Six years and nine months after the City of Platteville started issuing citations against landlord Darrel Kallembach, 3½ years after the city won a court judgment against Kallembach, and five months after the city officially became the owner of 15 of his houses, the Common Council approved the sale of 12 of Kallembach’s houses Sept. 9.
Assuming all 12 sales go to closing — the bids require an Offer to Purchase document and a developer’s agreement — the city will receive $322,109.76 from the sales, which will go most of the way to recoup the estimated $350,000 the city has spent on satisfying liens and maintaining the houses until sale.
The council approved the 12 sales 6–1, with at-large Ald. Mike Denn voting against, saying it was “unfortunate we were not able to raze these houses,” which “would have been a much better use of these properties.”
The Request for Proposal documents stated that the city “will select the proposals that are determined to be the most advantageous to the community. This may include proposals that do not include the highest bid amount.”
In fact, the highest bidder was awarded only three of the houses — Rigafellers Enterprises LLC of Sun Prairie, $33,750 for the house at 260 S. Chestnut St., and $35,250 for the house at 235 Third St.; and Duane Wagner, $51,500 for the house at 1536 County B.
The city could have gotten $407,750 had it taken all the highest bids for the 12 houses.
But, said at-large Ald. Amy Seeboth-Wilson, “The bid amount was not a major part of the scoring system, and we were looking for long-term value. When you factor increased value, we’re going to increase property values by more than $900,000 if everything goes as planned.”
In case any of the house sales aren’t completed, the committee that scored the bids, including Denn and Seeboth-Wilson, will reconvene to reaward bids. The city also has a deadline of Dec. 31 to close on the houses so they don’t go off the property tax rolls.
River to Valley Initiatives of Prairie du Chien was awarded five of the houses — 440 Southwest Road, for $29,411; 335 Division St., for $27,758; 420 Southwest Road, for $24,716; 255 Division St., for $22,974; and 565 W. Cedar St., for $20,349.76.
The two Southwest Road houses will be demolished and replaced with a three-unit townhouse, according to the bid documents. The 335 Division St. house will be renovated for “an affordable single-family residence for sale to an owner-occupied [low- to moderate-income] resident,” while the other two houses will be demolished and replaced by “affordable single-family” houses.
Droessler Properties, LLC, was awarded two houses — 185 Center St., for $15,000, and 430 S. Chestnut St., for the minimum $14,000 bid — both of which will be demolished and replaced by single-family rental houses, according to the bid documents.
Rigafellers Enterprises plans to renovate and repair its two houses for sale or rental, according to the bid documents.
The other three houses went to three different bidders. Wagner plans to renovate the County B property “for sale as a single-family home, or for a rental if selling proves difficult,” according to bid documents. Dave and Judy Irish were awarded the house at 375 Irene St., for $25,000; they plan to replace the house with a four-bedroom rental house, according to bid documents. John and Dustan Duggan were awarded the house at 310 W. Gridley Ave., for $22,401; they plan to “renovate and restore” the house, according to bid documents.
The city received 88 bids by the July 31 Request for Proposal deadline, 69 of which met the minimum bid price for that property. The city also got two bids to purchase all 12 properties, one of which met the exact $236,000 of all 12 houses’ minimum bids.
Rigafellers was one of four bidders to place bids on every house. The other three were River to Valley Initiatives, John and Dustan Duggan, and JPC Castle Enterprises LLC. JPC submitted the lowest bid on every property, and none of its bids met the minimum bid. The Wisconsin Partnership for Housing Development placed a bid equal to the minimum bid on each house for all 12 houses. Professional Properties LLC placed a $120,000 bid for all 12 houses.
The unsuccessful bidders included Leonard Kallembach, Darrel’s father, who bid on nine of the houses, in each case to be used as a single-family rental.
The city used $288,341.96 of the $366,765.38 of fines and interest on Darrel Kallembach’s 19 properties in successfully bidding on 15 of them in the January 2013 sheriff’s sale. The fines and interest came from more than 100 citations Kallembach was issued for violations of city ordinances between 2008 and 2010.
Kallembach’s houses at 605 and 605½ Southwest Road and 465 Division St. were purchased by Laufenberg & Larson Properties, LLC, which also placed bids on three of the houses. The houses at 390 W. Pine St. and 540 E. Mineral St. were purchased by R&M J&S Rentals, LLC.
The city has not decided on what to do with the three houses it decided not to sell, at 222 and 230 N. Elm St., 160 E. Mineral St., and 85 N. Water St. The North Elm Street house is near the Platteville EMS garage, the East Mineral Street house is near Jenor Towers and Jenor Park, and the North Water Street house is near Water Street businesses.