Northridge Owner Appeals, Blocks Demolition Order

The City of Milwaukee’s quest to demolish the long-closed Northridge Mall has hit a new roadblock.

The Chinese ownership group, U.S. Black Spruce Enterprise Group, is appealing an Oct. 3 circuit court ruling that affirmed the city’s 2019 raze order and levied a $109,000 fine, due Oct. 31, for failing to secure the property.

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

But Black Spruce, through McDonald & Kloth attorneys Christopher M. Kloth and Shannon D. McDonald, is now appealing Sosnay’s ruling.

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. The approximately 900,000-square-foot structure, meanwhile, has deteriorated. The city launched a condemnation case in 2019, arguing that the cost to repair the complex now exceeds its value.

The issue has spent years in court. Black Spruce first appealed the condemnation through the city’s internal process before launching a circuit court appeal in August 2019. In May 2020, Judge William Pocan ruled in the city’s favor, only for Black Spruce to appeal the decision. In March 2022, the appeals court said the circuit court needed to review one aspect of its earlier ruling. Sosnay’s Oct. 3 ruling, which was not extensively contested by Black Spruce, concluded that review. Sosnay also added a $2,000 per day fine for not complying with a 2019 agreement to secure the property, including around-the-clock security.

The latest appeal, details on the merits of which have yet to be filed, may not impact the demolition timeline given that it was expected to still take an extended period.

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 Black Spruce executive director Li Yang told Sosnay was because the company was waiting to see how the court case played out. Sosnay, in his ruling, suggested that the city could accelerate its case by filing a tax lien for the unpaid fines.

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 argued in the latest hearing that 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 the October 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 making 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.

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.

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.

City officials have expressed increasing frustration with the condition of the complex and frequent break-ins.

Fire Chief Aaron Lipski testified during the trial that 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 a failing roof and 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.

August 2022 Photos

April 2019 Photos