Nearly $700K In Loans Authorized By Former Esperanza Unida Executive Director In 1994 And No Accountability Recorded

Real estate mortgage loans totalling at least $690K were taken out by former Esperanza Unida, Inc. executive director Richard Oulahan in 1994.

By H. Nelson Goodson

October 6, 2014

Milwaukee, WI - On Monday, Hispanic News Network U.S.A. (HNNUSA) obtained copies of several real estate mortgages totalling $600,000 ($600K) in loans from Marshall & Ilsley Bank (M&I, now BMO Harris Bank) to the late and former Esperanza Unida, Inc. executive director Richard Oulahan dated June 14, 1994 and August 25, 1994. According to Manuel "Manny" Pérez,  the current executive director of Esperanza Unida there is no record of how those loans were spent. Pérez says, that he was surprised to, why Oulahan authorized to get $600K in loans and might not have been for work related training. "I would like to know how the funds were used," Oulahan in 1994 signed those loans and the Esperanza Unida Board of Directors in that time had oversight of Oulahan and he "had to have signed with the authorization of the Board," Pérez said.

In 1994,  the Esperanza Unida Board members were, Mrs. Isabella Reyes, Mr. Erasmo Espinoza, Ms. Anna Maria Espinoza, Mr. Aurelio Valdez, Mr. Les Perez, Mr. Ismael Ruiz and Mr. Bonifacio Santiago, according to Robert Miranda,  the former Esperanza Unida executive director.

Adam E. Mata in August told HNNUSA, "We tried to stop the bleeding and manage the property. We never got a chance to request federal funds. If we received any they were already in place. I can say for certain we never attempted to get any monies thru a mortgage or refinancing of the building on 611." Mata's associate director in 2005 was Cuauhtemoc "Temo" Rodríguez. 

Rodríguez when contacted stated, "If you have a date on when that transaction took place, then you will be able to zero-in on who made that transaction. I do not recall any such transaction. I'm sure you are aware that Board of Directors approve large transactions and are legally responsible."

Pérez in August stated, "I've indicated to Mr. Adam Mata that the $690K in loans or leans against the 611 building were missing and that I do not know where that money went nor that the Economic Development Authority (EDA) and the State Department of Commerce had approved for these loans to be made." The matter of the missing funds have been turned over to the EDA and State Department of Commerce for review, according to Pérez.

The EDA has requested all records from the banking institutions that made the loans and are tracking the financial paper trail of who requested the loans and where the money ended up.

Pérez also confirmed that the building at 611 W. National Ave. has at least five leans totalling almost $700K and it can't be sold until the EDA approves it and the leans are paid. 

In June, the Esperanza Board of Directors from the non-profit organization had accepted an offer from Callan Shultz, of North Pointe Holdings ll LLC and President of Keystone Development from Oshkosh to sell. The Oshkosh developer offered $1.3M and will invest a $7M project to convert the 611 building into a 55-unit apartment complex and will keep some businesses on the first floor. 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. 

The Esperanza Board must pay at least the 2012 and 2011 delinquent taxes by November 19 or the City of Milwaukee will move forward to foreclose the 611 W. National Ave. property. The 611 property is assessed at $1,948,000, but owes delinquent taxes for 2013, $66,556.24; for 2012, $64,103.63 and for 2011, $46,111.73, a total of $176,771.60, plus incurring tax delinquent penalties per month. The Treasurer's Office says, Esperanza Unida has a redemption period of November 19, which the Esperanza Board has to pay at least $110,215.36 for delinquent taxes for both 2011 and 2012 to forgo foreclosure. 

Pérez had 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 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 between $1.2 to $1.3 million.

"It's a shame that so many people have one way or other benefited from Esperanza Unida and its job training programs, today none have stepped up or come forward to help and support the non-profit organization," Alfonso Morales, Events Entertainment stated. Morales family wanted to open a restaurant at the 611 building, but Alderman José G. Pérez has placed a hold on their food restaurant license. 
Manuel Pérez says, that Esperanza Unida is looking for volunteers to help clean the 1339 W. National Ave. building. Those willing to help clean can sign up at the security front desk at the 611 W. National Ave. building, according Pérez.
Pérez said, that muralist and artist Reynaldo Hernández finally reimbursed Esperanza Unida $1,000 and provided receipts for expenditures incurred to touch up the Esperanza Unida mural. Hernández was paid $2.5K to restore the outdoor Peace mural.

In December 2012, Esperanza Unida had offered the Hispanic  Chamber of Commerce of Wisconsin (HCCW) to take over and oversee the Esperanza Unida properties and programs, but the HCCW never responded with a final decision and Esperanza Unida dropped the offer, according to Miranda.
Today, there are only four tenants left at the 611 building.

The Milwaukee Journal Sentinel (MJS) has published several articles concerning the financial status of Esperanza Unida and Miranda claims that Georgia Pabst, a reporter has intentionally omitted the truth about certain loans. HNNUSA has obtained a statement from Miranda concerning his allegation against Pabst and MJS.

Miranda, released the following statement to HNNUSA, "THE STORY GEORGIA PABST ISN'T TELLING

"Milwaukee Journal Sentinel reporter, Georgia Pabst continues to report selectively the facts about Esperanza Unida. Her attempt to protect her long time friend, founder and former EU executive director Richard Oulahan is clear. 

"In this article, once again Pabst refuses to bring forward the facts about mortgage loans Oulahan signed, totaling $700,000.00. If you read Pabst latest piece on EU you'll notice she avoided to mention the $700,000.00 in loans Richard signed for before having to leave the agency because of sickness in 2003. 

"In fact, BMO Harris bank, the bank that bought out M&I bank and now owns the mortgage loans, recently verified that up until 2002 Richard Oulahan was the sole signer of these mortgage loans. 

"Manny Perez, current executive director, said that during the interview with Pabst he explained to her that the loans were toxic, improper and unaccounted for. That these loans were made before I got there. Pabst knows this to be true. However, she did not even mention these loans as part of the EU debt in her article above. Why? 

"Because questions asking why were these loans made will arise, that's why. Questions like:


1. With these loans why weren't the HVAC systems replaced and repaired at building 611 and 1329 west National Ave.

2. Why weren't the fire sprinklers replaced and fire alarm system modified at 611 building and EU building 1329 west National Ave. 

3. Why wasn't the roof replaced at 611 and 1329 West National Ave. buildings? 

4. Where did the money go? 

"As EU ED, I presented these points to Pabst on many occasions. She always failed to even mention these loans in past articles about EU. She never reported the fact that I had to work to pay over $12,000.00 a month to get these loans under control. Spending this kind of money on these loans prevented me from doing the infrastructure repair the agency's buildings desperately needed in order to stop the penalties and fines the City of Milwaukee levied on EU because these issues were not being dealt with. 

"The inability to pay for these repairs was the main reason tenants moved out of the building starting in 2012 and prevented me from asking for higher rent for this prime real estate. 

"In addition, when I first arrived in 2006 the City of Milwaukee was foreclosing on Esperanza Unida because of property taxes Oulahan did not pay. I managed to broker a deal with the city with the help of Alderman Jim Witkowiak to pay the city the taxes owed. We were successful in making that happen. It's to bad we have a gangster in the Alderman's office today, otherwise, I believe Manny Perez would have been able to broker an agreement with city officials had the current thug alderman sitting in office would have cooperated with him. 

"In closing, Georgia Pabst can only hide the the truth for so long. A truth that I will now bring forth. My silence in this matter ends today. The truth will come out about her friend Richard Oulahan, and many will be heartbroken to know that EU was not the efficiently run agency it's predecessors want many to believe," Miranda stated.