The City of Milwaukee is set to start foreclosure proceedings against Esperanza Unida, which owes more than $95,000 in taxes for its site on West National Ave.
The nonprofit group also faces about $2.3 million in liens and judgments, and has been cited for a number of code violations at the site, including for a failing roof and broken sewer lateral that was causing a sinkhole in the street.
City officials will begin a tax foreclosure action against Esperanza Unida on March 29 unless the group pays $61,090.51 — the amount owed for 2015 — by March 24, said Samantha Jackson of the city treasurer's office. The city could take possession of the site after June 7 if the money isn't paid.
"As most people know, the organization fell into financial distress well before my arrival in 2013," said Manuel "Manny" Perez, Esperanza Unida's executive director. "I was brought in to clean up, basically."
Esperanza Unida previously lost another building, known as the International Building, to a city tax foreclosure several years ago. That building, at 611 W. National Ave., was known for its "Mural of Peace," by Milwaukee artist Reynaldo Hernandez, seen by northbound drivers on I-43. The city took control of that building in December 2014 through foreclosure proceedings because the group owed $231,561 in property taxes, including $155,000 in back taxes.
Perez said he helped navigate the previous foreclosure, and had tried to find a developer interested in purchasing the site now facing foreclosure, near the corner of South 14th Street.
The group had found a buyer interested in purchasing the site for about $270,000, Perez said, but the offer fell through in late December. He then tried to find a developer interested in taking over the site in a foreclosure action, but he said there was not much interest.
"The responses that the Realtor received were pretty much zero," Perez said. "In other words, there was not that much interest in developers getting involved."
He said he has found two people possibly interested in a rent-to-own option, with one interested in paying for the back taxes to avoid foreclosure and another interested in fixing the property up to code in exchange for a rent reduction.
"Two individuals from the Hispanic community approached me indicating that because they love the Hispanic community, they want to generate jobs in the city of Milwaukee, they love Esperanza Unida, they have always seen the role of helping individuals overcome poverty, that they would be willing to pay the 2015 taxes to prevent foreclosure," Perez said. "Both of them have the option to buy."
A developer also stated initial interest after Esperanza signed agreements with the two individuals, Perez said.
Esperanza's site was used as a worker training facility but was vacated and placarded in May 2013 for a lack of sanitary conditions due to mold and defective structural members. The roof leaked so much that water and corrosion was affecting the structural steel, city officials said.
The current total tax payoff for the site is $95,661.07, said Jackson.
Martha Brown, deputy commissioner of city development, said Milwaukee sees the site as key to the neighborhood's development.
"We believe that the future of this building is really important to the National Avenue-Chavez Drive commercial district," she said. "This is an area where it's a lively commercial district, and we want to see the best possible future for the property. I think this is a case where foreclosure could actually be a positive path for neighborhood improvement."
She said city officials expect to start reaching out to developers in the near future to test the level of interest in taking possession of the building and cleaning up the property if the foreclosure proceeds.
