Land sale dispute holding up developments in Mukwonago, village says

Property owner being sued for failing to finalize sale to developer

Photo credit: Google
Photo credit: Google

Last updated on October 7th, 2019 at 02:00 pm

A developer planning a mixed-use senior community in the village of Mukwonago is suing the owners of the property where the development would be built after they failed to show up on the date of closing.

A village official said the lawsuit is just the latest in a series of issues from the property owner that are holding up the redevelopment of the area and could ultimately leave taxpayers footing the bill for an under-performing tax incremental financing district.

This week, Greg J. Petrauski Revocable Trust filed a lawsuit in Waukesha County Circuit Court against defendant Greenwald Family Limited Partnership. In the complaint, Petrauski alleges the defendant agreed in January to sell a 5.4-acre parcel of land and that a closing on the sale was scheduled to occur on Sept. 25.

However, neither the landowner nor a representative showed up to complete the transaction, as had been required by a signed agreement between the two parties.

The land that the Greenwald family agreed to sell is located just north of the Mukwonago YMCA along East Wolf Run. There, developer Greg Petrauski, principal and managing member of New Berlin-based Infinity Development LLC, plans to build a mixed-use, 108-unit senior community known as GreatLife — Mukwonago.

Mukwonago officials had already given necessary approvals for the project, which was a requirement before the land sale could take place, said John Weidl, village administrator and director of economic development.

Now the entire development is on hold since the transaction has not yet been finalized, said Weidl.

“That shovel should have already been in the ground,” he said.

Petrauski did not immediately respond to a request for comment. Property owner Darwin Greenwald declined to comment.

“I’m sorry, but I can’t be of any help to you today,” he said.

It turns out, the same Greenwald-owned property was at the center of another legal dispute.

Weidl said the village had originally set out to acquire through eminent domain a portion of the 5.4-acre site in order to construct a new road. The road would have been built over an existing sewer pipe, which also means no building could be constructed there due to an easement.

Greenwald challenged the action in court in June, and also informed village officials the move was holding up the pending sale to Petrauski.

For that reason, the village abandoned the idea of building a road through there. However, officials are exploring alternatives, since the road is still needed for a number of reasons, said Weidl.

It would have provided access to another planned development directly west of Petrauski’s. Called Maple Centre, the $55 million, 50-acre mixed-use development includes apartments, a hotel, restaurant and entertainment. Last year, the village signed a development agreement with Termony Builders to build the 33-acre apartment portion of the project.

Lastly, the planned road would eventually have been extended further south toward Maple Avenue. The goal would be to add a crucial second connection to Highway 83 for those frequenting the commercial developments along Wolf Run.

The undeveloped land is also part of a tax-financing district the village established in 2003 to help encourage growth along Wolf Run. Since areas within the 30-acre district’s boundaries remain undeveloped, the district is set to run a deficit of roughly $1 million when it closes in 2026, said Weidl.

He added that in discussion with the village, Greenwald had previously proposed that in exchange for allowing the road to be built through their property that the village make improvements to other sites the family owned.

Weidl said Greenwald requested that the village take control of a private drive he owns just behind the Pick ‘n Save store at the northeast corner of Veterans Way and Rochester Street and make improvements to it. The other request was to further extend Wolf Run to the east. Greenwald owns the site through which the road would be extended.

Weidl said the village would only agree to making those improvements if Greenwald signed a developer’s agreement that guaranteed either a new commercial development would eventually result from the infrastructure improvements. If that did not occur, then the village would be reimbursed for the work.

Greenwald would not agree to that request, Weidl said.

The failure to complete the land sale directly puts on hold the roughly $18 million-$20 million GreatLife development. It also indirectly holds up the Maple Centre, since village officials now have to draft alternative plans to provide infrastructure to the site, Weidl said.

Weidl said Mukwonago officials have learned to be more cautious when created tax-financing districts in the future as a result.

“The lesson for the village is we will never go forward with a TID (tax incremental district) again that results in a sole property owner controlling the developable property in that area,” he said.

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Alex Zank, former BizTimes Milwaukee reporter.

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