Central-city sites were plagued with problems Baird exec sells seven properties
Robert W. Baird & Co. Inc. executive James H. Herrick sold seven problem-plagued central city properties after being slammed by Mayor Tom Barrett and other city officials.
The properties on the northwest and north sides were sold last month by Herrick companies for $1.675 million, according to deeds recently filed with the Milwaukee County register of deeds. That sum is about $45,000 less than his companies paid for the apartment buildings in 2011 and 2004, the deeds show.
Herrick, 52, who lives on a $1.1 million River Hills estate, was chastised by the mayor, Baird and his tenants for operating buildings loaded with problems, including rats, bed bugs, bad windows and security doors that were not secure. A building that a Herrick company owned in the 1300 block of W. Locust St. was once boarded up by the city after inspectors said it was “unfit for human habitation.”
That Herrick company lost title to that property last year in a foreclosure.
Democratic Rep. Evan Goyke’s district borders
several of the properties sold by Herrick.
“It sounds like it’s time for him to get out of the housing business altogether,” Goyke said.
For years, few knew that Herrick, the co-head of global trading for Baird’s institutional equity services group, moonlighted as a landlord catering largely to low-income residents. The Milwaukee Journal Sentinel revealed that he owned the properties through a series of limited liability companies and detailed the poor condition of several of his properties last year.
Limited liability companies are a common tool used in business that allows company owners to keep their identities secret and to protect their assets from losses incurred by individual LLCs.
Herrick even failed to list all the LLCs in which he had ownership on the regulatory forms filed by Baird.
The failure to disclose angered Barrett, who noted the city was a Baird client and contacted the top executives at the Milwaukee-based securities firm.
“You would think that a client would be interested in knowing that there was a principal who was not disclosing activities that hurt the city,” Barrett said in December.
The mayor and officials in the city attorney’s office and the Department of Neighborhood Services said they were unaware of Herrick’s ownership interest until the Journal Sentinel stories appeared.
In January, Baird publicly expressed its disappointment in Herrick and disclosed that he was trying to sell the properties “noted in (news) stories to new owners.”
In an email statement, Baird spokesman John Rumpf said Friday that Herrick and his LLCs invested “substantial amounts” to improve the properties. But they were unable to deal with “unforeseen circumstances.”
“As a result, the properties were not profitable investments,” Rumpf wrote. “We agreed with Mr. Herrick that the best course of action was to transition the properties to a new owner better equipped to meet the needs of these types of properties. That has now happened.”
Rumpf did not respond to questions about whether remaining properties on 53rd St. and on Hampton Ave. owned by LLCs linked to Herrick would also be sold.
Herrick’s LLCs owed $156,353 in delinquent property taxes until November, when $138,301 was paid just days after a reporter hand-delivered a letter to Herrick’s home stating the Journal Sentinel was working on a story about LLCs connected to him.
In December and January, city building inspectors cited Herrick LLCs for more than 100 violations of the building code. Many of the violations have been fixed, Department of Neighborhood Services records show.
Violations discovered in the buildings include failure to provide adequate heat, a lack of smoke and carbon monoxide detectors, and orders to eliminate rats, mice and roaches, records show.
Herrick’s attorney, Sean Sweeney, declined to comment, and Herrick did not return calls for comment.
Documents filed with county officials show that in February Herrick signed deeds selling:
■ Apartment buildings at 4470 and 4475 N. Hopkins St., for $360,000. The Herrick LLC purchased the buildings for $120,000 in 2011.
■ A building at 23202354 N. 51st St. for $800,000. JHH Enterprises LLC., in which Herrick is the sole owner, paid nearly $1.4 million to buy the property in 2004.
■ Four properties near the intersection of Lisbon and North avenues for $515,000. A Herrick LLC paid $225,000
for those properties in 2011.
The properties were purchased by companies linked to Youssef Berrada, a major central city property owner. Berrada is linked to at least four dozen LLCs that own more than 200 properties in Milwaukee, many of which are apartment buildings. He is known in the community as the “boulder guy” because he frequently decorates the landscape of his properties with large boulders.
Records show that Berrada-owned properties are current on their property taxes.
Having an owner who is “paying taxes versus someone who is not is a big improvement,” Goyke said.
Goyke said he has noticed that after a Berrada company purchases a property, it fixes up the facade and improves the landscaping.
“We want these properties owned and a maintained (by a landlord) that has a long-term positive vision for the city,” Goyke said.
Berrada’s attorney, Joe Goldberger, said his client purchased the properties as “strategic acquisition.” The attorney added that Berrada “intends to (correct) all code violations and put the properties back into productive service.”