UNITED STATES DISTRICT COURT EASTERN …...Case 2:17-cv-01802-NJ Filed 12/30/17 Page 1 of 30...

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF WISCONSIN

MILWAUKEE DIVISION

RICHARD OLSON

7510 W. Kangaroo Lake Road

Baileys Harbor, WI 54202,

RACINE INDOOR MOTOCROSS, LLC

c/o Marquette Warehouse LLC

900 Water Street

P.O. Box 5

Racine, WI 53403,

MARQUETTE WAREHOUSE, LLC,



MARQUETTE DISTRIBUTION CENTER LLC



URBAN SUSTAINABLE AQUAPONICS, LLC File No. ______________

900 Water Street

Racine, WI 53403,

RIVERSIDE BUSINESS CENTER, LLC



SAM AZARIAN & SONS MARINA, INC.

1535 High Street

Racine, WI 53404,

AZAR, LLC

1535 High Street

Racine, WI 53404,

AZARIAN WRECKING, LLC

1535 High Street

Racine, WI 53404,

and

Case 2:17-cv-01802-NJ Filed 12/30/17 Page 1 of 30 Document 2

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RAZA OF RACINE LLC

1535 High Street

Racine, WI 53404,

Plaintiffs,

vs.

CITY OF RACINE

730 Washington Avenue

Racine, WI 53403

REDEVELOPMENT AUTHORITY

OF THE CITY OF RACINE

730 Washington Avenue

Racine, WI 53403,

JAMES SPANGENBERG

3324 Foxwood Dr.

Racine, WI 53405,

MATTHEW SADOWSKI

724 Monroe Street

Racine, WI 53405,

THOMAS J. FRIEDEL

1904 Dwight Street

Racine, WI 53403,

and

JOHN DICKERT

151 Westminster Square

Racine, WI 53402,

Defendants.

FIRST AMENDED COMPLAINT


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The Plaintiffs, RICHARD OLSON, MARQUETTE WAREHOUSE, LLC, MARQUETTE

DISTRIBUTION CENTER, LLC, RACINE INDOOR MOTOCROSS, LLC, URBAN

SUSTAINABLE AQUAPONICS, LLC, RIVERSIDE BUSINESS CENTER, LLC, SAM

AZARIAN & SONS MARINA, INC., AZAR, LLC, AZARIAN WRECKING, LLC, and RAZA

OF RACINE LLC by and through their attorneys, Guttormsen & Terry, LLC, by Todd A. Terry,

hereby allege as follows:

JURISDICTION

1. That the Plaintiffs assert claims for declaratory and/or damages relief against the

Defendants based on (a) Defendants collaboration in the gross and continuing violation of

Plaintiffs’ rights for just compensation and fair treatment under the Fifth and Fourteenth

Amendments to the United States Constitution, Article 1 §§ 1 and 13 to the Wisconsin

Constitution, The Federal Uniform Relocation Assistance and Real Property Acquisitions Policies

Act of 1970, as amended, 42 U.S.C. § 4601 et seq., (the “Uniform Act”), regulations thereunder at

49 C.F.R. 24, et seq.; (b) procedural deficiency claims under Wis. Stats. § 32.06; (c) federal civil

rights claims under 42 U.S.C. § 1983; and (d) conspiracy to interfere with civil rights claims under

42 U.S.C. § 1985(3).

2. That this Court has jurisdiction of the federal constitutional and statutory questions

under 28 U.S.C. § 1331.

3. That this Court has supplemental jurisdiction for the state claims asserted herein

under 28 U.S.C. § 1367.

4. That this Court has jurisdiction of judicial review of the Uniform Act as an appeal

to a superior agency authority is not a prerequisite for judicial review under the Uniform Act,

which renders the Administrative Procedures Act, 5 U.S.C. § 704, inoperative.


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5. That venue for all causes of action stated herein lies in the Milwaukee Division of

the Eastern District of Wisconsin as the acts alleged as a basis for federal claims took place within

the boundaries of that District.

PARTIES

6. That RICHARD OLSON (hereinafter “OLSON”) is an adult resident of the State

of Wisconsin residing at 7510 W. Kangaroo Lake Road, Baileys Harbor, Wisconsin 54202.

7. That RACINE INDOOR MOTOCROSS, LLC (hereinafter “RIM”) is a limited

liability company duly organized and existing under the laws of the State of Wisconsin with its

principal place of business, at all times relevant to the action, at 900 Water Street, Racine,

Wisconsin 53403, with Marquette Warehouse, LLC its registered agent.

8. That MARQUETTE WAREHOUSE, LLC (hereinafter “MARQUETTE

WAREHOUSE”) is a limited liability company duly organized and existing under the laws of the

State of Wisconsin with its principal place of business, at all relevant to the action, at 526 S.

Marquette Street, Racine Wisconsin 53403 with OLSON as its sole member.

9. That MARQUETTE DISTRIBUTION CENTER LLC (hereinafter

“MARQUETTE DISTRIBUTION”) is a limited liability company duly organized and existing

under the laws of the State of Wisconsin with its principal place of business, at all relevant to the

action, at 615 S. Marquette Street, Racine Wisconsin 53403 with OLSON as its sole member.

10. That URBAN SUSTAINABLE AQUAPONICS, LLC (hereinafter “USA”) is a

limited liability company duly organized and existing under the laws of the State of Wisconsin


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with its principal place of business, at all times relevant to this action, at 615 S. Marquette Street,

Racine, Wisconsin 53403, with OLSON as the registered agent.

11. That RIVERSIDE BUSINESS CENTER, LLC (hereinafter “RBC”) is a limited

liability company duly organized and existing under the laws of the State of Wisconsin with its

principal place business at all times relevant to this action, at 900 Water Street, Racine, Wisconsin

53403, with OLSON as the registered agent.

12. That SAM AZARIAN & SONS MARINA, INC. (hereinafter “MARINA”) is a

Wisconsin corporation duly organized and existing under the laws of the State of Wisconsin yet

now a discontinued business with its principal office located 1535 High Street, Racine, Wisconsin

53404.

13. That AZAR, LLC (hereinafter “AZAR”) is a limited liability company duly

organized and existing under the laws of the State of Wisconsin with its principal place of business

located 1535 High Street, Racine, Wisconsin 53404.

14. That AZARIAN WRECKING, LLC (hereinafter “AZARIAN WRECKING”) is a

limited liability company duly organized and existing under the laws of the State of Wisconsin

with its principal place of business located 1535 High Street, Racine, Wisconsin 53404.

15. That RAZA OF RACINE LLC (hereinafter “RAZA”) is a limited liability company

duly organized and existing under the laws of the State of Wisconsin with its principal place of

business located at 1535 High Street, Racine, Wisconsin 53404.

16. That the Defendant, CITY OF RACINE, (hereinafter the “CITY”) is municipal

corporation incorporated under Wisconsin Statutes as a City pursuant to Wis. Stats Ch. 66.


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17. That the Defendant, REDEVELOPMENT AUTHORITY OF THE CITY OF

RACINE (hereinafter “RDA”) is a subdivision of the CITY created and acting under and pursuant

to Wis. Stats. § 66.1333(3).

18. That the RDA has the power to condemn, as defined within Wis. Stats. §§

66.1333(3)(f) and 32.02(11).

19. That JAMES SPANGENBERG (hereinafter “SPANGENBERG”) is an adult

resident of the State of Wisconsin, upon information and belief, residing at 3324 Foxwood Rd.,

Racine, Wisconsin 53405.

20. That SPANGENBERG is named in his role as Chairman of the RDA at all times

relevant to the conduct complained of herein.

21. That MATTHEW SADOWSKI (hereinafter “SADOWSKI”) is, upon information

and belief, an adult resident of the State of Wisconsin residing at 724 Monroe Street, Racine,

Wisconsin 53405.

22. That SADOWSKI is named in his role as Acting and Interim Director of City

Development for the CITY and as Assistant Executive Director of the RDA at all times relevant

to the conduct complained of herein.

23. That THOMAS J. FRIEDEL (hereinafter “FRIEDEL”) is, upon information and

belief, an adult resident of the State of Wisconsin, upon information and belief, residing at 1904

Dwight Street, Racine, Wisconsin 53403.

24. That FRIEDEL is named in his previous role as City Administrator for the CITY,

having held such position and acting under the authority of the CITY and in his individual capacity

at all times relative to the conduct complained of herein.


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25. That JOHN DICKERT (hereinafter “DICKERT”) is, upon information and belief,

an adult resident of the State of Wisconsin, upon information and belief, residing at 151

Westminster Square, Racine, Wisconsin 53402.

26. That DICKERT is named in his previous role as Mayor for the CITY, having held

such position and acting under the authority of the CITY and in his individual capacity at all times

relative to the conduct complained of herein.

CORPORATE/REAL ESTATE OWNERSHIP STATUS

27. That OLSON was the owner of the real estate located at 900 Water Street, Racine,

Wisconsin (hereinafter “900 WATER ST.”).

28. That MARQUETTE DISTRIBUTION was, at all times relevant hereto, the owner

of the real estate located at 615 S. Marquette Street, Racine, Wisconsin and 922 Sixth Street,

Racine, Wisconsin (collectively hereinafter “615 MARQUETTE ST.”).

29. That MARQUETTE WAREHOUSE was the owner of the real estate located at 526

S. Marquette Street, Racine, Wisconsin (hereinafter “526 MARQUETTE ST.”).

30. That RIM, as a business tenant, operated an indoor motocross track at 526

MARQUETTE ST.

31. That USA, as a business tenant, operated an urban hydroponic farm for the growing

and sale of farm raised tilapia, basil and lettuce, and the raising of giant prawns at 615

MARQUETTE ST.

32. That the following properties shall be considered and referenced herein further as

the “OLSON PROPERTIES”:

- 900 Water St.

- 615 Marquette St.


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- 526 Marquette St.

33. That MARINA owned the real property located at the following locations:

- 308 – 4th Street, Racine, Wisconsin

- 470 Water Street, Racine, Wisconsin



- 1010 Water Street, Racine, Wisconsin (hereinafter collectively known as the

“MARINA PROPERTIES”).

34. That MARINA operated a marina, boat storage and boat service business from the

MARINA PROPERTIES.

35. That AZAR owned the properties located at 512 Water Street, Racine, Wisconsin

and 702 Water Street, Racine, Wisconsin (hereinafter collectively the “AZAR PROPERTIES”).

36. That AZARIAN WRECKING was a business tenant at both the MARINA

PROPERTIES and AZAR PROPERTIES.


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FACTS PERTAINING TO ALL COUNTS

37. That beginning in and around 2008, the CITY and the RDA, formulated plans for

the area encompassing the OLSON PROPERTIES, MARINA PROPERTIES and AZAR

PROPERTIES, collectively the “Subject Area” or “Subject Area Properties” with the 2008

rendition of such plans known as “Back to the Root Plan.”

38. That beginning in and around 2012 the CITY and the RDA enlisted the services of

Vandewalle and Associates, Inc. to market and promote the redevelopment of the area

encompassing the Subject Area under the plan known as “RootWorks Plan.”

39. That the RootWorks Plan was further organized by Vandewalle and Associates with

an informational brochure printed by the Racine County Economic Development Corporation

(hereinafter “RCEDC”), entitled the Root River Corridor Redevelopment Plan 2012, Racine,

Wisconsin (hereinafter the “Root River Corridor Plan”).

40. That the RootWorks Plan was to benefit the City of Racine in redeveloping the area

of the Root River from generally N. Memorial Drive, east to State Street, all within the City of

Racine.

41. That the RootWorks Plan combined local, State and Federal funding sources,

including grants and a Tax Incremental Financing District (TID #18) within the City of Racine.

42. That beginning in and around late 2013 and early 2014, the CITY and the RDA

began promoting the area encompassing the Subject Area for redevelopment under the RootWorks

Plan with this portion of it known as “Machinery Row” (hereinafter “Machinery Row”).

43. That Machinery Row was proposed to be a $65,000,000.00 mixed-use

redevelopment spread over a 20-acre parcel which was proposed to be the CITY’s largest

redevelopment project ever.


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44. That, as defined by the Vandewalle brochure, the CITY identified the role

Machinery Row played in the RootWorks Plan as, “the catalyst for RootWorks is Machinery

Row.”

45. That the RootWorks Plan included plan renderings noting the various components

encompassing and including Machinery Row. Further, attached hereto incorporated herein and

made a part hereof as Exhibit “A” are true and correct copies of plan renderings.

FEDERAL FUNDING

46. That the RootWorks Plan, as adopted in 2012, was funded, in part, by a federal

grant from the National Oceanic and Atmospheric Administration (“NOAA”) as grant

#NA11N0S4190097 (hereinafter “NOAA GRANT”).

47. That in addition to the NOAA GRANT, the RootWorks Plan, received funding

from the RCEDC, which is partially funded by a federal Community Development Block Grant.

48. That the Environmental Protection Agency (hereinafter “EPA”) provided a grant in

the sum of approximately $200,000.00 for clean-up of contaminated lands within the RootWorks

Plan (hereinafter the “EPA Grant”).

49. That as part of the RootWorks Plan, the CITY received $15,921.00 from a Federal

Trails Grant.

50. That the CITY and RDA received “Federal Financial Assistance” as defined in 42

U.S.C. § 4601(4), for the RootWorks Plan.

OPTIONS TO PURCHASE

51. To accomplish Machinery Row, the CITY sought out private developers for the

development of the same with the development including the acquisition of the OLSON

PROPERTIES, MARINA PROPERTIES and AZAR PROPERTIES.


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52. That the CITY subsequently partnered with Financial District Properties of

Davenport, Iowa (hereinafter “FDP”) for development of the Machinery Row Project.

53. That beginning in and around February, 2014, representatives for the OLSON

PROPERTIES, MARINA PROPERTIES and AZAR PROPERTIES met with representatives

from FDP, about FDP’s potential acquisition of the OLSON PROPERTIES, MARINA

PROPERTIES and AZAR PROPERTIES as part of the RootWorks Plan.

54. That based on discussions and negotiations with FDP, representatives for the

OLSON PROPERTIES, MARINA PROPERTIES and AZAR PROPERTIES entered into an

option with FDP obtaining an option to purchase the MARINA PROPERTIES, AZAR

PROPERTIES and OLSON PROPERTIES (collectively the “OPTIONS”).

55. That the OPTIONS were signed on or about and March 20, 2014.

56. That the option-price for FDP to purchase the MARINA PROPERTIES and AZAR

PROPERTIES was $1.1 million

57. That the option-price for FDP to acquire the OLSON PROPERTIES was $1.5

million for 900 WATER ST. and $3 million for 526 MARQUETTE ST. and 615 MARQUETTE

ST.

58. That the OPTIONS were extended and amended numerous times by FDP.

59. That in and around May, 2014, OLSON, at the request of FDP, signed a request for

a State Historic Tax Credits for the 900 WATER ST.

60. That on or about June 9, 2014, the State of Wisconsin awarded a $9,000,000.00

historic tax credit for the 900 WATER ST. property.

61. That on June 10, 2014, DICKERT held a press conference announcing the

Machinery Row Development as part of the CITY-adopted RootWorks Plan.


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62. That DICKERT, at the June 10, 2014 Press Conference announced, “we built the

Plan (RootWorks) and now we are working the Plan.”

63. That the historic tax credit awarded required that FDP take ownership of 900

WATER ST. no later than December 31, 2014.

64. That the OLSON PROPERTIES were essential for the RootWorks Plan.

65. That the MARINA PROPERTIES and AZAR PROPERTIES were essential to the

RootWorks Plan.

66. That OLSON required that FDP also purchase the properties located at 615

MARQUETTE ST. and 526 MARQUETTE ST.

67. That FDP refused to acquire such properties as part of the 900 WATER ST.

acquisition.

68. That the RDA subsequently offered to purchase 615 MARQUETTE ST. and 526

MARQUETTE ST. as part of Phase II of the Machinery Row/RootWorks Project.

69. That the RDA agreed to pay the sum of $800,000.00 for 526 MARQUETTE ST.

70. That the RDA agreed to pay the sum of $1 million for 615 MARQUETTE ST.

FDP SALE CLOSINGS

71. That following the original Options, FDP negotiated reductions to the Option prices

on all of the Subject Area Properties.

72. That after June 10, 2014, but prior to December 31, 2014, upon information and

belief, FDP advised the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI

that it did not plan to proceed with the Machinery Row Project.

73. That, upon information and belief, the CITY, RDA, FRIEDEL, DICKERT,

SPANGENBERG, and SADOWSKI offered to provide a loan to FDP to acquire 900 WATER ST.


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and the MARINA PROPERTIES and AZAR PROPERTIES in the total sum of $4,500,000.00

(hereinafter the “LOAN”).

74. That, upon information and belief, when the CITY, RDA, FRIEDEL, DICKERT,

SPANGENBERG, and SADOWSKI recommended, authorized and funded the LOAN they knew,

or should have known, that FDP had no intent of moving forwarding with the Machinery Row

Project.

75. That, upon information and belief, the CITY, RDA, FRIEDEL, DICKERT,

SPANGENBERG, and SADOWSKI elected to provide the LOAN to FDP in order to induce FDP

to act as a “Straw Man” for the CITY or RDA to acquire the Subject Area Properties.

76. That the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI

additionally allowed FDP to fund an escrow account at the time of closing to pay the interest on

the LOAN, pay FDP its costs and fees and allow the CITY to pay for maintenance, upkeep and

taxes (hereinafter the “ESCROW”).

77. That the ESCROW was further used to induce FDP to close on the transaction and

allow the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI to locate and

transfer the Machinery Row Project to a developer who was willing to move forward with the

Project, or transfer ownership to the CITY or RDA.

78. That prior to closing on 900 WATER ST., the CITY, RDA, FRIEDEL, DICKERT,

SPANGENBERG, and SADOWSKI negotiated a Deed in Lieu of Foreclosure Agreement with

FDP, allowing the CITY to reclaim 900 WATER ST. and the MARINA PROPERTIES and AZAR

PROPERTIES when and if FDP defaulted on the LOAN.


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79. That at the time the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and

SADOWSKI obtained the Deed in Lieu of Foreclosure Agreement they knew that FDP was not

going to develop the Machinery Row Project.

80. That the LOAN was not secured by any personal guarantees, bonds or other security

other than a pledge of the interest in the real estate.

81. That with the LOAN provided, when reducing it by the ESCROW, FDP was unable

to meet the total contract amounts for the MARINA PROPERTIES, AZAR PROPERTIES, and

900 WATER ST. as had been negotiated (hereinafter the “Shortfall”) by and between FDP,

OLSON and representatives for MARINA PROPERTIES and AZAR PROPERTIES.

82. That given the Shortfall, FDP forced a negotiated reduction in the purchase price

approximately 12 hours prior to closing with OLSON and representatives for MARINA

PROPERTIES and AZAR PROPERTIES.

83. That the forced reduction, to fund the ESCROW, resulted in OLSON receiving

$150,000 less than the sale price of 900 WATER ST.

84. That the forced reduction, to fund the ESCROW, resulted in MARINA

PROPERTIES and AZAR PROPERTIES receiving $110,000 less than the sale price of the

properties.

85. That the CITY, RDA, FRIEDEL, DICKERT, SPANGENBERG, and SADOWSKI

knew, or should have known, that FDP, given the authorization to fund the ESCROW, utilized

such shortfall in the LOAN to negotiate reductions in the purchase prices of 900 WATER ST. and

MARINA PROPERTIES and AZAR PROPERTIES.


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RDA CLOSINGS – OLSON PROPERTIES

86. That in conjunction with the $4.5 million LOAN, and in furtherance of Machinery

Row, the CITY and RDA also authorized the purchase of the 526 MARQUETTE ST. and 615

MARQUETTE ST. by the RDA.

87. That the RDA paid $800,000.00 for 526 MARQUETTE ST.

88. That the RDA paid $1 million for 615 MARQUETTE ST.

89. That OLSON originally negotiated a sale price, with FDP, for 526 MARQUETTE

ST. in the sum of $1.5 million.

90. That OLSON originally negotiated a sale price, with FDP, for 615 MARQUETTE

ST. in the sum of $1.5 million.

91. That the RDA renegotiated the purchase price with OLSON reducing the sale price

of 526 MARQUETTE ST. by $700,000.00 and for 615 MARQUETTE ST. by $500,000.00

92. That at the time the RDA negotiated with OLSON on the 526 MARQUETTE ST.

and 615 MARQUETTE ST. buildings, the CITY, RDA, FRIEDEL, DICKERT,

SPANGENBERG, and SADOWSKI knew that the owners of the OLSON PROPERTIES were

behind in real estate taxes.

93. That at the time the RDA negotiated with OLSON on the 526 MARQUETTE ST.

and 615 MARQUETTE ST. buildings, the CITY, RDA, FRIEDEL, DICKERT,

SPANGENBERG, and SADOWSKI knew that the owners of the OLSON PROPERTIES were in

default under its existing promissory note and mortgages with its lenders.

94. That while the RDA was negotiating with OLSON on the 526 MARQUETTE ST.

and 615 MARQUETTE ST. properties the CITY continued to repeatedly served OLSON with

notices of fire code violations and building code violations to wit.:


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A. Requirement that OLSON extend the water lateral at his cost.

B. Requirement that OLSON repair the sidewalk adjacent to the OLSON

PROPERTIES.

C. Requirement that OLSON conduct snow plowing at the OLSON

PROPERTIES.

D. Requirement that OLSON repair the sprinkler system at the OLSON

PROPERTIES.

E. Repeated flood and drain sprinkler system testing at the OLSON

PROPERTIES.

95. That the above referenced code inspections and compliance requirements were

carried out by the City of Racine Fire Department and City of Racine Building Department, upon

information and belief, at the direction of the CITY, RDA, FRIEDEL, and/or DICKERT.

96. That, upon information and belief, the code inspections and requirements were done

to leverage negotiations with OLSON allowing the RDA to acquire the properties for reduced

amounts, not representing just compensation.

97. That SPANGENBERG was the Chairman of the RDA when the acquisition of 526

MARQUETTE ST. and 615 MARQUETTE ST. were authorized, with SPANGENBERG moving

the action and voting for the same.

98. That SADOWSKI was the Interim Executive Director of the RDA when the

acquisition of 526 MARQUETTE ST. and 615 MARQUETTE ST. were authorized.

99. That, upon information and belief, SPANGENBERG and SADOWSKI were, or

should have been aware that MARQUETTE WAREHOUSE was a business tenant at 526

MARQUETTE ST. when the RDA acquired the same.


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should have been aware that RIM was a business tenant at 526 MARQUETTE ST. when the RDA

acquired the same.


should have been aware that MDC was a business tenant at 615 MARQUETTE ST. when the RDA

acquired the same.


should have been aware that USA was a business tenant at 615 MARQUETTE ST. when the RDA

acquired the same.

103. That the RDA and CITY, via its agents, forced MARQUETTE WAREHOUSE to

remove from the 526 MARQUETTE ST. on or about May 15, 2015.

104. That the RDA and CITY, via its agents, forced RIM to remove from the 526

MARQUETTE on or about May 15, 2015.

105. That the RDA closed on the acquisition of 615 MARQUETTE ST on December

30, 2015.

106. That the RDA did not make the last payment due and owing to OLSON, for the

sale of 615 MARQUETTE ST. until February 5, 2016.

107. That 900 WATER ST., 526 MARQUETTE ST., and 615 MARQUETTE ST. were

all acquired as part of the same project as defined within Wis. Stats. § 32.20.

DOA COMPLAINT

108. That on May 2, 2017, a Tenant at 615 MARQUETTE ST. filed a complaint with

the Wisconsin Department of Administration (“DOA”) alleging that he was entitled to business

relocation benefits as a business tenant displaced for a public project.


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109. That on June 9, 2017, the DOA determined that the Machinery Row project was a

“public project” under Wisconsin Law in that it was “being carried out directly by a public entity,

or an entity receiving public financial assistance, including a grant, loan, or contribution” under

the Wisconsin Administrative Code. Further attached hereto and incorporated herein and made a

part hereby reference as Exhibit “B” is a true and correct copy of the DOA determination.

RELOCATION PLAN

110. That, pursuant to Wis. Stats. § 32.25 and Wis. Adm. Code ADM § 92.26, the RDA

was required to submit a relocation plan prior to displacing any tenants.

111. That, at no time, has the RDA completed a relocation plan as mandated.

112. That despite notice that this was a public project and subject to relocation benefits

on June 9, 2017, the CITY and/or RDA has yet to prepare and/or file a relocation plan.

KNOWLEDGE BY THE CITY AND RDA OF RELOCATION BENEFITS

113. That prior to the DOA complaint and determination, the CITY, RDA, FRIEDEL,

DICKERT, SPANGENBERG, and SADOWSKI were all aware that the Machinery Row Project

was a public project, as defined under Wisconsin law, and the same triggered relocation benefits.

114. That beginning in April 2014, the RDA and CITY directed SADOWSKI to prepare

a relocation plan for properties located at 1251, 1281 and 1287 Mound Ave., Racine, Wisconsin

(hereinafter the “MOUND AVE. PROPERTIES”).

115. That the MOUND AVE. PROPERTIES were being acquired by the CITY, with the

CITY acting as the RDA’s agent.

116. That the MOUND AVE. PROPERTIES were being acquired under the RootWorks

Plan.


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117. That SADOWSKI prepared a relocation plan for the MOUND AVE.

PROPERTIES (hereinafter the “Mound Ave. Relocation Plan”).

118. That the RDA and SPANGENBERG approved the Mound Ave. Relocation Plan

on May 19, 2014.

119. That the CITY approved the Mound Ave. Relocation Plan on May 20, 2014.

120. That SADOWSKI, as agent for the CITY and RDA, submitted the Mound Ave.

Relocation Plan to the DOA on July 28, 2014.

121. That SADOWSKI was present and was advising the RDA on December 12, 2014

pertaining to the acquisition of the Subject Area Properties at the RDA meeting where

SPANGENBERG and the RDA voted to acquire the same.

122. That on December 12, 2014 the RDA, SPANGENBERG and SADOWSKI were

aware that the Subject Area Properties was included within the same public project, as the

MOUND AVENUE PROPERTIES.

123. That, upon information and belief, in preparing for the action taken on December

12, 2014, the RDA, SPANGENBERG and SADOWSKI had discussions in closed session about

the payment or non-payment of relocation benefits for the Subject Area Properties.

124. That the RDA, SPANGENBERG and SADOWSKI either intentionally or

negligently failed to file a relocation plan for the Subject Area Properties, owners and tenants.

125. That on January 27, 2016 a tenant at 1251 Mound Ave. Racine, Wisconsin, filed a

claim for relocation benefits with the CITY and the same was processed and paid by March 2,

2016 (hereinafter the “Mound Avenue Claims”).


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126. That the CITY and RDA recognized and processed relocation payments beginning

in January, 2016 yet have failed to process, pay or file a relocation plan for the Subject Area

Properties.

PROCESSING OF CLAIMS

127. That the RDA subsequently hired a relocation company, Terra Ventures, LLC, to

assist in any relocation claims.

128. That OLSON, MARQUETTE WAREHOUSE, MDC and USA filed six (6) claims

with the RDA, via its agent, Terra Ventures LLC as follows:

a. September 25, 2017 Claim for $12,189.09, filed by MARQUETTE

WAREHOUSE (hereinafter “Claim 1”) attached as Exhibit “C”.

b. October 9, 2017 Claim for $280,000.00 filed by MARQUETTE

WAREHOUSE (hereinafter “Claim 2”) attached as Exhibit “D”.

c. October 9, 2017 Claim for $181,579.00 by MARQUETTE WAREHOUSE

(hereinafter “Claim 3”) attached as Exhibit “E”.

d. November 6, 2017 Claim for $121,200.00 by MDC (hereinafter “Claim 4”)

attached as Exhibit “F”.

e. September 25, 2017 Claim for $15,604.37 by MDC (hereinafter “Claim 5”)

attached as Exhibit “G”.

f. November 6, 2017 Claim for $491,740.00 by USA (hereinafter “Claim 6”)

attached as Exhibit “H”.

129. That despite the determination by the DOA in June 2017, the RDA only first

considered the above referenced claims on December 7, 2017.

130. That the RDA has denied all but portions of two claims submitted by OLSON via

written determination on December 15, 2017. Further, attached hereto and incorporated herein

made a part hereby reference as Exhibit “I” is a true and correct copy of such determination

approving partial payments of two of OLSON’s six (6) claims.


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131. That the RDA has not yet been paid any relocation benefits to OLSON.

AZARIAN MARINA, AZAR, AZARIAN WRECKING, AND

RAZA RELOCATIONS CLAIMS

132. That the CITY nor the RDA have ever provided notice of relocation benefits to

AZARIAN MARINA, AZAR, AZARIAN WRECKING, or RAZA.

133. That AZARIAN MARINA is a displaced business pursuant to Wis. Stats. Ch. 32

and the Uniform Act.

134. That AZAR is a displaced business pursuant to Wis. Stats. Ch. 32 and the Uniform

Act.

135. That AZARIAN WRECKING is a displaced tenant pursuant to Wis. Stats. Ch. 32

and the Uniform Act.

136. That RAZA is a displaced tenant pursuant to Wis. Stats. Ch. 32 and the Uniform

Act.

137. That AZARIAN WRECKING and RAZA occupied the MARINA PROPERTIES

and AZAR PROPERTIES under an agreement by and between the parties.

138. That AZARIAN WRECKING and RAZA have been displaced from the MARINA

PROPERTIES and AZAR PROPERTIES and been forced to relocate to 1535 High Street, Racine,

Wisconsin (hereinafter “HIGH STREET PROPERTY”).

139. That AZARIAN WRECKING and RAZA are forced to expend sums at the HIGH

STREET PROPERTY in excess of its expenditures at the MARINA PROPERTIES and AZAR

PROPERTIES.

140. That AZARIAN WRECKING and RAZA are entitled to its actual moving costs

together with the difference in rent/expenses from the amounts paid at the MARINA

PROPERTIES and AZAR PROPERTIES in comparison to the HIGH STREET PROPERTY.


Page 22

141. That FDP’s acquisition of the MARINA PROPERTIES and AZAR PROPERTIES

was done as a “Straw Man” for the sole benefit of the CITY and RDA and as the CITY and RDA’s

agent.

COUNT I

FAILURE TO FOLLOW REAL PROPERTY

ACQUISITION POLICY UNDER FEDERAL LAW

142. Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under this

count.

143. That Defendants received federal dollars in connection with its acquisition of the

Property, including (a) a federal grant from the Environmental Protection Agency for brownfields

clean-up; (b) a federal grant from the National Oceanic and Atmospheric Administration for partial

funding for the City of Racine’s “RootWorks Plan”; (c) Community Development Block Grant

funds, administered by the United States Department of Housing and Urban Development, for real

property acquisition; and (d) federal Recreational Trails Program funds, administered by the

United States Department of Transportation's Federal Highway Administration, for real property

acquisition.

144. That Defendants were required to comply with the Uniform Act and the regulations

thereunder in connection with the acquisition of the Subject Area Properties.

145. That Defendants have specific duties under the Uniform Act and the regulations

thereunder, including following the “basic acquisition policies” set forth at 49 C.F.R. § 24.102 and

paying certain expenses incidental to the transfer of title to it under 49 C.F.R. § 24.106.

146. That the acquisition of Plaintiffs’ property by Defendants did not qualify as a

“voluntary transaction” within the meaning of 49 C.F.R. § 24.101(b).


Page 23

147. That at a minimum, in failing to follow the basic acquisition policies and paying

certain expenses incidental to the transfer of title to Defendants, Defendants failed to comply with

the Uniform Act and the regulations thereunder.

148. That Plaintiffs have suffered, and will continue to suffer, damages as a direct result

of Defendants’ failure to comply with the Uniform Act and the regulations thereunder.

149. That Defendants failure to follow the Uniform Act resulted in the Plaintiff property

owners not receiving just compensation for the properties acquired.

150. That as and for a preliminary measure of just compensation, the Plaintiff property

owners should have been entitled to the contracted amount for the acquisition of their respective

properties versus a reduced amount to fund the escrow.

151. That as and for computation of just compensation, the Plaintiff property owners

should be entitled to appraisals of their respective properties as of the date of closing.

152. That Defendants’ failure to comply with the Uniform Act has caused the Plaintiff

property owners to suffer loss via less than just compensation for the CITY and/or RDA acquiring

the Subject Area Properties.

COUNT II

FAILURE TO COMPLY WITH WIS. STATS. CH. 32


count.

154. That Defendants have the power to condemn real property pursuant to Wis. Stats.

§§ 32.02(1) and (11) and are defined as a “condemnor” under Wis. Stats. § 32.185.

155. That Defendants were required to comply with Wis. Stats. § 32.06 in connection

with the acquisition of the Subject Area Properties.


Page 24

156. That Defendants have specific duties under Wis. Stats. § 32.06, including obtaining

a full narrative appraisal, issuing a jurisdictional offer, and notifying Plaintiffs of their rights in

connection with the acquisition of the Subject Area Properties.

157. That, at a minimum, in failing to obtain a full narrative appraisal, failing to issue a

jurisdictional offer, and failure to notify Plaintiffs of their rights in connection with the acquisition

of the Property, Defendants failed to comply with Wis. Stats. § 32.06.


of Defendants’ failure to comply with the Wis. Stats. §§ 32.06, 32.19, and 32.20

159. That Plaintiff OLSON has not been fully compensated for his relocation claims

pursuant to Wis. Stats. Ch. 32.

160. Plaintiffs MARINA, AZAR, AZARIAN WRECKING, and RAZA have not been

fully compensated for any relocation costs pursuant to Wis. Stats. Ch. 32.

161. That Plaintiffs MARINA, AZAR, AZARIAN WRECKING, and RAZA are

compiling their relocation claims to be submitted to the CITY and RDA upon completion.

COUNT III

WRIT OF MANDAMUS


count.

163. That pursuant to Wis. Stat. § 32.25 the CITY and/or the RDA were required to

provide Plaintiffs with a notice of relocation benefits being available and provide them with a

relocation plan and/or compensation under relocation claims.

164. That despite notice from the DOA, the CITY and RDA have failed to provide the

Plaintiffs with any relocation plan.


Page 25

165. That the RDA is duly bound by Wis. Stat. Ch. 32 and Wis. Adm. Code ADM Ch.

92 to file a relocation plan as defined thereunder.

166. That the RDA is duly bound by Wis. Stat. Ch. 32 and Wis. Adm. Code ADM Ch.

92 to process relocation claims.

167. That the duties required of the RDA by Wis. Stat. Ch. 32 and Wis. Adm. Code

ADM Ch. 92 are ministerial acts mandated by Wisconsin law.

168. That the delay in processing and receiving relocation benefits has and continues to

cause substantial economic loss to the Plaintiffs.

169. That Wis. Adm. Code ADM § 92.001 requires that displaced persons are “treated

uniformly, fairly and equitably.”

170. That until such time as the RDA prepares and files a relocation plan and processes

all of Plaintiffs’ relocation claims and assists with relocation, the Plaintiffs are without any

adequate remedy at law.

171. That the Plaintiffs have not been treated in the manner mandated by Wisconsin law

COUNT IV

VIOLATION OF THE FIFTH AMENDMENT TO

THE UNITED STATES CONSTITUTION AND

ARTICLE 1 § 13 TO THE WISCONSIN CONSTITUTION


count.

173. That Plaintiffs have a right of just compensation for property taken by Defendants

under the Fifth Amendment of the United States Constitution and Article 1 § 13 to the Wisconsin

Constitution.


Page 26

174. That Defendants have not provided just compensation to Plaintiffs for the taking of

their property.


of Defendants’ failure to comply with the Fifth Amendment of the United States Constitution and

Article 1 § 13 to the Wisconsin Constitution.

COUNT V

VIOLATION OF THE FOURTEENTH AMENDMENT TO

THE UNITED STATES CONSTITUTION AND

ARTICLE 1 § 1 TO THE WISCONSIN CONSTITUTION


count.

177. That Pursuant to the Fourteenth Amendment to the United States Constitution and

Article 1 § 1 to the Wisconsin Constitution, Plaintiffs were entitled to equal protection in the

application to them of the Constitution and laws of the United States and the State of Wisconsin.

178. That Plaintiffs were denied relocation assistance and benefits while other similarly-

situated persons whose land had been taken were given relocation assistance, benefits, and justly

compensated. As a result, Plaintiffs have not been equally treated under law. As such, at a

minimum, Plaintiffs form a class of companies owned all or in substantial part by OLSON,

MARINA, AZAR and AZARIAN WRECKING, which were treated unequally under the

Fourteenth Amendment. See, Village of Willowbrook v. Olech, 528 U.S. 562 (2000).

179. That despite providing Plaintiffs no relocation assistance, benefits, or just

compensation, Defendants provided relocation assistance and just compensation to others.


Page 27

180. That Defendants’ conduct constitutes a violation of the equal protection clause of

the Fourteenth Amendment to the United States Constitution and Article 1 § 1 to the Wisconsin

Constitution.


of Defendants’ failure to comply with the Fourteenth Amendment of the United States Constitution

and Article 1 § 1 to the Wisconsin Constitution.

COUNT VI

DEPRIVATION OF RIGHTS IN VIOLATION OF 42 U.S.C. § 1983


count.

183. That under the Uniform Act and the regulations promulgated thereunder,

Defendants had a duty to ensure that persons and companies whose property is taken for public

projects are treated fairly, equitably and consistent with their constitutional rights. Further, under

the Uniform Act and the regulations promulgated thereunder, Defendants had a duty to ensure that

displaced persons “will not suffer disproportionate injuries” as the result of public projects.

184. That the Fifth Amendment to the United States Constitution, incorporated to the

states through the Fourteenth Amendment, guarantees that no person shall be deprived of property

without due process of law, nor shall such property be taken for public use without just

compensation.

185. That Article 1 § 1 to the Wisconsin Constitution guarantees equal protection of the

laws.

186. That pursuant to the Fourteenth Amendment to the United States Constitution and

Article 1 § 1 to the Wisconsin Constitution, Plaintiffs were entitled to equal protection in the


Page 28

application to them of the constitution and laws of the United States and the State of Wisconsin.

Because, as set forth in this Complaint, the Plaintiffs were denied benefits others received,

Plaintiffs have not been equally treated.

187. That pursuant to the Fifth and Fourteenth Amendments to the United States

Constitution and Article 1 § 13 to the Wisconsin Constitution, Plaintiffs were entitled to

substantive and procedural due process and just compensation for the taking of Plaintiffs’ property.

188. That Defendants, acting under color of both state and federal law, have engaged in

a series of actions that have deprived Plaintiffs of their rights to be treated fairly, equitably, and

consistent with their rights secured by both state and federal law.


of Defendants’ failure to comply with 42 U.S.C. § 1983.

COUNT VII

CONSPIRACY TO INTERFERE WITH CIVIL RIGHTS

IN VIOLATION OF 42 U.S.C. § 1985(3)


count.

191. That Defendants acted in concert for the purpose of preventing or hindering the

constituted authorities of Wisconsin from giving or securing Plaintiffs the equal protection of the

laws. Namely, Defendants discussed, planned, and intentionally disregarded Plaintiffs’ rights

under the United States Constitution, Wisconsin Constitution, the Uniform Act, the regulations

thereunder, and Wisconsin statutes and regulations.


of Defendants’ conspiracy to interfere with Plaintiffs’ civil rights contrary to 42 U.S.C. § 1985(3).


Page 29

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs pray for relief as follows:

A. For a Mandamus order directing the Defendants, CITY and RDA, to produce a

relocation plan pursuant to Wisconsin Statutes.

B. For just compensation for the taking of Plaintiffs’ property in an amount to be

determined at trial;

C. For any relocation or other benefits accrued or owed to Plaintiffs for the taking of

Plaintiffs’ property in an amount to be determined at trial;

D. For all consequential damages suffered by Plaintiffs as the result of Defendants’

deprivation of their rights secured by the Constitution and laws of the United States in an amount

to be determined at trial;

E. For punitive damages in an amount to be determined at trial;

F. For certain litigation expenses including attorney’s fees, costs, and disbursements

incurred herein pursuant to 49 C.F.R. § 24.107, 42 U.S.C. 1988, Wis. Stats. § 32.28, and other

applicable law; and

G. For such other relief as the court deems just and equitable under the circumstances.

PUNITIVE DAMAGES DEMAND

Defendants are hereby put on notice that Plaintiffs are requesting punitive damages

DEMAND FOR JURY TRIAL

Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiffs hereby request a

trial by jury for the issues of fact in this action.


Page 30

Dated this 29th day of December, 2017.

GUTTORMSEN & TERRY, LLC,

Attorneys for the Plaintiffs

By:

Todd A. Terry, Attorney at Law

State Bar Number: 1047175

DRAFTED BY:

Todd A. Terry, Attorney at Law

SBN: 1047175

4015 80th Street, Suite H

Kenosha, WI 53142

Telephone: (262) 842-2338

Facsimile: (262) 584-9949

Email: [email protected]


mailto:[email protected]

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