Oshkosh chancellor got sweet deal for home
University foundation paid $122,000 above house’s assessed value
The University of Wisconsin-Oshkosh Foundation bought Chancellor Richard Wells’ home for roughly $120,000 more than it arguably was worth before he retired — the same foundation he’s accused of illegally using to help cement his legacy.
In addition to that windfall, Wells saved roughly $27,000 in Realtor commission because the sprawling, classic midcentury modern ranch house with brick privacy walls never went on the market.
The chancellor continued to live in the house about a half mile from campus rent-free per a standard contract until he moved to Florida 20 months after the sale. After he left, the foundation sank another $62,000 into the 3,247-square-foot home to update the kitchen, add a half-bath and coat room, resolve serious water drainage issues and make extensive repairs, including replacing two bulging concrete patios, according to UW-Oshkosh records obtained by the Milwaukee Journal Sentinel through an open records request.
Those issues presumably should have driven the home’s price down, not allowed it to be jacked 26% above fair market value. The UWOshkosh Foundation bought the home for future chancellors to live and entertain university guests in. Current Chancellor Andrew Leavitt lives there now.
The $62,000 includes about $16,500 reimbursed to the university for work done on the house by UW-Oshkosh facilities workers, some at rates of more than $60 an hour. Other work was done by private contractors.
The home sale is not part of the civil suit filed in January by the Department of Justice on behalf of the UW System against Wells and his right-hand man, Thomas Sonnleitner, the university’s former chief business officer. However, the deal sheds more light on Wells’ relationship with the foundation, whose mission is to raise private donations to support university students, faculty, programs and facilities.
The deal also underscores the culture Wells created during his 14-year tenure. Numerous UW-Oshkosh educators and former employees describe him as a leader with swagger who got what he wanted and didn’t take no for an answer.
The deal also underscores the culture Wells created during his 14-year tenure. Numerous UWOshkosh educators and former employees describe him as a leader with swagger who got what he wanted and didn’t take no for an answer.
When he retired, Wells was heralded for modernizing the state’s thirdlargest university.
But he has since been accused of driving its affiliated foundation into debt with ambitious real estate projects — power that chancellors aren’t supposed to have over independent foundations. Now the fundraising foundation faces bankruptcy if it cannot find a way to remain solvent.
Paid the price
Wells originally asked the UW System to buy his house as a residence for future chancellors.
System officials declined, saying the asking price was too high, and they did not want to take on another property, System spokeswoman Stephanie Marquis confirmed Friday.
Wells persuaded the
foundation to pay his asking price of $450,000, and closed the deal in January 2013, according to records.
The sale price was $118,700 above the $331,300 fair market value, and $122,000 above the $328,600 assessed value, according to city records.
The house has an art center annex and parking lot behind it, and the neighborhood is a mix of tony Victorians and modest homes.
Wells retired in August 2014. Sonnleitner retired in spring 2016, as the state investigation into his activities was unfolding.
Wells and Sonnleitner are accused of improperly commingling university funds with private funds. Neither man is accused of personally benefiting from their actions.
But a Department of Justice spokesman has declined to comment on whether criminal charges are being considered.
The lawsuit alleges the two funneled university money through the foundation to help pay for five real estate projects, illegally guaranteed the university would assume responsibility for loans the foundation took out if it could not make its debt payments, and then covered their tracks.
All told, the former administrators are accused of illegally transferring more than $11 million in university funds between 2010 and last year to help the foundation complete the five projects, including the Alumni Welcome and Conference Center, a new sports complex and two biodigesters that convert waste to energy.
Sonnleitner claimed in a response to the lawsuit that the transactions were not illegal, and that UW System officials both knew about their activities and did not object at the time.
Ray Dall’Osto, the Milwaukee attorney representing Wells, has not filed a response to the lawsuit.
Rehab needed
Wells and his wife, Christie, bought the house at 1423 Congress Ave. for $285,000 in March 2001 from the estate of prominent community philanthropist Alberta Kimball, according to city records.
The couple replaced a furnace and added a hot tub within six years of the purchase, a review of building permits shows. No other permits were filed with the city to suggest they did anything to boost the value to $450,000.
When Wells sold the house, both of its cement patios were too uneven to hold furniture, the decking on the front porch had rotted, heavy rainfalls caused the roof to leak and the basement to take on water, the electrical service was outdated, and the kitchen, with an adobered tile floor, needed complete updating, according to those directly familiar with the home and the work that went into it.
Wells even left behind his bed and other odds and ends that university employees were expected to clean up, sources told the Journal Sentinel.
Sonnleitner directed facilities employees to do extensive work on the house after Wells moved out, the sources said.
Dall’Osto told the Journal Sentinel that nothing improper occurred when Wells sold the house to the foundation.
He further said property tax bills “are not reliable” and suggested an appraisal put the home’s value higher than the fair market value.
Attempts to reach the foundation’s Milwaukee attorney, Dan Vaccaro, were not successful.
Foundation President Tim Mulloy responded in an email Saturday:
“We have maintained a ‘no comment’ posture throughout the review. We plan on maintaining that position until we have resolution.”