RACINE - Despite the recent collapse of the proposed Pointe Blue, city officials say they are in no rush to stir up another proposal for the site.
Pointe Blue was proposed by Milwaukee-based KeyBridge Development, headed by Racine native and former state legislator Scott Fergus. The project was to have been built on 19.6 acres comprised of Pugh Marina and the former Walker site, along Lake Michigan just north of the mouth of Root River.
Fergus estimated that the mix of 434 lake-front condominiums, 90 apartments, a marina, restaurants, stores and offices would have totaled $185 million to $220 million in market value.
On Jan. 10 all parties involved declared the project dead. The city still owns the former Walker site. And developers are still sniffing around, Mayor Gary Becker said.
Even in the past four weeks, Becker said, "We have had developers ask for information, and at least one has met with (Bill) Pugh."
One has mentioned a lake-front resort/hotel, he said, along with housing as a development idea. Becker said he has no idea what the best proposal will turn out to be. But it will likely depend on an acceptable purchase price for the Pugh land.
"My guess," Becker said, "is that, with the market the way it is, Pugh is trying to sort out what his property is worth."
"Pugh holds a large key part of this thing," Becker said. "And he will not maximize his site without ours."
Despite the outside interest, Becker said it doesn't make much sense to push development of the nine Walker acres without the land owned by Bill Pugh and his family.
"We both understand, Pugh and the city, that working together on this is the best for everyone," Becker said. "… I don't think he gets the (price) he wants without ours in the mix."
No one has publicly said how much KeyBridge was to pay Pugh for the land, but the price may have been too stiff, ultimately, for Pointe Blue to work.
"There was too much front-end cost for the market," Becker said. "If (the Walker site) was a perfectly clean piece of land and didn't need remediation and infrastructure, then the price on the Pugh piece probably wouldn't have been as big an obstacle."
Becker said the market will dictate what that price is, and said it's obvious the deal could not be financed with the price of the Pugh land and remediation costs. "I don't think we can lower the cost of remediation," Becker said
City Development Director Brian O'Connell echoed Becker's assessment that the Pugh land was too expensive, in the end, for the deal.
"There were a lot of front-end costs," he said. "And the biggest chunk of what they were going to pay was for the Pugh property."
At the start, the deal apparently looked solid to Fergus, O'Connell said, but conditions changed. One of the dominoes to fall from the foreclosure crisis was a tightening of credit. The price for the Pugh properties had a particularly back-breaking effect, he said.
Bill Pugh disagreed with the opinion that his property was overpriced.
"We had that price for three years," he said. "Initially, (Fergus) said, 'I'll get you that price.'
Pugh said Fergus gave him more than a million dollars, but couldn't complete the deal for his land.
"Because everyone else (lenders) kicked off on him," Pugh said.
Pugh said the land has been in his family for more than 100 years. "You get one chance to sell it. This is still a free economy," Pugh said.
He acknowledged that his property "may not be worth quite as much now. The highest and best use is not housing now. It's a marina."
In the meantime, it appears Fergus is in no position to come back at the Walker or entire Pointe Blue site. He is owner of First Place Milwaukee, a limited liability corporation that recently filed for receivership, according to the Milwaukee Journal-Sentinel.
According to the Journal Sentinel, using information obtained in the receivership filing, First Place owes nearly $59 million to a group of lenders and investors that helped finance the development of 115 condominiums in Milwaukee, a 12-story project called First Place on the River. It sits where the Milwaukee and Menomonee rivers meet.
Under receivership, which is essentially the Wisconsin version of a federal bankruptcy, the court will appoint someone to help creditors recoup part of their investments.