Machinery Row

ACTIVE INVESTIGATION — FINANCIAL RECORDS PENDING

A city-financed redevelopment, displaced businesses, missing relocation benefits, disputed ownership, and unanswered questions about where public grant money went.

Featured question

Was Machinery Row a private development that failed—or a public acquisition structured to look private?

How to read this file

This Phase One investigation separates two categories:

• DOCUMENTED — supported by a specifically identified government or public record.
• ALLEGED — asserted in the pending federal case Fagan v. City of Racine et al., but not yet tested by a court or answered on the merits.

No court has found any defendant liable. Every named person is presumed innocent. This is an independent citizen investigation—not a criminal charge, court finding, or filed pleading.

The project

Machinery Row was presented as a Root River waterfront redevelopment involving private development, public improvements, and a future promenade. Documented records show the City negotiated acquisition price, provided substantial financing, required a deed in lieu of foreclosure, controlled significant escrow funds, released property from its own mortgage, treated the project as public for relocation purposes, and later acquired or controlled the property after the developer defaulted.

The investigation asks whether the developer functioned as a genuine independent purchaser—or as an intermediary through which the City carried out an acquisition it did not initially present as its own.

The City as the real party to the acquisition

Documented

The development agreement required the developer (Blackwell or a related entity) to execute a deed in lieu of foreclosure as a condition of a $4.5 million City loan—giving the City a direct path to the property on default.

• City officials negotiated directly with the seller’s attorney.
• The closing price was reduced to $1.35 million while the City loan remained $1.5 million.
• The City later obtained eminent-domain waivers from the developer.
• In litigation, the City characterized the deal as a private arm’s-length sale while also conceding it was a condemnor for relocation purposes.
• A Racine County judge held that the alleged “straw-man” acquisition theory was legally sufficient to proceed—not a factual finding.

Alleged (unproven)

The 2026 federal complaint alleges quitclaim deeds transferred title directly to the City in late 2014 and early 2015 but were not recorded until December 2017. That stronger ownership claim remains unproven. The complete chain of title must be obtained to resolve it.

Relocation duties were known

This is among the strongest documented portions of the file. At an August 21, 2017 Finance Committee meeting, the Deputy City Attorney reportedly acknowledged:

“These things would have been done at the outset. They should have been done at the outset of the purchase of the property. They just weren’t for whatever reason.”

The same session reportedly included admissions that public funds were involved, the project was treated as public, claims had already been filed with the Wisconsin Department of Administration, and the displacing agency was responsible for relocation costs. City legal officials had also taught municipal attorneys about Wisconsin relocation obligations in June 2017.

• A DOA-approved relocation plan used by the City in another 2014 project
• A June 9, 2017 DOA determination that Machinery Row was a public project
• Another person displaced within the RootWorks footprint received $42,735 in relocation benefits
• A $274,110 itemized relocation claim by the Azarians that apparently was never adjudicated

Alleged: The pending complaint says displaced tenants were required to sign relocation-rights waivers. Federal regulations prohibit a displacing agency from requesting such waivers. The underlying waivers must be examined before this is treated as documented.

Unequal seller compensation

A December 17, 2014 City Administrator email to all fifteen aldermen listed sale prices and assessed values. Calculated outcomes:

• Jensen — approximately 79.7% above assessed value
• Olson — approximately 5.5% above assessed value
• Azarian — approximately 36.8% below assessed value

An interview with Richard Olson indicated roughly $4.85/sq ft for a larger building versus about $6.79/sq ft for Jensen’s smaller property. Olson’s December 31, 2014 closing statement reportedly showed net proceeds of only $1,050.37 from a $1.5 million sale.

The disparity is documented. The reason for it is not. Complete Jensen transaction files and the role of legal representation remain open.

Federal claims dismissed

A federal case filed December 28, 2017 produced, per the PACER docket: a 31-page motion to dismiss (Feb. 28, 2018); a stipulated dismissal thirteen days later; no opposition brief; no amended complaint; no extension request; and dismissal with prejudice on March 15, 2018.

The timing matters because the U.S. Supreme Court had already agreed to hear Knick v. Township of Scott, which later overruled doctrine relied on in the dismissal motion. Correspondence in the file indicates disputes over counsel authorization and how clients learned of the dismissal. The docket proves what was filed and when; whether clients authorized dismissal has not been adjudicated.

Knowles-Nelson grant and project debt

Documented

The recorded Second Amendment authorized project escrow funds, at the City’s discretion and without developer approval, for demolition costs owed to the MRD Group, outstanding real estate taxes, a $22,500 interest-escrow deposit, and quarterly interest payments to the City on the City loan.

• The City released the promenade parcel from its own $4.5 million mortgage.
• Parcels were carved out by certified survey map for transfer.
• Six DNR support letters were submitted within five days in April 2017, several using substantially similar language.
• One legislative support letter described years of successful planning after the developer had already been declared in default.
• The proposed promenade was not built; the West Bluff companion improvement was also not built.

Not yet documented

The agreement shows what escrow could legally fund. It does not show where money was actually spent. Escrow disbursement records are among the highest-priority outstanding evidence.

Alleged: Approximately $470,750 was wired into escrow around April 10, 2017, including federal Land and Water Conservation Fund and Recreational Trails Program money, and foreclosure/recording followed after funds arrived. That sequence must be verified through bank, finance, DNR, federal, and deed records.

After the federal case

In October 2019, the City Attorney reportedly told the Common Council that dismissal was a voluntary plaintiff decision—while $274,110 in relocation claims remained unadjudicated, without disclosing the City Attorney’s CVMIC board position (municipal insurance mutual whose exposure could have been reduced by dismissal), and more than eighteen months after the federal dismissal.

The pending complaint also alleges a February 2023 affidavit stated federal funds were not involved. That assertion has not been tested against the complete grant and financial record.

The 2026 federal complaint

Fagan v. City of Racine et al., E.D. Wis. Case No. 26-cv-0798, was filed in April 2026 by a former tenant who operated P&P Products at 615 South Marquette Street. The pro se civil RICO complaint seeks declaratory and injunctive relief, $4,703,372 in claimed damages (trebled to $14,110,116), and relief against fifteen individuals and entities.

No allegation in that complaint should be treated as established fact.

Key findings

• The City exercised substantial control over the acquisition—financing, deed-in-lieu, direct negotiation, escrow control, and mortgage releases.
• Relocation obligations were known; city legal officials acknowledged steps should have been performed at the outset.
• Relocation treatment appears inconsistent: at least one displaced person was paid while other documented claims were not adjudicated.
• Sellers received sharply different outcomes relative to assessed value.
• Federal claims were dismissed rapidly and with prejudice.
• Grant-related escrow funds were authorized for project debts, taxes, and City-loan interest.
• Actual grant expenditures remain unknown.
• The promenade and companion improvements were not constructed.
• Later city statements may have omitted important context about unresolved claims and potential conflicts.
• The strongest ownership and grant-misuse claims remain partly unverified pending chain of title and disbursement records.

What the evidence does not establish

• Where the $470,750 was ultimately spent
• That the City was the recorded grantee before 2017
• That any court has found a defendant liable
• That any person committed a crime
• Why earlier complaints or referrals produced no charges
• The definitive meaning of a disputed September 2014 email
• The complete terms of the 2013 Knowles-Nelson award
• Why relocation contract amounts differ across records
• Why seller compensation differed
• The final settlement terms in the Azarian matter

Verification priorities

1. Complete chain of title for all Machinery Row parcels
2. Project Escrow and Interest Escrow disbursement records
3. September 25, 2014 Bowman email and option documents
4. February 28, 2023 Azarian affidavit
5. September 2013 Knowles-Nelson award letter
6. Terra Venture contract and Finance Committee authorization
7. DNR and federal grant compliance and closeout records
8. Files behind the 2017 criminal complaints

Evidence library (documents sought / cited)

Recorded instruments: Development Agreement; Second Amendment; Deed in Lieu of Foreclosure; Partial Release of Mortgage; Certified Survey Map No. 3824; related deeds.

Government records: City emails; Finance Committee transcript; Common Council correspondence; DOA relocation determination; DNR support letters; grant files; relocation plans and claims.

Court records: Federal Case No. 2:17-cv-01802-NJ; Wisconsin Court of Appeals Case No. 2020AP001514; Racine County Case No. 19-CV-1524; Fagan v. City of Racine et al., Case No. 26-cv-0798.

Interviews and correspondence: Richard Olson interview; Fagan correspondence; Lori Azarian correspondence; attorney and city legal communications.

H.O.T. Government’s position

The available records support serious questions about whether Machinery Row was structured as a nominally private development while the City exercised the authority, financing, and control of the true acquiring party.

The strongest documented findings concern City control, known relocation obligations, unequal transaction outcomes, rapid dismissal of federal claims, escrow authorization for project debts, missing expenditure records, and incomplete disclosure to public oversight bodies.

The strongest allegations—early City ownership, misuse of federal grant funds, engineered default, and a broader fraudulent scheme—remain unproven.

Document what the records establish. Clearly label what they do not. Publish both.