By Brian E. Clark
The head of the Brew City Redevelopment Group said he was “extremely pleased” with a state Supreme Court decision released this morning that will allow his company to seek damages from fellow developers once involved in Milwaukee’s Pabst Brewery site.
James Haertel, president of Brew City, said the three buildings involved in the dispute are the “crown jewels” of the site. He said he recently acquired the title to the buildings from the developers named in the suit.
The bulk of the blighted, 22-acre property is now owned by Joseph Zilber, who is not involved in the suit. He plans to turn the site, which has been vacant for the past decade, into a housing, retail and commercial center. On Monday, the Milwaukee Common Council approved his request for $29 million in city TIF funding to aid redevelopment of the property.
The lawsuit started in 2004, when Brew City and Haertel alleged that WisPark LLC and The Ferchill Group reneged on a promise to give him ownership of three buildings in the center of the site. They include a former school built in 1868 and another structure built a decade later. He said they are worth between $1 and $5 million.
In its decision, the high court said that Jerry Franke, president of the WisPark LLC, the development arm of Wisconsin Energy Corp., and co-developer The Ferchill Group, are not immune from liability.
It also said the said the state’s economic loss doctrine does not prevent Brew City from pursuing a malicious injury to business claim against WisPark, Ferchill and the company they formed – Juneau Avenue Partners, LLC.
The decision affirmed a February state Court of Appeals ruling made after Brew City’s claims against WisPark and Ferchill were initially dismissed by a circuit court judge in 2005.
Haertel, a Wauwatosa financial consultant, said, “We are thrilled. It seems we prevailed on all our points. This is a good and just decision.
“We are looking forward to a trial in Circuit Court in Milwaukee and our day in court,” he added.
Barry McNulty, a spokesman for Franke, declined comment on a possible settlement.
“We respect the court’s ruling and we will follow the legal process they have laid out,” he said. “Other than that, we do not comment on pending litigation.”
Haertel, a beer aficionado, arranged to buy the Pabst property in 2001 and formed a partnership with WisPark and Ferchill the next year. He said he was promised ownership of the three buildings in the center of the site on Juneau Avenue. WisPark and Ferchill then formed a separate partnership — called Juneau Avenue Partners — and purchased the site for about $10 million, excluding Haertel from the deal. When Zilber later bought the site, those three buildings were not included in the sale.
But Haertel said he recently received the title to the buildings from WisPark and Ferchill.
“We are now in meetings with Zilber and his people,” he said. “We are looking forward to working with them in the future.”
Even though he now owns the buildings, Haertel said he will continue to seek damages or compensation from his former partners.