Main Street Waunakee

Shown was one of the iterations of a proposal for the 200 block of West Second Street.

The Village of Waunakee could face a second lawsuit over the denied rezone request for Main Street Waunakee LLC’s proposed apartment complex.

Terrence Wall, manager for the limited liability corporation, has told the Tribune that he may file another suit seeking costs incurred from what he alleges was “at the village’s encouragement to come to Waunakee to develop, along with loss of profit” unless the village comes to an agreement with the first suit.

Main Street Waunakee LLC last year sought to redevelop the 200 block of West Main and West Second Street into an apartment complex with some retail use, but the village’s plan commission and board of trustees denied the rezone, saying the proposal failed to comply with the comprehensive plan.

Alleging conflict of interest and bias, Main Street Waunakee had filed a notice of claim for more than $49 million in damages, which the village’s insurance company denied.

Afterwards, Main Street LLC filed a suit in Dane County Circuit Court against the Village of Waunakee, its plan commission and board of trustees asking the court to declare the decision on the rezone null and void, allowing Main Street Waunakee LLC to reapply with Village President Chris Zellner and Erin Moran recusing themselves; the suit does not seek monetary damages.

But Wall has indicated Main Street LLC could file another suit for damages unless the village agrees to settle the first.

“The village has the opportunity avoid a second lawsuit for significant damages if the village agrees to a settlement that provides the zoning we are entitled to and does so with Zellner and Moran recusing themselves,” Wall said in a letter to the Tribune.

“Otherwise, if a village president and board member, who broke the law, continue to refuse to do the right thing, as required by prior court precedents, costing taxpayers a lot of money, then we will file a second lawsuit against the village and Zellner and Moran that will be a claim for money damages – the costs we incurred at the village’s encouragement to come to Waunakee to develop, along with loss of profit,” Wall alleged.

So far, it seems Waunakee officials are unwilling to settle. Asked if Wall had contacted village officials or its attorney regarding the settlement, village officials offered this statement:

“A lawsuit has been filed by Main Street Waunakee LLC against the Village. The Village disputes the allegations and intends to aggressively defend this lawsuit. Upon advice of counsel, the village cannot comment at this time.”

Wall seems confident in the suit, telling the Tribune that prior court cases are clear in terms of public officials showing bias and making public statements opposing projects as Wall claims Zellner and Moran did about his development proposal.

“There’s a lot of video documentation of evidence that he was biased and he was out to sabotage a fair open hearing,” Wall said about Zellner.

Wall also asked if, Zellner, as village president, leading the defense of the lawsuit “in which he is to blame,” also presents a conflict of interest.

The allegations

The suit includes as exhibits two letters written in January 2018 to village officials requesting Zellner recuse himself. Main Street Waunakee’s manager, Terrence Wall, wrote to Village Administrator Todd Schmidt accusing Zellner of bias, attributing it “to the fact that his brother Brad Zellner (LZ Ventures) is now considering developing in the village as well.”

Dan Zellner of LZ Management, Brad Zellner’s son, had presented a plan to redevelop the American Legion Property into a senior citizen apartment complex. Legion members voted against that proposal in November.

The second letter to village attorney Bryan Kleinmaier was written by an attorney with Axley Brynelson, and includes comments Zellner allegedly made at a Jan. 4, 2018, listening session indicating his opposition for the development. The letter claims Zellner stated that he asks his brother’s opinion on development plans, noting Chris Zellner’s statements “constitute an impermissible prejudgment on the proposed T.Wall development.”

Chris Zellner did recuse himself from discussions and votes regarding any potential Tax Incremental Finance assistance for the LZ Management proposal at the Legion site.

The complaint states that Zellner had previously expressed initial support for the Main Street Waunakee development, and that Village Administrator Todd Schmidt encouraged the developer to pursue a project at the location, indicating the village “would rezone the property and approve a tax incremental Finance (‘TIF’) district because the Village had a particular interest in redeveloping the subject block.”

The suit also claims that Trustee Moran had a conflict of interest in regard to the Main Street Waunakee proposal because her parents own a house across the street from the site. It also states that Moran had made public statements opposing the development.

Main Street Waunakee LLC’s lawsuit can be found on the Tribune’s website at www.waunakee.com.

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