Mayor Vetoes Sturgeon Bay Hotel Lawsuit Settlement

Mayor Thad Birmingham has exercised his veto authority to kill a legal settlement reached between the Sturgeon Bay Common Council and Sawyer Hotel Development LLC.

The council approved the settlement in a 5 – 2 vote Tuesday, Dec. 4, with alderpersons David Ward and Seth Wiederanders voting against the settlement. The city has not disclosed the terms of the settlement.

Bob Papke, the developer of the Sawyer Hotel on the city’s west waterfront, filed a lawsuit in June of 2017 seeking $540,534 plus attorney fees from the city. Papke claims the city knew that clear title to the land on the west waterfront was in doubt when it agreed to sell it to him for a hotel development. Papke said the city did not notify him that the title was in question when it asked him to build a hotel in June 2014. City records indicate city officials were notified on July 18, 2013, by First American Title Insurance Company that it could not write title insurance for the parcel.

“Because the public trust doctrine is a state constitutional concept, we cannot get a comfort level that irrespective of what the State of Wisconsin may be saying today, today’s position may not bind future state governments, executive and judicial,” wrote Don Schenker, assistant vice president of First American Title Insurance Company, in an email to city attorney Jim Smith and Community Development Director Marty Olejniczak. “We do not lightly turn down the opportunity to write title insurance on what may be a major redevelopment project, but in this case, we must do so. This proposal deserves the greatest consideration that the title industry can give it.”

The Common Council will reconsider the issue at its Dec. 18, 2018 Common Council meeting. A two-thirds vote (5 of 7) of the entire council is required to override the veto.  

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