5 Investigates: Recycled Buildings

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Julie Blohm has been dealing with a controversial piece of property right outside her house in New London for several years now. 

“It’s horrible. To us it’s just a toxic piece of land right now,” said Blohm

A factory that employed more than 200 people – building high-end baby furniture, is now a vacant building and deemed a public nuisance.

“[He] made his money and left everybody with a huge expense, a huge mess,” Blohm added.

“The weeds, the dead trees, the falling glass, and a building that’s falling apart. I mean come on, let’s make the guy accountable,” said Julie’s husband, John. 

That guy is Eric Spirtas, president of Wisconsin-based Niagara Worldwide – a company that redevelops properties all over the country. Spirtas bought the New London property back in 2005 and had plans to redevelop the land into something useful.

“But in the long run what happened was a salvage operation occurred,” said New London city administrator, Kent Hager. “He tore out the valuable items on the property and sold them and left a substantial pile of wreckage.”

Hager says that after a period of time and several instances in court, the city was forced to hire a contractor to clean up the site. However, in the process, the contractor ground up asbestos roofing material – a clean up that cost the city about $200,000. Spirtas told Local 5 he pleaded to the city not to take control.

“[I said] please don’t take over the demolition. I have wood that’s available, I have materials that are segregated, I have demolition to take place, and I had demolition going on. But they seized it, they took it over. And for the cost that they took it over, they contaminated the site. Once it was clean and we got a No Further Action letter from the state, I got charged $250,000  for all that, and they put that on the taxes – so I ended up getting charged for the contracting mistake. You cant do much developing once property is damaged,” Spirtas explained. 

The DNR checked the property for asbestos and the case went all the way to the Department of Justice, where it declared the property asbestos-free. 

“We are absolved of any issue that’s left to the property regarding the asbestos contamination that was left there by the contractor,” Hager said. 

Spirtas says the battles in New London just slowed the process. 

“They did what they did and unfortunately their actions slowed the project down another five years,” he said.

The pace of the project is similar to another here in northeast Wisconsin. The Mirro Company left Manitowoc in 2002, and Mayor Justin Nickles said several developers owned the building before Spirtas bought it with plans to renovate the building for apartments and condos. Manitowoc’s journey may sound familiar.

“Copper pipes, a lot of wood floors, bricks, a lot of valuable things had been taken out from 2002 until we finally tore it down,” Nickles said.

Three years ago, Spirtas told Local 5 progress would be made on the building relatively quick. 

“I can tell you in the next several weeks, you will have the three-story building gone and you will have a nice, open area in there that we can work and we can plan the next phase of construction and demolition,” Spirtas said back in 2014.

“We saw some progress so we backed off,” said Nickles. “But in us backing off, things were pushed back year, after year, after year, after year. That’s when we just bit the bullet and said, ‘no more.'”

Earlier this year, Manitowoc was about to condemn the property when Spirtas donated it to the city, who then began demolition. However, it cost taxpayers about $2.4 million to level the building. 

“The city has to determine ‘is it in the public’s best interest to push hard enough to where the owner could leave, when the owner is telling us they want to do stuff, or will do stuff – or push forward with condemnation?'” Nickles said. 

“In Manitowoc, we spent $1.5 million. I couldn’t have spent another dollar until I finally had to donate the property because I couldn’t put another dollar in to take it – so I moved on,” Spirtas explained.

And a similar situation in Brokaw at the Wausau Paper Mill. The mill closed down in 2012 leaving 450 people out of work. Spirtas also bought up the property, but sold it just months after purchasing it.

“The town tried to block the sale of Wausau Paper to a developer,” said Spirtas. “They didn’t do that, but what they did was they blocked my sale of the property to anyone else. So I did work through that and I got in sold in 11 months to the next user.”

 Village president Jeffery Weisenberger says he received advice from Mayor Nickles about Spirtas owning the property

“[Nickles] told me that this guy would come in and promise you the world and he’ll never see any of it, but by the time he’s done and gone with the building – you won’t even be able to turn on a light bulb,” said Weisenberger.

“I’m a property owner that can own, manage, maintain and hold the property until such time when it can be demolished or transitioned,” Spirtas explained. “If a city moves forward and they want to seize the property for cause or for reason, they have to deal with it responsibly.”

Spirtas maintains that these communities would see progress if they were patient. Local 5 asked Spirtas if the communities had stuck with him and his plan, eventually they would be saving the money they spent on demolition costs, etc. His response was, “absolutely.”

“They didn’t do business with me in New London, or in Manitowoc, or in Brokaw – I had to do the business on my own,” he said. 

Spirtas says this is based off other properties he’s transformed across the country on a larger scale. 

“Up east at the power plant, I have another property in New York, I sold off four of the five components and it took ten years. Development is not a fast business,” he explained. “These are two similar stories [New London and Manitowoc] that there’s just not enough economic development dollars, or economic activity to take it to the next level.”

Mayor Nickles says his city learned a lesson and created an ordinance that any building over 100-thousand square feet in the city that has been remodeled, or needs to be demolished – has to go through the common council’s approval before the developer gets a building permit. This is something that was not implemented in the past.

“The reason for that is we don’t want people going in and stripping these large buildings just for what they’re worth,” Nickles said. “Their copper, their wood, whatever – and then leave an empty shell, which we ended up with.”

Nickles encourages other communities to be more involved with the entire process.

“We’re seeing more and more in Manitowoc and in other places – people, LLC’s especially – coming in, purchasing the building for cheap, and stripping them for what they’re worth. Cities need to get more involved and aggressive with these types of businesses that come in and do this,” he said.

5-Investigates found that just two weeks ago, Spirtas sold all of the property in New London to a new developer. He says he’s confident that it’s in the right hands and it will move forward.The residents and city leaders of New London hope it’s not just another empty promise.

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