A Milwaukee County Circuit Court judge Tuesday appointed an interim receiver for the suspended Staybridge Suites and Residences on Water development in downtown Milwaukee.
Judge Mel Flanagan appointed Seth Dizard of Milwaukee-based O’Neil, Cannon, Hollman DeJong S.C. as the interim receiver for the development. Another court hearing will be held on July 8, during which Dizard could be named the permanent receiver for the project.
Dizard said his first step with the project will be to address any immediate issues with the partially constructed building.
"Nobody’s been in there in a long time," he said.
Dizard said said he will work to resume the project and his long-term goal will be to sell the building.
Construction on the 14-story building, located at the southeast corner of Water Street and Juneau Avenue, was halted months ago. The building was to have had a 117-room Staybridge Suites extended stay hotel, 34 residences and first floor retail space. So far the only tenant occupying the building is a Qdoba Mexican Grill restaurant.
Reykjavik, Iceland-based SJ Properties Suites BuyCo EHF, an investor in the project asked the court to appoint the receiver. SJ Properties filed a lawsuit in U.S. District Court alleging that the other partners in the development, Fort Myers, Fla.-based Development Opportunity Corp. (DOC) and Park Ridge, Ill.-based Economou Partners LLC misappropriated funds for the Milwaukee project and used those funds for other projects.
In addition, 14 subcontractors have filed a total of $3.45 million in construction liens against the project for work that they say they did on the building and were not paid for.
SJ Properties Suites BuyCo and its advisor, Reykjavik, Iceland-based Askar Capital EHF, provided $17.4 million for the project, according to its court document filing.
Appointing a receiver could finally revive the Milwaukee development.
According to its court filing, "Askar and (SJ Properties Suites) BuyCo may be willing to advance some additional funds for completion (of the project), and have found a potential partner for completion. Askar and BuyCo are willing to provide financing for this receivership and stabilize it to maximize its value…Askar and BuyCo are unwilling to complete construction, borrow additional funds, or find a suitable partner for completion until the Milwaukee project has been stabilized."
