New properties bought while fines go unpaid
Sherard continues to make purchases
In the past year, central city landlord Will Sherard and his real estate company have spent nearly $62,000 in cash to buy six foreclosed properties — an amount that nearly matches the amount in longstanding court fines he says he cannot afford to pay.
Sherard was ordered to pay the fines for building code violations about eight months ago by a Milwaukee Municipal Court judge and again this month by a Milwaukee County Circuit Court judge, who denied Sherard’s appeal. The Milwaukee Journal Sentinel identified the recent purchases through deeds and court records.
“He’s basically taking advantage of the taxpayers,” said Patrick Curley, chief of
staff to Mayor Tom Barrett. “This guy knows how to game the system and it is up to the courts and now the Legislature to stop the gamesmanship.”
The amount spent by Sherard or his company, Morocco Investments LLC, could jump in the coming days, since bids to purchase two other properties for $19,901 were approved Jan. 30 in Milwaukee County Circuit Court. The deals will close if Sherard comes to court with the money to complete the purchases by Monday.
Last week alone, Sherard or Morocco Investments paid $15,400 to purchase two other properties, according to records in the Milwaukee County Clerk of Courts and Register of Deeds offices. Sherard has said in court that he is the sole owner of Morocco Investments.
Sherard, one of the city’s most notorious central city landlords, has been embroiled in a battle with the city since June when Municipal Court Judge Phillip Chavez gave Sherard a year to pay $64,550 in fines dating back to 2011. Sherard’s appeal of that order was rejected this month by Milwaukee County Circuit Judge Glenn Yamahiro. Chavez ordered that the first payment of $39,728 be made within 60 days of his June order and the remainder be paid within one year.
In a separate Municipal Court case, Morocco Investments was ordered in July to pay $5,300 in building code fines. Neither set of fines has been paid.
In both cases, Sherard repeatedly received Municipal Court approval to make nominal payments — often as little as $100 per fine — every two to three months. The city attorney’s office began objecting to the payment plans shortly after the Journal Sentinel exposed the practice in April as part of an ongoing investigation.
Morocco Investment was fined an additional $15,000 last year after being charged with 86 violations of the city building code.
Timothy Baldwin, Sherard’s attorney, said his client has been taking his time paying the fines because the city attorney’s office and Municipal Court judges allowed him to do so.
“He was entitled to do this — it was a part of the practice of the industry,” Baldwin said.
Adam Stephens, deputy city attorney who oversees building code prosecutions, did not return repeated calls for comment last week.
Before June, city prosecutors generally were not in the courtroom when municipal judges would approve the minimal payments. That practice changed in May when the city attorney’s office asked to be notified when certain landlords came to court to make any payments.
In papers filed in Circuit Court, Baldwin argued the new practice was in response to the Journal Sentinel stories and amounted to a “crackdown on certain designated landlords.”
The Journal Sentinel has reported that on one day in April 2011, Sherard was fined $45,184 for about 100 code violations at six properties. Sherard still owes $39,600 of those fines. Meanwhile, he and Morocco spent $636,000 to buy 63 foreclosed houses and duplexes from 2011 until spring 2016.
In addition, Morocco owes the city at least $10,000 in delinquent taxes.
Curley and Jennifer Gonda, the city’s chief lobbyist, said a bill being prepared for introduction in the state Legislature this spring would prevent Sherard and other landlords who game the system by not paying fines or taxes from purchasing properties at the sheriff’s sale.
Sheriffs in each Wisconsin county regularly conduct auctions where foreclosed properties are sold to the highest bidder.
In Milwaukee County, the sales are held on Monday mornings in the basement of the Safety Building. There are few restrictions on who can purchase properties. The main requirement is that the buyer use cash or a guaranteed form of payment, such as a cashier’s check.
The proposed bill would allow counties to expand the pool of potential buyers by using the internet to conduct the sheriff’s sales. The bill also calls for banning anybody who owed back property taxes or municipal fines from buying properties.
The ban “would have prevented (Sherard) from buying the properties,” Gonda said.
The bill would also require limited liability companies that buy properties to disclose the names of their owners, state Rep. Evan Goyke (D-Milwaukee), who will be one of the bill’s sponsors, has said.
Goyke and Gonda have both said they are trying to drum up bipartisan support before introducing the bill to the Republican-dominated Legislature.
Gonda said the city has been meeting with groups representing bankers, Realtors and other interest groups and that so far none has strong opposition to the key provisions of the proposal.
“Why wouldn’t you get on board?” Curley said, arguing there should be no support in the Capitol for landlords who avoid paying fines or taxes. “Who would represent the constituency that supports this type of behavior?”
Sherard’s attorney said that landlords such as Sherard have become easy targets.
He argued that Sherard’s business plan requires Sherard to buy properties in need of repair at a low cost and delay paying city fines so he could put money into the properties.
Renting properties, that often have code violations, to lowincome people in the central city is not a business popular with the public, Baldwin said. But, the lawyer argued, there are other unpopular businesses that provide needed services.
“We turn our nose down on the business assets he has, just like we do for junk bonds or people in waste management,” Baldwin said. “Are there some uncomfortable things about (Sherard’s business)? Yes there is.
“There are some uncomfortable things about war, yet we have contractors who make money off of war.”