Property – Foreclosure – priority – TIF districts

Property
Foreclosure; priority; TIF districts

This appeal involves a priority dispute in a foreclosure proceeding initiated by Baylake Bank. The Bank sought to foreclose on a mortgage on property held by Fairway Properties of Wisconsin, LLC. The property was located in the City of Waupaca in a tax incremental district. After the Bank and Fairway entered into the mortgage agreement, the City and Fairway entered into a development agreement regarding the same property. The development agreement included a damages provision that was triggered when Fairway failed to complete the agreed-to development. The City argues that the amounts owed under the contract damages provision should receive priority over the Bank’s interests in the foreclosure action. The circuit court agreed. As we explain, we agree with the Bank that the circuit court erred and that the City provides no alternative basis on which to affirm. Accordingly, we reverse and remand with directions. Not recommended for publication in the official reports.

2010AP2632 Baylake Bank v. Fairway Properties of Wisconsin LLC, et al.

Dist IV, Waupaca County, Kirk, J., Lundsten, P.J.

Attorneys For Appellant: Nesbitt, Randall J., Sturgeon Bay; For Respondent: Konkol, Robert F., Stevens Point

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