U.S. Black Spruce Enter. Grp., Inc. v. City of Milwaukee, Appeal No. 2020AP1113

CourtCourt of Appeals of Wisconsin
Writing for the CourtDUGAN, J.
Parties U.S. BLACK SPRUCE ENTERPRISE GROUP, INC., Plaintiff-Appellant, v. CITY OF MILWAUKEE, Defendant-Respondent.
Docket NumberAppeal No. 2020AP1113
Decision Date15 March 2022

401 Wis.2d 421
973 N.W.2d 804
2022 WI App 15

U.S. BLACK SPRUCE ENTERPRISE GROUP, INC., Plaintiff-Appellant,
v.
CITY OF MILWAUKEE, Defendant-Respondent.

Appeal No. 2020AP1113

Court of Appeals of Wisconsin.

Submitted on Briefs: May 13, 2021
Opinion Filed: March 15, 2022


On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Mark F. Foley and Matthew J. Thome of von Briesen & Roper, S.C., in Milwaukee.

On behalf of the defendant-respondent, the cause was submitted on the brief of Tearman Spencer and Nicole F. Larsen of the City of Milwaukee Attorney's Office, in Milwaukee.

Before Donald, P.J., Dugan and White, JJ.

DUGAN, J.

973 N.W.2d 806
401 Wis.2d 423

¶1 U.S. Black Spruce Enterprise Group, Inc. (Black Spruce) appeals the order of the circuit court upholding three raze orders issued by the City of Milwaukee, Department of Neighborhood Services (the City) on April 11, 2019.

¶2 On appeal, Black Spruce argues that the City's raze orders are unreasonable because the City did not meet the requirements of WIS. STAT. § 66.0413 (2019-20),1 for issuing the raze orders. Black Spruce contends that the buildings have never caused injury to anyone and, therefore, cannot be deemed unsafe under the raze order statute. Black Spruce also argues

401 Wis.2d 424

that the City has not shown that the cost of repairs to each building exceeds 50% of each building's assessed value. It argues that the proper standard in calculating the cost of repair is the cost of making each building safe for use as a vacant, unoccupied building that is closed to the public. It then asserts that the City applied a standard of calculating the costs of repair based on the buildings’ intended use as developed buildings open to the public rather than as vacant buildings.

¶3 Additionally, Black Spruce argues that the raze orders are unreasonable because it rebutted the presumption that the cost to repair each building was unreasonable and that the City acted in bad faith when it issued the three raze orders. In the alternative, Black Spruce argues that the City's raze orders should be modified to direct that Black Spruce be required to secure the buildings until Black Spruce is able to redevelop them.

¶4 The City argues that the orders issued in this case are reasonable because Black Spruce's buildings are so old, dilapidated, and out of repair that they are consequently dangerous, unsafe, unsanitary, and unreasonable to repair. It further argues that pursuant to the Milwaukee Code of Ordinances (MCO) § 218-4 (2017), and WIS. STAT. § 66.0413, Black Spruce's buildings are public nuisances and must be razed. The City asserts that it has shown that it is unreasonable to repair the buildings because the costs of repairing the buildings exceeds 50% of each building's assessed value.

¶5 We conclude that in rendering its decision the circuit court improperly based its findings on the cost to repair the buildings to make them compliant with code requirements for developed buildings open to

401 Wis.2d 425

the public when their current intended uses are as vacant, unoccupied buildings that are closed to the public. Accordingly, we are unable to determine the reasonableness of the raze orders. We reverse the circuit court's order and remand for the circuit court to apply the appropriate standard in calculating the cost to repair and reinstate any restraining orders applicable to these three raze orders or issue any relevant restraining orders consistent with this decision and consistent with WIS. STAT. § 66.0413.2 Consequently, we do not address the remaining arguments.

973 N.W.2d 807

BACKGROUND

¶6 Black Spruce owns 9101 and 9009 North Granville Station Road and 8221 West Northridge Mall Road, Milwaukee. The buildings are part of what is known as the former Northridge Mall (the Mall), and the buildings consist of the former JC Penney store, the Yonkers store, the food court, and various other stores.3 The Mall was closed in 2003, and Black Spruce, by its predecessor U.S. Toward Enterprise Group, Inc. came to own the buildings in 2008.

¶7 Another portion of the Mall—the former Boston Store—is currently owned by the City. That portion of the Mall was previously owned by Penzey's Spices until Penzey's donated this portion of the Mall to the City in 2018, after Penzey's was unable to secure

401 Wis.2d 426

ownership of the buildings owned by Black Spruce. Since the City has owned the Boston Store building, it has inspected the Mall in order to understand the building, how it connects to the remainder of the Mall, and how the City could potentially accomplish razing the Boston Store building.

¶8 The City issued three orders on April 11, 2019, pursuant to MCO § 218-4, to have the Black Spruce buildings razed. Each order provided that the buildings were to be razed because the buildings were vandalized, dilapidated, and out of repair; the cost to repair the buildings exceeded 50% of the value of the buildings and therefore, the cost to repair the buildings was presumed to be unreasonable; and the buildings were unsafe as defined in MCO § 200-11 and, therefore, public nuisances. Each raze order stated, "The building must be maintained vacant and secure from entry until you have complied with this order."

¶9 Black Spruce appealed the orders to the City of Milwaukee Standards and Appeals Commission (the Commission). In its decision, the circuit court stated that the Commission affirmed the raze orders based on MCO § 218-4-2-b. That ordinance provides:

If the commissioner determines that the cost of such repairs would exceed 50 percent of the assessed value of such building divided by the ratio of the assessed value to the recommended value as last published by the Wisconsin department of revenue for the city of Milwaukee,[4 ] such repairs shall be presumed unreasonable and it shall be presumed for the purposes of this section that the building is a public nuisance.
401 Wis.2d 427

Black Spruce then filed a petition with the circuit court pursuant to WIS. STAT. § 66.0413(1)(h), seeking to enjoin the raze orders.5

¶10 In order to make the buildings secure until the resolution of these proceedings, the parties signed a stipulation for interim measures to be taken by Black

973 N.W.2d 808

Spruce to secure the buildings. The conditions of the stipulation stated:

2. Black Spruce shall contract to provide active, on-site, professional security monitoring of the subject properties twenty-four hours per day, 7 days a week. The service will keep logs on on-site activity and provide those to the City on a weekly basis.

3. Black Spruce shall repair and restore all fencing around the entire perimeter of its premises and shall place or replace "No Trespassing" signs at each entry point and at a frequency of not more than 30’ between signs where such fencing exists.

4. Black Spruce shall execute the "No Trespass" form for the Milwaukee Police Department ("MPD"), which acts as an agreement to cooperate with the MPD in the prosecution of individuals caught trespassing on and in the properties.

5. Black Spruce shall remove all litter, debris, excess brush, etc. currently on the premises and, if new
401 Wis.2d 428
litter/debris/dumped materials appears, remove the same within two business days of such materials being reported to Black Spruce's local property manager. Black Spruce shall provide disposition reports for removed materials to ensure proper disposal. Black Spruce shall remove large growths that provide cover for persons trying to break into the buildings at the doors.

6. The City and Black Spruce shall conduct a joint interior and exterior inspection of the buildings to identify access points to the buildings and measures to adequately secure them. The participants will include but are not necessarily limited to the company Black Spruce engages for security services, City of Milwaukee Department of Neighborhood Services, Milwaukee Police Department, and Milwaukee Fire Department.

¶11 The matter proceeded to an evidentiary hearing. At the hearing, the City presented testimony regarding the condition of the Black Spruce buildings and the cost to repair those buildings. In particular, the City presented the testimony of Inspector Tim Bolger, who testified regarding the condition of the Black Spruce buildings, the cost to repair the buildings, and how the cost to repair the buildings was calculated.6 The City also presented the testimony of

401 Wis.2d 429

Inspector Chris Kraco, who testified regarding the condition of the buildings, to the presence of asbestos and other environmental hazards in the buildings, and the condemnation process.7

¶12 Benjamin Timm, a project manager employed by the City, also testified regarding the...

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