City moving forward with acquisition of Esperanza Unida properties

Formal acquisition likely within the next week

Last updated on May 15th, 2019 at 04:56 pm

The City of Milwaukee will likely formally acquire Esperanza Unida’s West National Avenue properties within the next week after the organization’s bankruptcy proceeding was dismissed earlier this month.

The properties at 1313 and 1329-1331 W. National Ave. could be back on the market within a month or two after some initial inspections from the City Development and Neighborhood Services departments, according to Jeff Fleming, a Department of City Development spokesman.

“We’re looking forward to future uses of that site that complement the other good things that are going on in the area,” Fleming said.

The city had initially issued a request for proposals for the site in March in anticipation of a foreclosure action filed by the city treasurer’s office. Esperanza Unida owes about $75,000 in property taxes for the building.

The efforts to acquire and sell the building, however, were delayed when Esperanza Unida filed for Chapter 11 bankruptcy. Executive director Manny Perez, a former DCD secretary, had hoped to reposition the National Avenue properties and have them generating revenue to help pay down Esperanza Unida’s debts.

In addition to unpaid property taxes, the organization owed more than $400,000 to the IRS and nearly $150,000 to the state worker’s compensation fund. The buildings also had between $1.5 million and $2 million in liens transferred over from the group’s former building at 611 W. National Ave., which the city seized in 2014.

Perez said earlier this year he had found tenants for the facility, but the city’s foreclosure and RFP action made them nervous about moving forward.

United States Trustee Patrick Layng had sought to dismiss the bankruptcy cases, citing a failure to provide proof of insurance and a failure to provide financial documents for the group, including a balance sheet, statement of operations, cash-flow statement and federal income tax return.

Esperanza Unida twice sought extensions to file the required documents. The first request was granted, but Layng objected to the second request, arguing the new deadlines would not give creditors enough time to review them.

Esperanza Unida’s attorney and Layng’s attorney, Laura Steele, filed a stipulation with the court July 7 that there was cause to dismiss the case because the organization hadn’t filed the required documents by a July 5 deadline.

U.S. Bankruptcy Judge Beth Hanan dismissed the case the same day the stipulation was filed.

Perez did not return a message seeking comment on future plans for Esperanza Unida.

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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