Foreclosure suit on downtown project dismissed [Milwaukee Journal Sentinel]

Aug. 27--A foreclosure suit targeting downtown's Wisconsin Tower condominiums was dismissed Thursday.

The suit was dismissed by Milwaukee County Circuit Judge John Siefert under an agreement reached between M&I Marshall & Ilsley Bank; local developer David Leszczynski; his firm, City Real Estate Development LLC; and Chicago investor John Fallon.

City Real Estate in 2006 completed the conversion of a 22-story office building into Wisconsin Tower, 606 W. Wisconsin Ave. The building has four commercial condo units and 74 residential units.

M&I last year filed a foreclosure suit against City Real Estate, as well as Leszczynski and Fallon, who both personally guaranteed repayment of an $11.8 million loan. The development firm defaulted on the loan in August 2008, and owed $2.5 million as of September 2009, when the suit was filed.

At the time the suit was filed, Leszczynski said M&I executives had rejected pending sales contracts at Wisconsin Tower, saying the sale prices were too low. He said if the sales had been accepted, City Real Estate would have been able to significantly reduce its bank debt.

Under the new settlement terms, City Real Estate has transferred ownership of the four commercial units and 14 remaining unsold residential units to M&I, Leszczynski said.

The bank, he said, has agreed to sell the units at the lower prices. The settlement calls for City Real Estate to get some of the sale proceeds that could be left over once the bank's debt has been paid off.

Patty Cadorin, M&I's corporate communications director, declined to comment.

A 2,700-square-foot penthouse unit was sold Thursday for $340,000, Leszczynski said. He said sales contracts are pending on two other penthouse units.

The two-bedroom units are now priced at around $275,000, compared with $400,000 when they were originally offered for sale, Leszczynski said. The one-bedroom units are priced at around $165,000, down from $225,000, he said.

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