Radisson Owner Fires Back at Village, Alleges Breach of Contract

On the same day the Village of Menomonee Falls filed a foreclosure suit against the Radisson Hotel, principal owner James Heyden fired back with allegations of his own against the village.

Heyden’s attorney, Lynne Mueller, filed a motion to intervene on the foreclosure suit on Friday. Heyden alleges the village hampered his efforts to effectively operate the hotel because the village failed to provide startup funds necessary to open the the establishment.

Heyden claims the village contractually agreed to pay initial operational and inventory costs, but its failure to do so resulted in a slim operating budget for the hotel and hampered business.

Heyden also alleges the village is withholding a “large amount” of escrowed funds from Radisson Hotel subcontractors, and the unpaid claims are also detrimental to the business. The Radisson has suffered financially as a result of the alleged contract breach by the village, and customers have cancelled conventions and weddings as a result, according to the court document.

On Friday, against Lodging Investors of Menomonee Falls, the five-member ownership group of the hotel. The action was taken by the village to offer a clear title to any purchaser and a subsequent sale of the property in order to recover a principal amount of  $14.4 million in funds advanced by the village as well as an undisclosed amount of interest and other costs.

“This foreclosure action is necessary to protect the financial interests of the Village in the property,” stated attorney Randall Crocker on Friday, who is representing the village in foreclosure proceedings. “This foreclosure is not the result of any action or inaction by the village.”

Heyden says he was misled by village

However, Heyden claims he was told that if he agreed to village’s court-ordered receiver, his investment interests in the hotel would be protected. Instead, Heyden was barred from the property, and the village filed a foreclosure suit shortly thereafter.

Heyden argues that he has been an “organizing force” behind the hotel and has “aggressively marketed” the business to keep it running effectively.

However, the village isn’t buying Heyden’s allegations.

“We have reviewed the pleadings and believe that the allegations contained therein are without merit,” Crocker stated in an email to Menomonee Falls Patch.

Heyden also alleges that Dean Grosskopf, minority owner of the hotel, is also to blame for the hotel's financial troubles. Heyden claims Grosskopf failed to disclose the hotel's financials to the retained accountants, which led to the foreclosure suit.

Heyden’s attorney did not immediately return phone calls from Menomonee Falls Patch.

Hotel remains open for business

Despite the turmoil among hotel leadership, the Radisson staff will continue to operate normally throughout the foreclosure proceedings. The hotel will continue to operate under the supervision of the court-ordered receiver, which the .

Over the past two years, Lodging Investors has been the center of controversy ever since owners failed to make the first two payments on a $17.65 million loan issued by the village to kick-start the development.

Lodging Investors failed to make its first two $700,000 payments on the loan, and things went further south from there. For the past month, contractors who built the hotel have been for the work they completed on the hotel. Barry Bloom, a manager with A1 Services, said the company is owed $70,000.

Bloom has organized other contractors around Wisconsin who also have not received payments, and they have appeared at the past three Village Board meetings demanding answers.

However, on the Radisson proceedings. Contractors plan to appear again Monday at the Village Board meeting. Bloom estimates that the laundry list of contractors is owed more than $600,000 combined.

Bloom and other contractors are planning once again to make their demands public at the Village Board meeting starting at 6:30 p.m. at Village Hall.

To view all of Menomonee Falls Patch's coverage of the Radisson Hotel, please visit our hotel topics page.