Common Ground’s $30 Million Victory for City
Pressure on Bucks owner Wes Edens results in Nationstar’s $30 million pledge to prevent foreclosures.
A Nationstar Property
No one in the press called it this, but the announcement Friday that Nationstar Mortgage had pledged $30 million over three years to provide support for mortgage restructuring in Milwaukee was a huge victory for Common Ground, the activist coalition made up of religious and community groups.
Yes, the press conference was held by city officials, with Mayor Tom Barrett and Common Council President Michael Murphy announcing the Nationstar settlement. And yes it’s very good news for Milwaukee, which needs all the help it can get to fix the problem of home foreclosures, which can have ruinous effects on neighborhoods.
But it was really Common Ground that discovered and publicized the fact that Nationstar was owned by Fortress Investment Group, a company in turn owned by Milwaukee Bucks owner Wes Edens. Common Ground assailed Edens as a “slumlord” who was asking for government financing of a new Bucks arena even as Nationstar was responsible for foreclosed and distressed homes in Milwaukee. It was an ugly picture that made Edens look like a cold-hearted corporate villain, and made it far tougher to sell the Bucks bailout.
And here was the Common Council, facing a vote on the city subsidy for the Bucks. The announcement of Nationstar’s $30 million commitment was perfectly timed as a way to replace the image of an uncaring Edens with that of a business leader who wants to help Milwaukee.
At the press conference, covered by Fox 6, Nationstar officials and Barrett denied that the company’s ties to Edens spurred this agreement. “I’ve had no conversations with him about this. This is all between the city and Nationstar,” Barrett said in response to question from FOX6’s A.J. Bayatpour.
Murphy was a bit more forthcoming, answering that “it would be naïve to think that didn’t have a role… although I never brought it up and never mentioned it, I think it certainly was in the back of their minds.”
I think it’s safe to say the issue was at the very front of their minds. The reality is that Edens and Nationstar have been getting chased by Common Ground since October, which all but forced the company to make a settlement that city officials have gladly embraced.
It was more than two years ago that Common Ground did a study which found that two-thirds of the outdoor athletic and recreational facilities at public schools throughout the county are in poor condition. The group demanded that if public funds were to be used for a new arena, at least $150 million of the money should be used to improve Milwaukee County public schools’ athletic facilities and recreational spaces.
This was no fly-by-night demand, but a well-though-out and researched plan by a group that back in 2011 was able to negotiate $33.8 million from the world’s largest banks to rehabilitate and resell over 55 homes in Milwaukee’s Sherman Park Neighborhood.
But the group persevered, and in October 2014 announced its discovery that Nationstar was responsible for at least 14 abandoned and deteriorating properties in Milwaukee. The story was covered by Don Walker, the late Milwaukee Journal Sentinel writer, who reported that Edens had been chairman of the board at Nationstar since 2012. The story quoted Bob Connolly, Common Ground’s staff director, who said of Nationstar. “They are responsible for those abandoned properties… “We want those neighborhoods fixed.”
Common Ground demanded a meeting with Edens, which didn’t happen. Instead, Nationstar sent delegates to Milwaukee to meet with Common Ground in December. Accounts of the meeting by Nationstar CEO Jay Bray and Keisha Krumm, lead organizer for Common Ground, disagreed, but the end result was that the issue wasn’t settled.
In January Common Ground stepped up the pressure, with a press conference in front of a dilapidated home. Nationstar is responsible for some 300 homes in Milwaukee, many of which are crumbling and deteriorating properties that blight the neighborhood, the group charged. Common Ground representative Jennifer O’Hear warned that if the group is not able to meet with Edens, its members will go to Texas in May and confront Edens at Nationstar Mortgage’s shareholders’ meeting.
Reporters from four Milwaukee television stations, Wisconsin Public Radio, the Milwaukee Journal Sentinel, Neighborhood News Service and others were there to hear O’Hear call Edens a “slumlord” and demanding he address the issue. “We will not stop until Mr. Edens addresses his interests in neighborhoods with the same energy and intensity he gives his interests in a new Bucks arena,” O’Hear concluded.
In May, Common Ground attended the meeting in Dallas. “We made a presentation and asked him (Jay Bray) to come to Milwaukee and meet with us,” Krumm notes. Bray agreed to do so.
On June 17, Bray flew to Milwaukee and met with Common Ground. By now the group was demanding $30 million from the company to address the problem. Bray also met with Mayor Barrett while in town.
Common Ground had met with Barrett back in January about the issue. Says Krum, “it was almost like the mayor didn’t know the name of Nationstar.” Barrett says the problem for the city was “chasing the rabbit” as mortgages get transferred from one company to another. But he also says city officials had by then known about Nationstar.
Yet it was not until February, not long after the press conference denouncing Edens as a “slumlord,” that the Barrett administration sent letters to Nationstar, Ocwen Financial Corp. and Green Tree Servicing, which city officials have dubbed the “Big Three” of mortgage servicing companies handling Milwaukee properties. Nationstar, the city says, handles 3,400 properties in Milwaukee, of which 150 are in foreclosure.
“The city now had leverage on Nationstar,” Krumm notes. “It was because of our pressure.”
And the group continued the pressure through the summer. “Mr. Edens’ company is blighting our neighborhoods,” Krumm told Wisconsin Public Radio. “We believe our mayor and Common Council have a moral responsibility to get an investment from Nationstar of at least $25 million before the vote on the city’s package of giving money to the arena.”
Ultimately Nationstar gave in and agreed to the figure demanded by Common Ground back in June. The company will provide up to $30 million over the next three years — a 57 percent increase in the mortgage company’s anticipated investment — to help homeowners who are underwater and make modifications in mortgages. The company also agreed to contribute $500,000 over next three years to the city’s home improvement loan program and to hold face-to-face meetings with customers three times a year for the next three years.
None of this would have happened without the pressure by Common Ground. Nationstar’s chief customer officer, Dana Dillard, told the press it was “a first” for her company to partner with a city in this way.
Yet Common Ground got not one word of support from Common Council members during their effort. “It was the inconvenient truth that nobody wanted to talk about,” Krumm says.
Tim Sheehy, President of the Metro Milwaukee Chamber of Commerce, accused Common Ground leaders of “demagoguery” for their style of attacking the arena deal. Ald. Willie Wade, whose aldermanic district is most affected by the problems of foreclosure, accused Common Ground of acting like a bully and said the Bucks deal should be handled by “the people who are elected. Common Ground is out of order to think they can come in and circumvent that.”
But Common Ground was unfazed. Its members are now warning Common Council members that if the city can afford to pay some $80 million for the Bucks arena and adjoining development, it should be able to spend $80 million on the deteriorating playgrounds and athletic fields for Milwaukee’s children. The group promises to make this an issue in the 2016 aldermanic elections.
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Thanks for highlighting this and thanks to all of the good people at Common Ground for persevering with this issue that will bring real tangible benefits to the people of Milwaukee.
Alderman Wade will regret that quote the next time a cop shoots a kid around here and Black Lives Matter raises hell about the common council doing nothing of note about their concerns.
Common Ground already has a candidate to run against Willie Wade. It’s only a matter if time and Wade will no longer have his cushy city hall job.
Hmmm…”Ald. Willie Wade, whose aldermanic district is most affected by the problems of foreclosure, accused Common Ground of acting like a bully and said the Bucks deal should be handled by “the people who are elected.”
Geez, maybe elected officials should listen to people who elected them. I guess Wade wishes citizens would stay in their place…The real bullies taking over Milwaukee are Edens, Lasry et al who keep demanding ever more “house-warming gifts” (NYT)
Kudos to CG, and for staying the course. The $30M is not a donation–it’s a commitment to rewrite loans, which is good. But the playgrounds, parks etc. are still decrepit. If the city got an FMV price for Sydney Hih and the city’s parking garage it built for $30M, that could build some playgrounds and ballparks!
Barrett & Murphy deserve credit, but should quit acting like we’ve got money to burn by tearing down a garage with 30 years of life left and paying to build another a block away. That’s what billionaires do with their multiple homes around the globe..
Common Ground is the classic example of an organization built for distraction. The focus by them should be on the owner of the majority of the facilities that they claim are improperly cared for…..MPS. The footprint of the school district is too big, sell a few buildings and put that money back into the facilities. Problem solved. What’s the next distraction?
Thank goodness for organizations like Common Ground and the reporting of Bruce Murphy.
This is some of the best grass roots community organizing work that has been done in Milwaukee in many years. Well done, Common Ground.
Common Ground is picking to blackmail on an issue that they’re guaranteed to lose on. Then, come election time they probably won’t have much of a difference in the grand scheme of things. Are they really going to support Bathroom Bob or Carpetbagger Wilkin or the conservative who’s challenging Murphy? They’re also less likely to win even in the inner city where the incumbents typically have high name recognition and win by pretty big margins.
They should be pushing for this on its own merit, since it does have merit instead of trying to blackmail and threaten common council members and then act surprised when lots of people aren’t supportive of their actions.
Common Ground will probably not support specific candidates for the Common Council. But, as stated in the article, they will make an issue out of this. Lest we forget Alderman Wade’s statements.
It is so odd to me that we don’t blame the former homeowners who didn’t keep their obligations or the lenders who made bad loans… instead we go after the paper pushers who process payments and manage the day to day activities of the loans that they don’t own.
At least now we can subtract $30.5 million from the exaggerated cost totals for the new Arena, right??
The ‘paper pushers’ have a responsibility to maintain the properties once they take ownership via foreclosure. Nice try, AG.
Nationstar doesn’t take ownership, they only service the property when ownership transfers to the lender or mortgage holders. I am not familiar enough with the details to say everything they’ve done has resolved all their issues, but they’ve presented a good case to show that common ground is not really interested in working with them on the issues they claim to be.
Case in point, they released this letter to CG earlier this year: http://www.wisn.com/blob/view/-/30999096/data/2/-/14g6g8a/-/Nationastar-letter.pdf
Just because they service properties that are in foreclosure doesn’t make them some evil corporation taking advantage of pool little ole’ Milwaukee and it’s homeowners. Not that I think it’s some great organization, but this is all a distraction from the true issues of homeowners paying their bills, lenders not giving bad loans, and MPS taking care of their properties.
Thank you, Common Ground & Bruce Murphy.
Interestingly, the words “crony capitalism” were not used by anyone. But it strikes me as odd that it’s not. After all, google ” TARP money for NationStar” & you’ll find even more public $—way beyond the Arena $.
And- when told ” we should act like business people” when in the public arena, & we say that public investment should equate to co- ownership by the public, it’s dismissed.
Yet, who in business gives up ownership when investing ?
BobD
AG, that letter from Nationstar is one side of the story. Common Ground reps indicated, among other things, that the company demanded Common Ground take down any criticism of Wes Edens from its website. The long and short is both sides couldn’t come to agreement in late January and the issue went on and they in fact did work out an agreement which resulted in the $30 million deal.
There’s room in the story for quibbling about whom should get how much credit for what, and what amount of blame. To me, the takeaway is that whatever good outcomes grow from this matter the organization Common Ground was responsibly undaunted in pursuing what it believed to be in the public interest.
Too often, a group gets some publicity for its stance on some issue, and then trips over itself trying to finish the job. Does not appear to be the case in this scenario. Kudos.
It’s a huge challenge for citizens, even coalitions and community organizations, to get any traction, to have a place at any table (Even WCD was shut out of arena dealing–and is paying the biggest price.). Decisions are made by a few power brokers. In most cases, politicians simply rubber-stamp what’s been decided by the oligarchs.
Wes Edens is trying to avert a PR crisis, not just in MKE. He owns subprime loan companies across the country. He recently bought three in one week. This linked article about Marc Lasry and his role in the Puerto Rican debt crisis, says Edens is nicknamed “the king of subprime.”
http://www.thenation.com/article/is-an-obama-donor-tying-the-presidents-hands-on-puerto-ricos-debt-crisis
If CG helps get some relief for MKE in this housing crisis, at least it”s something, But it’s merely loans, almost no outlay of cash. But taxpayers will still pay upwards of $400M in cash for an arena to generate $$ for a tiny elite.
I worry much more about potential bad outcomes for Milwaukee at large by giving these guys the keys to the city. These guys are playing Monopoly with MKE and are being given lots of prime real estate at the start of the game, plus a head start on gobbling up MKE’s entertainment market.
Lasry called the Bucks franchise “a distressed asset,” same as he called buying Puerto Rico’s debt. Why might the hedge-funders care more about the future of Old World Third Street etc. than about Puerto RIco? The whole city is being played and the business community is pretending nothing bad could possibly happen. That’s because even shrewd business people here are not usually cut-throat. But now we’re in a new league playing against Gordon Gecko masters of of the universe, not congenial guys like Herb Kohl et al.
There is poetic justice in this settlement.
Despite all that’s come out about our Visiting Vulture Capitalists’ dealings in The Nation, reports in the NY Times and TruthDig about how both parties cooked up the fix to give the Bucks owners whatever they demanded, scuttlebutt is that the Common Council will fall in line with maybe a couple dissenters. Hearings and reports may be mere theater and CYA…
Apparently the whole council thinks a big-box bar mall is just what downtown needs. Just as poor people are of little concern, it seems so are small businesses or retaining authentic urban fabric. Decades of bad planning made 4th Street a dead zone. So let’s build a three-story cookie-cutter mall with Jumbotrons to liven it up! Tourists will eat it up! Carnival City solutions. Let’s watch Big Fish eating Little Fish…
Our once-fair city’s “vision void” is scary.
Who’s getting what payoffs in this Faustian bargain?
Common Ground and Wis. Jobs Now–please keep fighting for the common good any way you can!