Jeramey Jannene
Plats and Parcels

Asian Market Expansion In Jeopardy

Facing multiple lawsuits and criminal probe of a VP. Plus: All the week's real estate news.

By - Mar 27th, 2022 04:40 pm
5XEN Super Asian Market. Photo by Jeramey Jannene.

5XEN Super Asian Market. Photo by Jeramey Jannene.

In less than two years, 5XEN Super Asian Market has gone from proposed $20 million expansion to potential foreclosure. A criminal investigation also now hangs over one of the key executives of market owner 5XEN Inc.

The marketplace has a variety of vendors ranging from a full-service grocery store to farmers-market-style tenants. In between are restaurants, small retailers and office tenants.

The city approved a zoning change in 2020 that would allow a three-story, 44,000-square-foot addition to the 71,000-square-foot building at 6300 N. 76th St. The market’s original building, a 14,000-square-foot structure, would be demolished to create more parking space.

The expansion was to be completed in 2021. But things have gone sideways since the approval.

There are now two pending lawsuits for unpaid bills and vice president Kay Yang faces a civil lawsuit for allegedly misappropriating unrelated investment funds and is subject to a federal investigation for money laundering and wire fraud.

Byline Bank has a $3.45 million foreclosure suit pending that stems from a 2014 construction loan to build the 71,000-square-foot building. A scheduling conference is slated for May 6.

The City of Milwaukee has also initiated a small claims case against 5XEN for an older, unpaid property tax balance of $6,701.39 on one of the properties merged into the now single-parcel property. The first hearing is scheduled for April 12.

The 2021 tax bill on the now-combined property, 6270-6300 N. 76th St., is also outstanding with an amount due of $131,014.62, but the city has not yet pursued the balance in court. It could ultimately initiate a property tax foreclosure case against the company.

5XEN Inc. acquired the market, formerly Phongsavan Asian Market, in April 2020 from founder Pai Yang. The first iteration of the market opened in 2009. In its current form, it caters to Milwaukee’s Hmong community, but multiple trips to the market have revealed a diverse customer base.

A 5XEN business structure provided to the city as part of the 2020 zoning change request lists Moualee Thao as CEO and Kay Vang as vice president, the second listed position.

Yang’s Legal Issues

Kay Yang now faces a series of legal issues related to her role as an unregistered investment advisor.

The Wisconsin Department of Financial Institutions, in 2020, ordered her to pay approximately $17 million in restitution to investors and a $50,000 civil penalty for serving as an unregistered investment advisor and selling foreign currency investments. She would be able to keep $4.3 million in commissions if she completes the restitution payments.

But a group of seven investors is now alleging she has failed to make those payments. They sued Yang, a Mequon resident, in Ozaukee County Circuit court in February.

Yang also faces a criminal investigation. A search warrant was served earlier this month.

Federal investigators are accusing Yang of running a Ponzi scheme. Commonly associated with Bernie Madoff, the scheme relies on continually attracting new investments to pay off earlier investors while siphoning off some of the money. Yang is believed to have done some legitimate foreign currency trading, losing $11 million on $12 million investment, but also to have siphoned off millions of dollars.

Between 2016 and 2020, Yang and her husband Chao Yang made more than 300 visits to Potawatomi Hotel and Casino, spending $10.7 million on slot machines according to a federal court filing. Investigators say the couple lost $854,242. Additional funds were spent on luxury travel, ATM withdrawals at Las Vegas casinos, purchasing two homes, tuition and a Tesla vehicle.

Yang has defended herself by invoking comparisons to a past president. “Donald Trump filed bankruptcy six times. He became President of the United States of America. Most loved president of all time,” said Kay Yang to reporter Tom Daykin via email in early February. Daykin has effectively made a 5XEN beat for himself, covering each twist and turn in the expansion effort and subsequent fallout.


Weekly Recap

World’s Tallest Timber Building Nears Completion

The tallest mass timber building in the world doesn’t look the part anymore. Ascent, the 25-story luxury apartment building, is now entirely enclosed in glass, shrouding the timber structure. It’s a significant step as New Land Enterprises gets ready to open the $128.2 million building this summer.

But anyone that steps foot in any of the 259 apartments will find it unlike any other building in the city, and few others that are similar in the world. Ascent, 700 E. Kilbourn Ave., will be a high rise with exposed mass timber in every unit.

“It’s warmer, more beautiful, it just feels good,” said New Land managing director Tim Gokhman of the apartment’s interior aesthetics during a July tour of the partially completed building. Wherever possible, the mass timber will be exposed in the walls and ceilings. A wood-grain-finish floor will be installed atop a radiant heating system and insulation layer, accenting the White Spruce mass timber.

Read the full article

Elmer Moore Tapped To Lead WHEDA

Elmer Moore Jr. will serve as the next leader of the Wisconsin Housing and Economic Development Authority (WHEDA).

Moore, who currently leads Scale Up Milwaukee, will serve as head of Wisconsin’s largest affordable housing program, the low-income housing tax credit program, and director of a number of other economic development and housing support programs. The state agency has approximately 160 employees and $3 billion in assets.

Governor Tony Evers announced the appointment Friday. Moore’s first day is April 11.

“I’m thrilled to have Elmer Moore join our administration to serve in this important role. His background in business development, job creation, strategic partnerships, and community engagement will be critical to ensuring that WHEDA’s commitment to housing equity and economic opportunity remains strong throughout our great state,” said Evers in a statement.

Read the full article

HUD Sues East Side Landlord For Discrimination

The owner of two Lower East Side rental properties and his property manager are being sued for housing discrimination by the U.S. Department of Housing and Urban Development.

A complaint, released Thursday, accuses property manager Dennis Parker, Leaf Property Investments and its registered agent Sam Leaf of violating the Fair Housing Act-protected rights of a tenant on the bases of sex and disability.

The complainant, a gay male with an intellectual disability, was allegedly repeatedly propositioned for sex by Parker, subjected to repeated homophobic remarks from Parker, subjected to retaliation for calling the Milwaukee Police Department about Parker’s behavior and ultimately subjected to eviction actions with Leaf’s involvement.

HUD’s filing, which relies heavily on text messages between Parker and the complainant, details an escalating series of interactions between the property manager and resident that culminate in a physical attack and the complainant moving out.

Read the full article

City Closing Three TIF Districts

The City of Milwaukee is closing three tax incremental financing (TIF) districts used to spur real estate development, though only one has performed as expected.

The three districts to be closed include a 66-acre N. Teutonia Ave. district (#52) used to support the relocation of Sigma-Aldrich Corp (today’s MilliporeSigma). The district was created as a result of the Marquette Interchange reconstruction, which triggered the need for the company to move out of the interchange’s expanded footprint. The new factory complex opened in 2005.

The Sigma-Aldrich district is an example of what happens when things go according to plan. The city pledged to rebate up to $5 million, plus interest, over the life of the TIF district to the company to pay for site preparation costs. The money was only provided when incremental property tax revenue from the development exceeded the base value of the district, eliminating the risk to the city.

The district today has generated an incremental assessed value of approximately $17 million, which will now result in the underlying property taxing entities receiving approximately $500,000 annually (of which the city will receive approximately one third).

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‘Gingerbread Land’ Street To Honor Sister Clara

A one-block stretch of N. 1st St. between W. Center St. and W. Clarke St. will soon display an honorary street name recognizing the late Clara Atwater. But many Milwaukeeans might know it better for its brightly colored houses.

Atwater, better known as Sister Clara, Pastor Clara or Mother Clara, founded Love Tabernacle Church at 2640 N. 1st St. more than 50 years ago.

“Around the 80s, early 90s, it was a bad block, probably among the worst in the neighborhood,” said Atwater’s grandson Touissaint Harris to members of the Public Works Committee on March 9.

But Sister Clara had an idea. “She had a vision to adopt homes,” said Harris. It became known as Gingerbread Land, a series of homes where Atwater housed and supported at-risk youth and adults.

Read the full article

City Selling Former Villa/Ritz Theater

In the market for a former movie theater? The Department of City Development has just the property for you.

Built in 1926, the 840-seat movie theater at 3608 W. Villard Ave. was originally known as Ritz Theater. The theater, and two adjoining properties, were listed for sale Tuesday by the Department of City Development via a request for proposals (RFP).

The theater, for which the seats are still installed, has had quite a life despite being vacant for approximately the last decade.

In the 1960s it was known as the Villa Theatre, a Marcus Corp. property that was closed in 1986. Tanya and Herman Lewis bought it in 1988 and showed their last film in 1995. Since then, portions of the 7,200-square-foot building have been used as a salon, a school (known as AGAPE), church and bookstore. The city took ownership of the building via property tax foreclosure in 2015.

Read the full article

Goodbye, Journal Sentinel Printing Plant

In the late nineties, the inexorable decline of the print journalism era accelerated, as readers and advertisers flocked to the internet. In a curious contrarian move, executives of Journal Communications, Inc., seeing a promise in pulp, budgeted $107 million for a new printing plant. Cash flow and increased efficiencies would pay for the new facility — no bank financing required.

It was to be the largest capital investment in the firm’s long history as Wisconsin’s largest locally owned media entity. The company was a pioneering and leading force in the state’s newspaper, radio and television industries. The Internet — not so much.

Since 1924, The Milwaukee Journal had been printed in the firm’s downtown headquarters at 333 W. State St. The purchase of the Milwaukee Sentinel added to the press run in 1961; the two papers merged in 1995. By that time the printing plant was notoriously inefficient and labor-intensive, hindered not least by its basement location and congested site. The printing presses themselves dated to the 1960s and were obsolete. For decades trucks delivering huge rolls of newsprint from a Brewers Hill warehouse were frequent ornaments, and occasional impediments, to downtown traffic. It was time to make a move. Surely, the printed power of the press would pay off!

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