The firm developing downtown Milwaukee’s stalled high-rise is being sued for owing $11.3 million to its general contractor – which is seeking the project site’s foreclosure sale.
Madison-based Neutral in September stopped construction on its Edison project, a 31-story, 357-unit apartment building, 1005 N. Edison St.
The project, which the suit characterized as “abandoned,” is facing a $25 million funding gap, a city official said in October.
The development firm hasn’t provided evidence it “can raise sufficient capital to complete the Project,” according to the suit – filed by Fond du Lac-based C.D. Smith Construction Inc.
Neutral CEO Nathan Helbach didn’t immediately respond to the Milwaukee Journal Sentinel’s request for comment on the lawsuit.
C.D. Smith in November dismantled and removed the site’s construction crane and other equipment.
The construction firm in November also filed a lien in Milwaukee County Circuit Court saying it’s owed $10.1 million in connection with that project. That lien targets The Edison SPE LLC, a Neutral affiliate.
C.D. Smith’s lawsuit targets The Edison SPE and The Edison Project LLC, another Neutral affiliate.
The Neutral affiliates owe $11.3 million in unpaid bills before taking into account interest, fees, court costs, “or any other related damages,” according to the March 6 filing.
The Edison developer said it was ‘pausing’ work on the high rise
Neutral said in September it was pausing work on the project – calling it a temporary measure while looking at ways to reduce costs. Construction started in June.
That happened after the Neutral affiliates “ran out of capital” following cost overruns, the suit said.
The developer terminated loan agreements “with senior lenders” and discussed restructuring the project and/or selling it, the suit said.
The Neutral affiliates haven’t done any meaningful value engineering work to reduce project costs, and haven’t proposed workable solutions to cover “millions in unpaid costs,” the suit said.
“In other words, Owner has all but abandoned the Project as contemplated and agreed under the relevant agreements,” it said.
Lawsuit against Neutral demands damages, foreclosure on The Edison site
C.D. Smith is seeking damages of no less than $11.3 million, and wants a judge to issue a foreclosure judgment on the Edison Street development site.
If granted, C.D. Smith could take ownership of the riverfront parcel and then sell it to another prospective developer.
The suit also names 11 other firms which have filed liens for unpaid bills tied to the project. That includes project architect Chicago-based Hartshorne Plunkard Architecture LLC.
The Edison site also has an overdue property tax bill of more than $43,000, according to city records
Meanwhile, the Department of City Development is seeking new development proposals for the city-owned Marcus Performing Arts Center parking structure site – after initially recommending in 2024 Neutral’s conceptual plan for the 2.5-acre parcel, 1001 N. Water St.
City Development Commissioner Lafayette Crump announced that decision in November, saying it was “time to move in another direction.”
In a statement, Crump said the department continues to discuss the Marcus Center site with developers as it evaluates market conditions.
Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram, Bluesky, X and Facebook.
This article originally appeared on Milwaukee Journal Sentinel: Edison developer sued for $11 million by firm seeking foreclosure
Reporting by Tom Daykin, Milwaukee Journal Sentinel / Milwaukee Journal Sentinel
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