 119. That SADOWSKI, as agent for the CITY and RDA, submitted the Mound Ave. Relocation Plan to the DOA on July 28, 2014.
120. That SADOWSKI was present and was advising the RDA on December 12, 2014 pertaining to the acquisition of the Subject Property at the RDA meeting where SPANGENBERG and the RDA voted to acquire the same.
121. That on December 12, 2014 the RDA, SPANGENBERG and SADOWSKI were aware that the Subject Property was included within the same public project, as the Mound Avenue Properties.
122. That, upon information and belief, in preparing for the action taken on December 12, 2014, the RDA, SPANGENBERG and SADOWSKI had discussions in closed session about the payment or non-payment of relocation benefits for the Subject Area Properties.
123.
That the RDA, SPANGENBERG and SADOWSKI either intentionally or negligently failed to file a relocation plan for the Subject Area Properties, Owners and Tenants.
124. That on January 27, 2016 a tenant at 1251 Mound Ave. Racine, Wisconsin, filed a claim for relocation benefits with the CITY and the same was processed and paid by March 2, 2016 (hereinafter the “Mound Avenue Claims”).
125. That the CITY and RDA recognized and processed relocation payments beginning in January 2016 yet have failed to process, pay or file a relocation plan for the Subject Property. PROCESSING OF CLAIMS 126.
That the RDA subsequently hired a relocation company, Terra Ventures, LLC to assist in any relocation claims.
127. That OLSON, MARQUETTE WAREHOUSE, MDC and USA filed six (6) claims with the RDA, via its agent, Terra Ventures LLC as follows: a.
September 25, 2017 Claim for $12,189.09, filed by MARQUETTE WAREHOUSE (hereinafter “Claim 1”) attached as Exhibit “C”.
b.
October 9, 2017 Claim for $280,000.00 filed by MARQUETTE WAREHOUSE (hereinafter “Claim 2”) attached as Exhibit “D”.
c.
October 9, 2017 Claim for $181,579.00 by MARQUETTE WAREHOUSE (hereinafter “Claim 3”) attached as Exhibit “E”.
d.
November 6, 2017 Claim for $121,200.00 by MDC (hereinafter “Claim 4”) attached as Exhibit “F”.
e.
September 25, 2017 Claim for $15,604.37 by MDC (hereinafter “Claim 5”) attached as Exhibit “G”.
f.
November 6, 2017 Claim for $491,740.00 by USA (hereinafter “Claim 6”) attached as Exhibit “H”.
128. That despite the determination by the DOA in June 2017, the RDA only first considered the above referenced claims on December 7, 2017. 129. That the RDA has denied all but portions of two claims submitted by OLSON via written determination on December 15, 2017. Further, attached hereto and incorporated herein made a part hereby reference as Exhibit “I” is a true and correct copy of such determination approving partial payments of two of OLSON’s six (6) claims.
130. That the RDA has not yet been paid any relocation benefits to OLSON. AZARIAN MARINA, AZAR AND AZARIAN WRECKING RELOCATIONS CLAIMS
131.
That the CITY nor the RDA have ever provided notice of relocation benefits to AZARIAN MARINA, AZAR, or AZARIAN WRECKING.
132. That AZARIAN MARINA is a displaced business pursuant to Wis. Stats. 32 and the Federal Uniform Relocation Act (hereinafter “URA”).
133. That AZAR is a displaced business pursuant to Wis. Stats. 32 and the Federal Uniform Relocation Act (hereinafter “Uniform Act”). 134. That AZARIAN WRECKING is a displaced tenant pursuant to Wis. Stats. 32 and the Federal Uniform Relocation Act (hereinafter “URA”). 135. That AZARIAN WRECKING occupied the MARINA PROPERTIES and AZAR PROPERTIES under an agreement by and between the parties.
136.
That AZARIAN WRECKING has been displaced from the MARINA PROPERTIES and AZAR PROPERTIES and been forced to relocate to 1535 High Street, Racine, Wisconsin (hereinafter “High Street Property”).
137. That AZARIAN WRECKING is forced to expend sums at the High Street Property in excess of its expenditures at the MARINA PROPERTIES and AZAR PROPERTIES. 138. That AZARIAN WRECKING is entitled to its actual moving costs together with the difference in rent/expenses from the amounts paid at the MARINA PROPERTIES and AZAR PROPERTIES in comparison to the High Street Property. 139. That FDP’s acquisition of the MARINA PROPERTIES and AZAR PROPERTIES was done as a “Straw Man” for the sole benefit of the CITY and RDA and as the CITY and RDA’s agent. COUNT I FAILURE TO FOLLOW REAL PROPERTY ACQUISITION POLICY UNDER FEDERAL LAW
140. Plaintiffs incorporate all prior paragraphs of this Complaint as if fully set forth under this count. 141.
Defendants received federal dollars in connection with its acquisition of the Property, including (a) a federal grant from the Environmental Protection Agency for brownfields clean-up; (b) a federal grant from the National Oceanic and Atmospheric Administration for partial funding for the City of Racine’s “RootWorks Plan”; (c) Community Development Block Grant funds, administered by the United States Department of Housing and Urban Development, for real property acquisition; and (d) federal Recreational Trails Program funds, administered by the United States Department of Transportation's Federal Highway Administration, for real property acquisition.
142.
Defendants were required to comply with the Uniform Act and the regulations thereunder in connection with the acquisition of the Property.
143.
Defendants have specific duties under the Uniform Act and the regulations thereunder, including following the “basic acquisition policies” set forth at 49 C.F.R. § 24.102 and paying certain expenses incidental to the transfer of title to it under 49 C.F.R. § 24.106.
144. The acquisition of the Plaintiffs’ property by Defendants did not qualify as a “voluntary transaction” within the meaning of 49 C.F.R. § 24.101(b). 145.
At a minimum, in failing to follow the basic acquisition policies and paying certain expenses incidental to the transfer of title to Defendants, Defendants failed to comply with the Uniform Act and the regulations thereunder.
146. Plaintiffs have suffered, and will continue to suffer, damages as a direct result of Defendants’ failure to comply with the Relocation Act and the regulations thereunder. 147.
That the Defendants failure to follow the Uniform Act resulted in the Plaintiffs
owners’ not receiving just compensation for the properties acquired.
148. That as and for a preliminary measure of just compensation, the Plaintiff owners’ should have been entitled to the contracted amount for the acquisition of their properties versus a reduced amount to fund the escrow. 149.
That as and for computation of just compensation the Plaintiff property owners should be entitled to appraisals of their properties as of the date of closing.
150. That the Defendants’ failure to comply with the Uniform Act has caused the Plaintiff property owners to suffer loss via less than just compensation for the CITY and/or RDA acquiring the Subject Properties. COUNT II FAILURE TO COMPLY WITH WIS. STATS. § 32 151.
Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under
this count.
152.
Defendants have the power to condemn real property pursuant to Wis. Stats. §§
32.02(1) and (11) and is a condemnor under Wis. Stats. § 32.185.
153. Defendants were required to comply with Wis. Stats. § 32.06 in connection with the acquisition of the Property.
154.
Defendants have specific duties under Wis. Stats. § 32.06, including obtaining a full narrative appraisal, issuing a jurisdictional offer, and notifying Plaintiffs of their rights in connection with the acquisition of the Property.
155.
At a minimum, in failing to obtain a full narrative appraisal, failing to issue a jurisdictional offer, and failure to notify Plaintiffs of their rights in connection with the acquisition of the Property, Defendants failed to comply with Wis. Stats. § 32.06.
156. Plaintiffs have suffered, and will continue to suffer, damages as a direct result of Defendants’ failure to comply with the Wis. Stats. § 32.06. 157. Plaintiffs have suffered, and will continue to suffer, damages as a direct results of Defendants’ failure to comply with Wis. Stats. §§ 32.19; 32.20. 158.
Plaintiff, OLSON, has not been fully compensated for his relocation claims pursuant to Wis. Stats. §32.
159.
Plaintiffs, MARINA, AZAR and AZARIAN WRECKING have not been fully compensated for any relocation costs pursuant to Wis. Stats. §32.
160.
Plaintiffs, MARINA, AZAR and AZARIAN WRECKING are compiling their relocation claims to be submitted to the CITY and RDA upon completion. COUNT III WRIT OF MANDAMUS
161.
Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under
this count.
162. That pursuant to Wis. Stat. § 32.25 the CITY and/or the RDA were required to provide Plaintiffs with a notice of relocation benefits being available and provide him with a relocation plan and/or compensation under relocation claims.
163. That despite notice from the DOA, the CITY and RDA have failed to provide the Plaintiff’s with any relocation plan. 164. That the RDA is duly bound by Wis. Stat. Ch. 32 and Wis. Adm. Code ADM Ch. 92 to file a relocation plan as defined thereunder. 165. That the RDA is duly bound by Wis. Stat. Ch. 32 and Wis. Adm. Code ADM Ch.
92 to process relocation claims.
166. That the duties required of the RDA by Wis. Stat. Ch. 32 and Wis. Adm. Code ADM Ch. 92 are ministerial acts mandated by Wisconsin law. 167. That the delay in processing and receiving relocation benefits has and continues to cause substantial economic loss to the Plaintiffs.
168. That Wis. Adm. Code ADM § 92.001 requires that displaced persons are “treated uniformly, fairly and equitably.”
169. That until such time as the RDA prepares and files a relocation plan and processes all of Plaintiff’s relocation claims and assists with relocation, the Plaintiffs are without any adequate remedy at law.
170.
That the Plaintiffs have not been treated in the manner mandated by Wisconsin
law COUNT IV VIOLATION OF THE FIFTH AMENDMENT TO THE UNITED STATES CONSTITUTION AND ARTICLE 1 § 13 TO THE WISCONSIN CONSTITUTION
171.
Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under
this count.
172.
Plaintiffs have a right of just compensation for property taken by Defendants under the Fifth Amendment of the United States Constitution and Article 1 § 13 to the Wisconsin Constitution.
173.
Defendants have not provided just compensation to Plaintiffs for the taking of
their property.
174. Plaintiffs have suffered, and will continue to suffer, damages as a direct result of Defendants’ failure to comply with the Fifth Amendment of the United States Constitution and Article 1 § 13 to the Wisconsin Constitution. COUNT V VIOLATION OF THE FOURTEENTH AMENDMENT TO THE UNITED STATES CONSTITUTION AND ARTICLE 1 § 1 TO THE WISCONSIN CONSTITUTION 175.
Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under
this count. 176. Pursuant to the Fourteenth Amendment to the United States Constitution and Article 1 § 1 to the Wisconsin Constitution, Plaintiffs were entitled to equal protection in the application to them of the Constitution and laws of the United States and the State of Wisconsin. 177. The Plaintiffs were denied relocation assistance and benefits while other similarlysituated persons whose land had been taken were given relocation assistance, benefits, and justly compensated. As a result, Plaintiffs have not been equally treated under law. As such, at a minimum, Plaintiffs form a class of companies owned all or in substantial part by OLSON, MARINA, AZAR and AZARIAN WRECKING were treated unequally under the Fourteenth Amendment. See, Village of Willowbrook v. Olech, 528 U.S. 562 (2000). 178. Despite providing Plaintiffs no relocation assistance, benefits, or just compensation, Defendants provided relocation assistance and just compensation to others.
179. Defendants’ conduct constitutes a violation of the equal protection clause of the Fourteenth Amendment to the United States Constitution and Article 1 § 1 to the Wisconsin Constitution.
180. Plaintiffs have suffered, and will continue to suffer, damages as a direct result of Defendants’ failure to comply with the Fourteenth Amendment of the United States Constitution and Article 1 § 1 to the Wisconsin Constitution. COUNT VI DEPRIVATION OF RIGHTS IN VIOLATION OF 42 U.S.C. § 1983
181.
Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under
this count.
182. Under the Uniform Act and the regulations promulgated thereunder, Defendants had a duty to ensure that persons and companies whose property is taken for public projects are treated fairly, equitably and consistent with their constitutional rights. Further, under the Uniform Act and the regulations promulgated thereunder, Defendants had a duty to ensure that displaced persons “will not suffer disproportionate injuries” as the result of public projects. 183. The Fifth Amendment to the United States Constitution, incorporated to the states through the Fourteenth Amendment, guarantees that no person shall be deprived of property without due process of law, nor shall such property be taken for public use without just compensation. 184.
Article 1 § 1 to the Wisconsin Constitution guarantees equal protection of the
laws.
185.
Pursuant to the Fourteenth Amendment to the United States Constitution and Article 1 § 1 to the Wisconsin Constitution, Plaintiffs were entitled to equal protection in the application to them of the constitution and laws of the United States and the State of Wisconsin. Because, as set forth in this Complaint, the Plaintiffs were denied benefits others received, Plaintiffs have not been equally treated.
186. Pursuant to the Fifth and Fourteenth Amendments to the United States Constitution and Article 1 § 13 to the Wisconsin Constitution, Plaintiffs were entitled to substantive and procedural due process and just compensation for the taking of Plaintiffs’ property. 187.
Defendants, acting under color of both state and federal law, have engaged in a series of actions that have deprived Plaintiffs of their rights to be treated fairly, equitably, and consistent with their rights secured by both state and federal law.
188. Plaintiffs have suffered, and will continue to suffer, damages as a direct result of Defendants’ failure to comply with 42 U.S.C. § 1983. COUNT VII CONSPIRACY TO INTERFERE WITH CIVIL RIGHTS IN VIOLATION OF 42 U.S.C. § 1985(3)
189.
Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under
this count.
190. Defendants acted in concert for the purpose of preventing or hindering the constituted authorities of Wisconsin from giving or securing Defendants the equal protection of the laws. Namely, Defendants discussed, planned, and intentionally disregarded Plaintiffs’ rights under the United States Constitution, Wisconsin Constitution, the Relocation Act, the regulations thereunder, and Wisconsin statutes. 191. Plaintiffs have suffered, and will continue to suffer, damages as a direct result of Defendants’ conspiracy to interfere with Plaintiffs’ civil rights contrary to 42 U.S.C. § 1985(3). DEMAND FOR JURY TRIAL Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiffs hereby request a trial by jury for the issues of fact in this action. PRAYER FOR RELIEF
WHEREFORE, Plaintiffs pray for relief as follows: A. For a Mandamus order directing the Defendants,
CITY and RDA, to produce a
relocation plan pursuant to Wisconsin Statutes.
B.
For just compensation for the taking of Plaintiffs’ property in an amount to be determined at trial;
C.
For any relocation or other benefits accrued or owed to Plaintiffs for the taking of Plaintiffs’ property in an amount to be determined at trial;
D. For all consequential damages suffered by Plaintiffs as the result of Defendants’ deprivation of their rights secured by the Constitution and laws of the United States in an amount to be determined at trial; E. For punitive damages in an amount to be determined at trial; F. For certain litigation expenses including attorney’s fees, costs, and disbursements incurred herein pursuant to 49 C.F.R. § 24.107, 42 U.S.C. 1988, Wis. Stat. § 32.28, and other applicable law; and
G. For such other relief as the court deems just and equitable under the circumstances. PUNITIVE DAMAGES DEMAND
Defendants are hereby put on notice that Plaintiffs are requesting punitive damages JURY DEMAND
The Plaintiffs hereby request that this action be tried to a Jury from said District. Dated this ________ day of December, 2017. GUTTORMSEN & TERRY, LLC, Attorneys for the Plaintiff
By:
Todd A. Terry, Attorney at Law
State Bar Number: 1047175
DRAFTED BY: Todd A. Terry, Attorney at Law SBN: 1047175 th 4015 80 Street, Suite H Kenosha, WI 53142 Telephone: (262) 842-2338 Facsimile: (262) 584-9949 Email:
​
todd@gt-attorneys.com
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