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Lawsuit likely after Glendale council reaffirms 'no' decision on Hilton rezoning

Hotel owners want site repurposed as lodging for Chinese students

Oct. 29, 2013

Glendale — A lawsuit between the owners of the Milwaukee River Hilton and the city of Glendale is likely after the Common Council on Monday reaffirmed its position that an international academy is not the best use of the site.

In September the council unanimously rejected a proposal from the Wisconsin International Academy to rezone the Hilton hotel and Anchorage Restaurant site, located at 4700 N. Port Washington Road, to allow WIA to repurpose the properties into lodging for Chinese students. The rezoning was again on the agenda Monday after a flood of new information regarding potential new buyers for the site, or lack thereof, as well a a potential lawsuit, became available to the council recently.

Yet, after voting down a suggestion from Mayor Jerome Tepper that the council hold over the decision until December in order to examine the new information at length, the council quickly and without further discussion delivered a unanimous vote to reaffirm its rejection of WIA's proposal.

"We voted previously, unanimously, to reject the zoning appeal," Alderman Richard Wiese said after the meeting. "That was judged to be in the best interest of the city, and we reaffirmed that (tonight)."

Lawsuit likely

But the decision doesn't sit well with the owners of the Hilton, who are threatening to sue the city for what they describe as an "arbitrary and capricious" denial of the zoning change, one that may cost them the difference between the $8 million WIA had offered for the hotel and whatever they may get for the property now that it will have to remain a hotel.

At an August meeting, a hotel real estate broker testifying before the council estimated the market value of the hotel to be approximately $6 million.

"We'll pursue damages we're entitled to for having to sell our property at a greatly diminished price," said attorney Barry Chaet, who represents the owners.

City attorney John Fuchs was unavailable for comment Tuesday.

New information surfaces

The reconsideration of the zoning change Monday was largely precipitated by a number of exchanges recently between Fuchs, attorneys representing the Hilton owners, the Common Council, Glendale Chamber of Commerce President Dale Schmidt, and potential buyers of the Hilton property.

In an email, hotel owner Robert Eckerman takes Schmidt to task for suggesting in September that he had a potential buyer — a suggestion Eckerman argues influenced the council's decision and in effect killed the sale with WIA. Eckerman writes that he spoke with the company to whom Schmidt had been referring and concluded: "Dale Schmidt's 'buyer' does not exist."

He further criticizes a potential buyer whom real estate broker and former Glendale mayor Jay Hintze has brought to the table, questioning his ability to finance the project.

At the meeting, Hintze argued that his buyer is legitimate.

"I would love the opportunity to discuss his financial backing and the (hotel chain) he has with him," Hintze said. "This man has every qualification in moving forward."

Schmidt, too, wrote in a report to the council that he has three new potential buyers, though he did not offer specifics. He said in an interview before the meeting that the council needed to make a final decision on the WIA proposal.

"Nothing can occur until this indecisiveness is removed," Schmidt said. "That makes people hold back. Buyers don't sit around in this market. They move on."

WIA focused elsewhere

After the meeting WIA Principal Matthew Gibson reaffirmed his position that the Hilton/Anchorage site was the only viable option within the city of Glendale, and that he is now looking elsewhere in the state. WIA currently leases two floors at the Glendale Baymont Inn to house international students who attend nearby schools.

He said that the council's decision in September caused WIA to miss its timeline of opening a new facility by the beginning of the current school year, and the company now plans to find a permanent site "as soon as possible."

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