Aldermen accuse Schmitt of wrongdoing

Green Bay aldermen, Guy Zima, Chris Wery, Andy Nicholson, Mark Steuer and City Council President Tom DeWane called a  news conference,  accusing Mayor Jim Schmitt of crimes in his handling of the Hotel Northland project, October 30, 2017. (WLUK/Andy Harbath)

GREEN BAY (WLUK) -- Five Green Bay aldermen are calling for a new criminal investigation into Mayor Jim Schmitt and city staff's handling of the Hotel Northland project.

Alderman Guy Zima is the leader of the group of council members accusing Schmitt of mishandling millions of dollars. The aldermen held a news conference Monday afternoon at the Brown County Courthouse.

Watch the full news conference below:

Schmitt is maintaining he did nothing wrong and says an investigation would be a waste of taxpayer money.

“It has been thoroughly vetted every step of the way,” Schmitt said of the Northland project.

The aldermen have sent a stack of documents to Brown County District Attorney David Lasee's office. They want Lasee to see if Schmitt committed any crimes and whether the money meant for the Northland was used appropriately.

Lasee tells FOX 11 he has received the information, but wouldn't say whether he plans to open any sort of investigation.

City Council President Tom DeWane and Aldermen Chris Wery, Andy Nicholson, and Mark Steuer join Zima in accusing Schmitt of committing perjury, intent to deceive, fraud, and violation of public trust.

The group says Schmitt diverted $3.2 million in public funds, creating loan defaults in the Hotel Northland project.

“That's where I have a very difficult time that the monies were diverted,” said Steuer.

The council members say court documents and loan agreements prove Schmitt helped divert the millions of dollars into an account for Northland owner Keith Harenda, breaking an agreement with the project's top lender.

“I mean its inexplicable,” said Zima. “Why, when you have a loan with one bank, would you send the money to another bank?”

“We follow the rules,” said Schmitt. “It's just a crazy accusation by some mean-spirited obstructionists.”

The aldermen also accuse Schmitt of lying to the council and the Redevelopment Authority. Schmitt requested a $500,000 loan to keep the project moving forward. However, the aldermen say court documents prove the money would have paid former owner, Mike Frantz, to walk away from the project.

“That money was going to keep the project going,” said Schmitt. “It was never going to Mike Frantz. Again, that's just conspiracy people that have other issues.”

The aldermen say they plan to be patient while the process plays out.

The Hotel Northland project has faced a series of financial problems since its lead lender pulled its $12.8 million loan late last year. Court documents show the bank accused the Northland’s owners of defaulting on their loan agreement.

Work on the project stalled for a few months after developers searched for money to finish the project and pay workers for work already completed.

A Brown County judge appointed a receiver to finish the project at the beginning of this month. Mayor Schmitt has said work will resume on the hotel in November, with the hotel opening next summer.

Mayor Schmitt responded to the allegations with the following statement:

City attorney, Vanessa Chavez also released a statement:

Economic Development Director Kevin Vonck provided the following statement on the accusations:

I am appalled at the accusations lobbied by a number of Alderpersons this afternoon regarding the actions of the Mayor, City Attorney Vanessa Chavez, and myself regarding the Hotel Northland project.

Every decision our team has made has been with the best interest of the City in mind; no preference has ever been given to any developer, financial institution, or elected official. We have been straightforward and honest with the Redevelopment Authority, the Council, and the public in our statements.

This project has been a challenge to keep moving forward, especially when several of the same Alderpersons have privately worked against the recommendations of City staff. I appreciate the decision of our Council to support the receivership, which will allow construction to resume in the coming weeks and produce a fully-functional, operating hotel in 2018.

I understand I work in the public realm, and will fully cooperate with any investigation. In the meantime, I will continue to work on innovative, dynamic development projects that help the City reach its full potential.

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