The Sturgeon Bay Common Council voted to deny west side hotel developer Bob Papke’s claim for damages. Papke pulled his west side hotel project in June and filed a lawsuit seeking $540,534 plus attorney fees from the city.
The city had 120 days to respond to Papke’s claim, and tried to negotiate a settlement with Papke but was unsuccessful. Papke now has 120 days to file a formal lawsuit against 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 concerns were not made public in city meetings about the development project, and Papke claims he was never notified of them, and commenced extensive planning for the hotel, including architectural plans and marketing.
The Wisconsin Department of Natural Resources is expected to release a declaratory ruling on the location of the ordinary high water mark on the property within weeks.