Judge Rules Northridge Mall Must Be Demolished

Milwaukee’s quest to see the former Northridge Mall demolished and redeveloped secured a major win Monday afternoon.

Judge William Sosnay ruled that the city’s raze orders for the three mall structures were reasonable and enforceable. He also levied a $109,000 fine against the mall’s owners. The Chinese ownership group, U.S. Black Spruce Enterprise Group, has sought since 2019 to block the city’s attempt to demolish the approximately 900,000-square-foot mall complex.

“Black Spruce is ordered that they immediately commence the process of razing the properties,” said Sosnay in making his ruling. He declared the buildings a “public nuisance” and struck down a restraining order that blocked the 2019 orders from being enforced.

It’s the latest twist in a legal saga that Sosnay promised is now headed for a conclusion.

The judge said prior fines, including a $2,000 per day penalty in place since Aug. 19 for not having the property secured, would be enforced. That fine totals $93,000 as of Monday. “I expect that those fines will be paid,” said Sosnay. “The court will not allow this to go on indefinitely. The court is very concerned with the safety hazards this presents.”

Assistant city attorney Michael Radavich asked that Black Spruce’s executive director Li Yang, making a required appearance in court, be held in contempt and jailed for the unpaid fines, but Sosnay instead set an Oct. 31 date to pay the fines. If the fines are not paid by that date Sosnay suggested the city file a lien against the properties.

Sosnay continued to express disbelief that Black Spruce had not acted to improve the properties, which have been the target of increasing vandalism and trespassing. The company has owned the vacant property since 2008. “Having paid $6 million for the property I would have thought something would have been done with it,” said Sosnay. He said he would use every tool at his court’s disposal to compel action. “I stated before, you’re dealing with the wrong judge here.”

The building currently lacks any fire suppression or detection equipment as it does not have electrical service. As Fire Chief Aaron Lipski testified during the trial, the Milwaukee Fire Department responded to four fires at the building this summer and two reached “second alarm” status where additional support was called in. Lipski said the condition of the properties, including extensive debris along walls on the interior, make it difficult and dangerous to fight fires in the building. “You can barely walk without trying to not to slip on broken glass on the floor,” he said. The chief said given the lack of electrical or gas service, any fire is believed to be set by someone breaking into the structure.

A Milwaukee Police Department representative said the department has received 75 calls for service this year. City officials estimate that they have spent $16,000 on public safety expenses this year, an amount Sosnay added to the fine.

The ruling won’t lead to the immediate demolition of the mall. If Black Spruce does not demolish the complex by itself, the city would need to find several additional million dollars to complete the work. It could then apply that cost to the property’s tax bill, but would need to wait until the taxes are unpaid for multiple years to be able to initiate a foreclosure action. Should Black Spruce still not pay the back taxes, the city could take possession and execute a redevelopment plan. Black Spruce is currently behind on its property tax payments, which Yang said was because the company was waiting to see how the court case played out.

The mall closed in 2003 and has been owned by Black Spruce since 2008. The current owners previously proposed creating an Asian marketplace, but those plans have never advanced.

Yang, on Monday, told the court she had not visited the property, nor the United States, since January 2020 primarily because of pandemic restrictions. Sosnay said that was not an excuse not to hire a property maintenance firm.

The Black Spruce representative, who said she moved to Vancouver, Canada from China during the pandemic, established that the group has three shareholders including herself and all are Chinese. Sosnay’s ruling included a requirement that they provide their names and addresses, as well as a financial statement of their assets. He said the state would be used to determine if the ownership group had the resources to address the issues. Yang testified that the mall is the group’s only United States property, but that it owns hotels and other properties in Southeast Asia. She said more than $8 million, not including the 2008 purchase, has been invested in the property’s upkeep.

The case was back in court because earlier this year an appeals court panel ruled that a 2020 ruling applied the wrong standard to calculating the enforceability of the raze order. In a written decision, it said Judge William Pocan improperly ruled in 2020 that the cost to repair the buildings should be based on what was needed to open them to the public, instead of more limited repairs to maintain the buildings as vacant.

State law allows a raze order to be issued when repair costs exceed 50% of the building’s value. The Department of Neighborhood Services estimated in 2019 that repairs would cost $6 million and the attached buildings were only assessed for $81,000. The underlying 46.5 acres of land are assessed at more than $2 million.

The city argues the cost to repair the structures has grown, because of both deterioration and rising costs. In a September court filing, the city said just maintaining the structures as vacant would now cost more than $6 million and the structures were still assessed at only $81,100.

As detailed by witnesses in Monday’s trial, getting the properties to comply with the requirements of vacant buildings in the city of Milwaukee includes debris removal inside, removing more than 100 dead trees outside, constructing a fence around the property, making the structure watertight, installing locking mechanisms and other structural repairs. The largest cost, more than $4.5 million, is to clear the debris. DNS Inspector Tim Bolger testified that the structural calculations were reached by using RSMeans’ estimating handbook. A 2019 agreement between the city and Black Spruce requires Black Spruce also to provide around-the-clock security at the complex.

Black Spruce was represented by attorney Christopher M. Kloth. The City of Milwaukee was represented by deputy city attorney Odalo J. Ohiku and assistant city attorneys Theresa Montag and Radavich. City Attorney Tearman Spencer looked on from the gallery.

Kloth and Spencer both declined to comment after the ruling.

Security at the mall was previously improved after a maintenance worker was killed in July 2019 by a high-voltage transformer. A civil case is still open from that incident.

Kloth started representing Black Spruce this year. The last firm that represented Black Spruce, Von Briesen & Roper, withdrew for breach of contract and is now suing Black Spruce over a pay dispute.

Northridge opened in 1972. The mall failed for a number of reasons, including a lack of direct freeway access, chain bankruptcies, the cyclical nature of malls and negative perception created following Jesse Anderson‘s murder of his wife in the mall’s parking lot and the subsequent false claim that the couple was attacked by two Black males. The mall’s competitors, including Mayfair, Brookfield Square, Southridge and Bayshore, have all received substantial public subsidies to help finance updates in the years since Northridge closed.

Sosnay inherited the case after judicial rotation moved Pocan to family court. Pocan also has a pending federal judgeship.

August 2022 Photos

April 2019 Photos

UPDATE: An earlier version of this article incorrectly identified how Sosnay ended up with the case.