Council overturns Sunset Homes TID amendment
Previous vote had paved way for $1.6 million condo association loan

By Matt Masterson - Freeman Staff

Sept. 17, 2015

 The Sunset Homes condominiums.
Charles Auer/Freeman Staff

WAUKESHA - A controversial amendment that would have allowed for a $1.6 million loan to the Sunset Homes condominiums association was voted down by the Waukesha Common Council, two weeks after that body approved the very same measure.

The council voted in favor of a measure to re-discuss the item Tuesday evening after some aldermen felt there were unanswered questions left over from its Sept. 1 meeting.

But after no aldermen discussed the item, the council voted 9-5 against the measure.

The amendment has drawn considerable attention since its approval, sparking Alderman Aaron Perry and some members of the public to ask Mayor Shawn Reilly to use his veto power on the measure.

But after the amendment was signed by Council President Andy Reiland - who was filling in for Reilly while he was on vacation - it could not be vetoed. The only way it could be revisited was if a council member who originally voted for the plan requested a motion to reconsider. Last week, Alderman Adam Jankowski did just that, asking Reilly to add the item to Tuesday night’s Common Council agenda.

“The reason I brought this forward tonight is because there are a lot of questions that still have yet to be answered,” Jankowski said, “and I know a lot of people want to have answers.”

He said he didn’t make the motion because he felt the council had made a mistake in its Sept. 1 vote, but he did so to allow aldermen to continue discussing an item the council and residents spent more than two hours talking about at the previous meeting.

Jankowski’s motion was approved by the council in an 11-3 vote. However, the 14 aldermen remained silent after the motion was approved, discussion was closed, permitting the council to vote again on the amendment.

Aldermen Daniel Manion and Kathleen Cummings initially voted in favor of the amendment Sept. 1, but changed their votes Tuesday night. Alderman Andy Reiland was unable to vote at the previous meeting while serving as acting mayor, but he too voted against the measure Tuesday.

A risky loan?

The amendment would have altered the project plan for Tax Incremental Financing District No. 22, permitting the city to make a loan to the condo association for repairing leaky roofs, deteriorated siding and worn-out parking surfaces.

The council’s Sept. 1 decision changed the TID district, but the loan between the city and Sunset Homes had not been drafted or finalized - a distinction Alderman Vance Skinner wanted to make clear before the council voted on the proposed amendment.

In 2009, the 120 Sunset Homes units were each assessed at over $100,000, but six years later they are now worth just over $50,000, according to a city report. If the amendment stands, the loan would be made to the Sunset Homes condo association and would be paid back through increased condo association fees over the next 15 years.

In a July 22 email to Community Development Director Jennifer Andrews, Running said he was “very skeptical” about the condo association’s ability to secure loans adequately and wanted to see their financials and tax returns for the last five to 10 years.

“Even if we get an assignment of dues, all that does is give us the right to sue the unit owners for their dues if the association defaults,” Running said in the email, “having the right to file 120 separate lawsuits (worst-case scenario) is not much security.”

Multiple members of the public spoke out against the amendment and the proposed loan - calling it “high-risk” and citing an independent study that reportedly found the condos need approximately $3.8 million in repairs - at the Sept. 1 meeting and continued to do so following its approval at that meeting.

Despite the perceived risk, Daniel Miske - an attorney with Whyte, Hirschboeck & Dudek S.C. who represents hundreds of condo and homeowners associations including that of Sunset Homes - said during public comment he was not aware of any loan to a condo association nationwide that has ever been defaulted on.

“It can’t happen,” he said. “ would require all 120 unit owners to file bankruptcy. It is not a risky loan."