UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN MILWAUKEE DIVISION

Transcription

1 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, 7510 W. Kangaroo Lake Road Baileys Harbor, WI 54202, MARQUETTE DISTRIBUTION CENTER LLC 7510 W. Kangaroo Lake Road Baileys Harbor, WI 54202, URBAN SUSTAINABLE AQUAPONICS, LLC 900 Water Street Racine, WI 53403, File No. RIVERSIDE BUSINESS CENTER, LLC 7510 W. Kangaroo Lake Road Baileys Harbor, WI 54202, SAM AZARIAN & SONS MARINA, INC High Street Racine, WI 53404, AZAR, LLC 1535 High Street Racine, WI 53404, AZARIAN WRECKING, LLC 1535 High Street Racine, WI 53404, and Page 1 Case 2:17-cv NJ Filed 12/30/17 Page 1 of 30 Document 2

2 RAZA OF RACINE LLC 1535 High Street Racine, WI 53404, vs. Plaintiffs, CITY OF RACINE 730 Washington Avenue Racine, WI 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 Page 2 Case 2:17-cv NJ Filed 12/30/17 Page 2 of 30 Document 2

3 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 et seq., (the Uniform Act ), regulations thereunder at 49 C.F.R. 24, et seq.; (b) procedural deficiency claims under Wis. Stats ; (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 That this Court has supplemental jurisdiction for the state claims asserted herein under 28 U.S.C 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. Page 3 Case 2:17-cv NJ Filed 12/30/17 Page 3 of 30 Document 2

4 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 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 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 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 Page 4 Case 2:17-cv NJ Filed 12/30/17 Page 4 of 30 Document 2

5 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 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 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 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 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. Page 5 Case 2:17-cv NJ Filed 12/30/17 Page 5 of 30 Document 2

6 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 (3). 18. That the RDA has the power to condemn, as defined within Wis. Stats (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 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 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 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. Page 6 Case 2:17-cv NJ Filed 12/30/17 Page 6 of 30 Document 2

7 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 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 : Water St Marquette St. Page 7 Case 2:17-cv NJ Filed 12/30/17 Page 7 of 30 Document 2

8 - 526 Marquette St. 33. That MARINA owned the real property located at the following locations: th Street, Racine, Wisconsin Water Street, Racine, Wisconsin Water Street, Racine, Wisconsin Water Street, Racine, Wisconsin 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. Page 8 Case 2:17-cv NJ Filed 12/30/17 Page 8 of 30 Document 2

9 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, mixed-use redevelopment spread over a 20-acre parcel which was proposed to be the CITY s largest redevelopment project ever. Page 9 Case 2:17-cv NJ Filed 12/30/17 Page 9 of 30 Document 2

10 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 #NA11N0S (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, 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, 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. Page 10 Case 2:17-cv NJ Filed 12/30/17 Page 10 of 30 Document 2

11 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, 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, 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. Page 11 Case 2:17-cv NJ Filed 12/30/17 Page 11 of 30 Document 2

12 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, 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, 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. Page 12 Case 2:17-cv NJ Filed 12/30/17 Page 12 of 30 Document 2

13 and the MARINA PROPERTIES and AZAR PROPERTIES in the total sum of $4,500, (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. Page 13 Case 2:17-cv NJ Filed 12/30/17 Page 13 of 30 Document 2

14 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. Page 14 Case 2:17-cv NJ Filed 12/30/17 Page 14 of 30 Document 2

15 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, 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, and for 615 MARQUETTE ST. by $500, 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.: Page 15 Case 2:17-cv NJ Filed 12/30/17 Page 15 of 30 Document 2

16 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. Page 16 Case 2:17-cv NJ Filed 12/30/17 Page 16 of 30 Document 2

17 100. That, upon information and belief, SPANGENBERG and SADOWSKI were, or should have been aware that RIM was a business tenant at 526 MARQUETTE ST. when the RDA acquired the same That, upon information and belief, SPANGENBERG and SADOWSKI were, or should have been aware that MDC was a business tenant at 615 MARQUETTE ST. when the RDA acquired the same That, upon information and belief, SPANGENBERG and SADOWSKI were, or should have been aware that USA was a business tenant at 615 MARQUETTE ST. when the RDA acquired the same That the RDA and CITY, via its agents, forced MARQUETTE WAREHOUSE to remove from the 526 MARQUETTE ST. on or about May 15, That the RDA and CITY, via its agents, forced RIM to remove from the 526 MARQUETTE on or about May 15, That the RDA closed on the acquisition of 615 MARQUETTE ST on December 30, That the RDA did not make the last payment due and owing to OLSON, for the sale of 615 MARQUETTE ST. until February 5, 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 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. Page 17 Case 2:17-cv NJ Filed 12/30/17 Page 17 of 30 Document 2

18 109. 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 and Wis. Adm. Code ADM 92.26, the RDA was required to submit a relocation plan prior to displacing any tenants That, at no time, has the RDA completed a relocation plan as mandated 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 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 ) That the MOUND AVE. PROPERTIES were being acquired by the CITY, with the CITY acting as the RDA s agent That the MOUND AVE. PROPERTIES were being acquired under the RootWorks Plan. Page 18 Case 2:17-cv NJ Filed 12/30/17 Page 18 of 30 Document 2

19 117. That SADOWSKI prepared a relocation plan for the MOUND AVE. PROPERTIES (hereinafter the Mound Ave. Relocation Plan ) That the RDA and SPANGENBERG approved the Mound Ave. Relocation Plan on May 19, That the CITY approved the Mound Ave. Relocation Plan on May 20, That SADOWSKI, as agent for the CITY and RDA, submitted the Mound Ave. Relocation Plan to the DOA on July 28, 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 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 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 That the RDA, SPANGENBERG and SADOWSKI either intentionally or negligently failed to file a relocation plan for the Subject Area Properties, owners and tenants 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 ). Page 19 Case 2:17-cv NJ Filed 12/30/17 Page 19 of 30 Document 2

20 126. 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 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, filed by MARQUETTE WAREHOUSE (hereinafter Claim 2 ) attached as Exhibit D. c. October 9, 2017 Claim for $181, by MARQUETTE WAREHOUSE (hereinafter Claim 3 ) attached as Exhibit E. d. November 6, 2017 Claim for $121, by MDC (hereinafter Claim 4 ) attached as Exhibit F. e. September 25, 2017 Claim for $15, by MDC (hereinafter Claim 5 ) attached as Exhibit G. f. November 6, 2017 Claim for $491, by USA (hereinafter Claim 6 ) attached as Exhibit H That despite the determination by the DOA in June 2017, the RDA only first considered the above referenced claims on December 7, That the RDA has denied all but portions of two claims submitted by OLSON via written determination on December 15, 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. Page 20 Case 2:17-cv NJ Filed 12/30/17 Page 20 of 30 Document 2

21 131. 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 That AZARIAN MARINA is a displaced business pursuant to Wis. Stats. Ch. 32 and the Uniform Act. Act That AZAR is a displaced business pursuant to Wis. Stats. Ch. 32 and the Uniform 135. That AZARIAN WRECKING is a displaced tenant pursuant to Wis. Stats. Ch. 32 and the Uniform Act. Act That RAZA is a displaced tenant pursuant to Wis. Stats. Ch. 32 and the Uniform 137. That AZARIAN WRECKING and RAZA occupied the MARINA PROPERTIES and AZAR PROPERTIES under an agreement by and between the parties 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 ) 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 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 21 Case 2:17-cv NJ Filed 12/30/17 Page 21 of 30 Document 2

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. 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 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 That Defendants were required to comply with the Uniform Act and the regulations thereunder in connection with the acquisition of the Subject Area Properties 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 and paying certain expenses incidental to the transfer of title to it under 49 C.F.R That the acquisition of Plaintiffs property by Defendants did not qualify as a voluntary transaction within the meaning of 49 C.F.R (b). Page 22 Case 2:17-cv NJ Filed 12/30/17 Page 22 of 30 Document 2

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 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 That Defendants failure to follow the Uniform Act resulted in the Plaintiff property owners not receiving just compensation for the properties acquired 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 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 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 Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under this count That Defendants have the power to condemn real property pursuant to Wis. Stats (1) and (11) and are defined as a condemnor under Wis. Stats That Defendants were required to comply with Wis. Stats in connection with the acquisition of the Subject Area Properties. Page 23 Case 2:17-cv NJ Filed 12/30/17 Page 23 of 30 Document 2

24 156. That Defendants have specific duties under Wis. Stats , 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 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 That Plaintiffs have suffered, and will continue to suffer, damages as a direct result of Defendants failure to comply with the Wis. Stats , 32.19, and That Plaintiff OLSON has not been fully compensated for his relocation claims pursuant to Wis. Stats. Ch Plaintiffs MARINA, AZAR, AZARIAN WRECKING, and RAZA have not been fully compensated for any relocation costs pursuant to Wis. Stats. Ch 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 162. Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under this count That pursuant to Wis. Stat 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 That despite notice from the DOA, the CITY and RDA have failed to provide the Plaintiffs with any relocation plan. Page 24 Case 2:17-cv NJ Filed 12/30/17 Page 24 of 30 Document 2

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 That the RDA is duly bound by Wis. Stat. Ch. 32 and Wis. Adm. Code ADM Ch. 92 to process relocation claims 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 That the delay in processing and receiving relocation benefits has and continues to cause substantial economic loss to the Plaintiffs That Wis. Adm. Code ADM requires that displaced persons are treated uniformly, fairly and equitably 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. count 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 172. Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under this 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 25 Case 2:17-cv NJ Filed 12/30/17 Page 25 of 30 Document 2

26 their property That Defendants have not provided just compensation to Plaintiffs for the taking of 175. That Plaintiffs have suffered, and will continue to suffer, damages as a direct result of Defendants failure to comply with the Fifth Amendment of the United States Constitution and Article 1 13 to the Wisconsin Constitution. count. COUNT V VIOLATION OF THE FOURTEENTH AMENDMENT TO THE UNITED STATES CONSTITUTION AND ARTICLE 1 1 TO THE WISCONSIN CONSTITUTION 176. Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under this 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 That Plaintiffs were denied relocation assistance and benefits while other similarlysituated 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) That despite providing Plaintiffs no relocation assistance, benefits, or just compensation, Defendants provided relocation assistance and just compensation to others. Page 26 Case 2:17-cv NJ Filed 12/30/17 Page 26 of 30 Document 2

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 That Plaintiffs have suffered, and will continue to suffer, damages as a direct result 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 Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under this count 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 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 That Article 1 1 to the Wisconsin Constitution guarantees equal protection of the laws 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 27 Case 2:17-cv NJ Filed 12/30/17 Page 27 of 30 Document 2

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 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 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 That Plaintiffs have suffered, and will continue to suffer, damages as a direct result of Defendants failure to comply with 42 U.S.C count. COUNT VII CONSPIRACY TO INTERFERE WITH CIVIL RIGHTS IN VIOLATION OF 42 U.S.C. 1985(3) 190. Plaintiffs incorporate all paragraphs of this Complaint as if fully set forth under this 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 That Plaintiffs have suffered, and will continue to suffer, damages as a direct result of Defendants conspiracy to interfere with Plaintiffs civil rights contrary to 42 U.S.C. 1985(3). Page 28 Case 2:17-cv NJ Filed 12/30/17 Page 28 of 30 Document 2

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 , 42 U.S.C. 1988, Wis. Stats , 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 29 Case 2:17-cv NJ Filed 12/30/17 Page 29 of 30 Document 2

30 Dated this 29 th day of December, GUTTORMSEN & TERRY, LLC, Attorneys for the Plaintiffs By: Todd A. Terry, Attorney at Law State Bar Number: DRAFTED BY: Todd A. Terry, Attorney at Law SBN: th Street, Suite H Kenosha, WI Telephone: (262) Facsimile: (262) todd@gt-attorneys.com Page 30 Case 2:17-cv NJ Filed 12/30/17 Page 30 of 30 Document 2