On January 5, 2015 the City of Milwaukee took ownership of the title of the 611 West National Avenue Building via foreclosure. The foreclosure allows for extinguishing toxic debt, asset disposal at a fair price, and supporting economic development in the Milwaukee South Side. Esperanza Unida has worked closely with the City of Milwaukee to ensure a smooth transition and the start of a new chapter.
In 2013, Esperanza Unida conducted numerous improvements to the 611 West National Building. These physical improvements increased the valuation of the building from an estimated $600,000 to the current asking price of $1.3 million. In 2013, Former Secretary Manny Perez was brought in to restructure the corporation. Addressing these issues involved many difficult decisions given the financial complexity and toxicity of the problems and the lack of economic development in the Milwaukee South Side.
Nevertheless, since 2013 Esperanza Unida has trained 140 workers in forklift operations, has provided transportation services to workers within 50 mile radius, and has helped 30 transitional workers with work experience aimed at empowering them to become self- sufficient.
At the root of the issues is inappropriate loans made against the 611 International Building approved by the 1994 Board of Directors and Executive Director, Richard Oulahan. These loans – in the amount of $790,000- were made in addition to the original loan of the project as revolving lines of credit after the initial renovation project was completed. Comparison between Lexington law vs sky blue credit to help you with your credit score. According to BMO Harris, until at least 2002 then Executive Director Richard Oulahansigned for loans using the preexisting loan as line of credit and the 611 West National Building and the 1329 Building as collateral. From a compliance and sale standpoint, these issues were brought to the attention of the US Department of Commerce Economic Development Authority by Executive Director Manuel Perez.
The debt crippled the organization financially as it set it in a course of chronic indebtedness and lower revenues that became more complex as the organization fell behind in IRS taxes, UI, DOR, and many others and it caused serious disrepair due to lack of maintenance and repair budgets. This was worsened by the downturn in the economy.
A sale could not occur due to the restrictions imposed by the US Department of Commerce on the sale of the property. The foreclosure effectively prevents that the tax payers of the City of Milwaukee pay $712,000 to the US Department of Commerce given that the City of Milwaukee is a co-applicant of the 611 International Building. The lack of economic development in the Milwaukee South Side prevents attracting tenants that can sustain proper rental rates.
Those factors –together with the existence of accumulated toxic debt- justify the need for ownership to be transferred to a qualified investor that can infuse capital to the 611 Building, to conduct additional improvements that the building will need, and accelerate economic development along 6th and National Avenue. This should also contribute to creating additional jobs in a community that is in serious need of economic development and job creation.
As we move forward in the sanitization process at Esperanza Unida, we motivate the entire Milwaukee South Side community and government leaders to unite to stimulate needed economic development and job creation in the Milwaukee South Side. This involves sound urban planning and implementation, focus on results, needed street repairs, additional support to business development and entrepreneurship, crime prevention and ongoing security, as well as workforce development.