City of Milwaukee Closed Esperanza Unida International Building Due To Fire Hazard

Faulty fire water sprinkle compressor system caused a five-day closing of the South side Esperanza Unida International building by order of the City of Milwaukee.

By H. Nelson Goodson

June 25, 2014

Milwaukee, WI - On Wednesday, the City of Milwaukee gave Esperanza Unida, Inc. a two hour notice to close their International building located at 611 W. National Ave. due to a faulty fire water sprinkle compressor system. The Esperanza Unida International building will be closed for the next five-days, according to Manuel "Manny" Pérez, the executive director of Esperanza Unida.

Pérez said, that on Monday employee's were doing an inspection of the fire sprinkle system when it was discovered that the compressor wasn't working. Pérez notified the city and on Wednesday around 10:00 a.m., Pérez was given a two hour notice to close the entire building effecting 20 tenants. Tenants are not allowed in the building without authorization or conduct business during the lock out. 

A contractor has been called to fix the system and it will take at least five-days to repair the sprinkle water system compressor, according to Pérez. The estimated cost to fix the water system could be under $12,000.

Hispanic News Network U.S.A. (HNNUSA) was the first to report that the Esperanza Unida building had been sold for $1.3M to a local Milwaukee developer who will invest a $7M project to build a 55 apartment unit complex at the 611 W. National Ave. location. The tenants have until December to make arrangements before the developer who has not been identified by Pérez will take over the building.

Conflict of Interest Questioned Among Historic Mitchell Street BID 4 Board Members

Dimity Grabowski and Rudy Gutiérrez

At least four Historic Mitchell Street BID #4 Board members also serve with the Historic Mitchell Street Perservation Corporation, according to information disclosed at last Thursday's BID #4 meeting.

By H. Nelson Goodson

June 20, 2014

Milwaukee, WI - On Thursday, Dimity Grabowski, one of the Historic Mitchell Street Business Improvement District (BID) #4 Board members questioned an alleged conflict of interest among the Board membership. At least four current BID #4 Board members are also Board members for the Historic Mitchell Street Perservation Corporation (HMSPC), Hispanic News Network U.S.A. (HNNUSA) has learned. Grabowski during the BID #4 meeting also requested clarification from Nancy Bush, the executive director for the BID #4 of its association between the two entities. 

A two hour session was scheduled before the next BID #4 meeting on July 17 to discuss Grabowski's request and the $247,000 discrepancy that HNNUSA reported. Grabowski stated to HNNUSA, "I have full faith that our new President, Rudy Gutiérrez will be a "positive" voice for Mitchell St., on the BID #4. My direct concerns are related to the obvious conflict of interest within several BID #4 members who currently serve on the HMSPC jointly." Grabowski is the owner of Think Resale on Historic Michell Street.

Last Monday, Bush released that the BID #4 had made $2,562.49 after costs during Sun Fair 2012, an annual street outdoor event. In April 2013, Ron Giguere, then president of the BID #4 told the Bussiness Journal (BJ) that the Sun Fair had made over $250,000, which HNNUSA reported. Giguere abruptly resigned as president of the BID #4 in October 2013. 

The building at 1635 S. 8th St. where the BID #4 is housed is owned by

the HMSPC, which Giguere is the current Chair of the Board. Bush says, it rents the first floor, which actually are three rooms. The BID #4 pays about $1,200 per month and both the BID and HMSPC share the whole building, which has no separate entrances or exits for each group. The house doesn't even have a sign outside the building indicating that BID #4 is at the location.

BID #4 has not responded to Giguere's statement to the BJ and if they found any funding missing or not reported concerning the Sun Fair event in 2012.

Bush also wouldn't release her annual salary, but HNNUSA has learned that she makes over $63,300 annually, including benefits, cellphone service and gas allowance. Bush's salary is funded through levy accessments collected from businesses and property owners along the Mitchell Street Business district.

There are 30 BID's in the City of Milwaukee, not all have the same assessment formula. The BID #4's is $4.00 per $1,000 of assessed commercial property value, not to exceed $2500, Bush confirmed.

In an e-mail to HNNUSA, Bush wrote, "In 2012, the Sun Fair did not make "more than $250,000," it made $2,562.49. Last year, in 2013, the event made $911.26. In 2011, its first year, the event made $1,296.16." HNNUSA learned that the Rainbow Valley Carnival and Rides (RVC) gave BID #4 $16,895 in commission in 2013. Sun Fair in 2013 made $20,889, total expenses were $19,997.74, net income $911.26.

In 2014 and 2013, BID #4 paid $7,903 for a city permit to block off W. Historic Mitchell Street from S. 8th to S. 11th Streets for the three day event. 

This year, Sun Fair 2014 made $19,235, the expenses reported were $14,946,51 and net income $4,288.49. The RVC commission to BID #4 was $15,660, according to the BID #4 financial report for Sun Fair 2014. 

Esperanza Unida International Building Sold For $1.3M

Four member Esperanza Unida Board accepted offer before deadline on Wednesday from Milwaukee apartment developer to buy the Esperanza Unida International building for $1.3M to help pay incurred debts.

By H. Nelson Goodson

June 19, 2014

Milwaukee, WI -  On Thursday, Manuel "Manny" Pérez, the executive director of Esperanza Unida, Inc. confirmed, that the current four members of the Board from the non-profit organization had accepted a $1.3 million offer from a local developer to purchase the building and property at 611 W. National Ave. Pérez said, that most of the 20 tenants have until December 31, before the developer will begin making the transition to acquire the property.

The developer will convert the Esperanza Unida International Building into a $7 million development project to create a 55 apartment unit complex and will keep some businesses on the first floor, according to Pérez.

The Esperanza Unida organization will continue to operate at 1329 W. National Ave., where they own a second property.

The current Esperanza Unida Board members are Steed Welch, Chair; James "Jim" Witkowiak, Vice-Chair; Susan Pepper-Sims and Tamara Owens. The Board has three vacant seats, according to Pérez.

Pérez stated, that the Esperanza Unida building was not listed to be sold, but a week ago, the developer made an offer and gave the Esperanza Unida Board until Wednesday to accept the $1.3M offer. The Board couldn't refuse the offer, since it has been on debt and facing a $1.3M deficit. 

Last year, Esperanza Unida ended with $495,000 in gross revenue and for 2014, Pérez projected about $900,000 in gross revenue. But in terms of net income, Esperanza owes $50,000 to CD, it owes $388,000 to the Internal Revenue Service (IRS) and $70,000 to the Wisconsin Department of Workforce Development (DWD) employment insurance. He also confirmed that several "inappropriate loans were made during former Richard Oulahan (1978 to 2005) or right after, which a $600,000 loan from M&I Bank was made before former executive director Robert F. Miranda (2005 to 2014) took over, also a loan from Wells Fargo of $100,000 was made and we have no idea where it is. So, the total debt for Esperanza Unida is beteen $1.2 to $1.3 million," according to Pérez.

Today, about $700,000 in loans has not been able to be accounted for or no records exist for its disbursement and it has been reported to the Federal Economic Development Authority,  Pérez said.

Esperanza Unida rent space was previously valued at $6.50 per square foot during the Oulahan administration and later increased to $8.25 and remained steady for decades. The city recommended $10.00 per square foot and Esperanza Unida remained at $8.25. New tenants rented space at $12.25 per square foot, since Pérez took over. Pérez also said, that Esperanza Unida had a history of being an incubator for helping businesses grow and prosper, but the low rent never generated revenue to cover the costs of maintaining and operating the building.

If the building would have been listed for sale last year, it wouldn't have been sold for more than $800,000. Today, the Board made at least $500,000 more due to current repair maintenance and improvements conducted under Pérez. The $1.3M from the purchase will go to pay over due city taxes, the IRS debt, DWD, several loans and other bills incurred by previous administrations.

Pérez, who would not disclose the name of the developer says, the purchase by the developer will "generate construction jobs, attract community activity and stimulate economic growth." There has been no new development on S. 6th Street or vicinity since, Alderman José G. Pérez was elected, which have kept rent values low. With the lack of any new development, many buildings are under valued in the area, according to city tax records.

José G. Pérez before becoming Alderman in the 12th District had made an offer to a former Board member to purchase the Esperanza Unida building, but no offer amount by made available.

Esperanza Unida, Inc. Board of Directors