Residents sue to block waterfront hotel construction

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Six people are suing the city of Sturgeon Bay in federal court to halt the construction of a proposed waterfront hotel.

The four-story, 76-room Lindgren Hotel at 100 E. Maple St. is part of the city’s plans, dating to 2011, to redevelop its west waterfront. The city’s Waterfront Redevelopment Authority has given the project developer, Robert Papke of Sawyer Hotel Development LLC, preliminary approval for the project. Sturgeon Bay officials are also considering selling the land to the developer.

Papke, reached Friday, referred questions to David Phillips, construction sales representative at Bayland Buildings Inc., of Green Bay. Bayland is the general contractor on the project.

Phillips said Monday that ground will be broken for the $8 million project in April 2016 and completion is expected by the same month the following year. Because the lawsuit was filed against the city and not against Bayland, the company is not directly involved in the legal action, he said.

The city’s attorney, Randall Nesbitt, said Friday that the lawsuit, filed on Sept. 17, primarily concerns insurance matters. For that reason, the city’s insurance company is assigning its own counsel to the case. Nesbitt declined to comment about how the lawsuit might affect the project.

Not everyone working on the hotel, though, is so reticent. Marty Olejniczak, community development director for the city of Sturgeon Bay, noted that the lawsuit was filed the same day that a bank approved financing for the project.

He said the legal action could throw a wrench into the entire plan.

“We might not be able to do a hotel, period,” Olejniczak said.

The six Sturgeon Bay residents who filed the suit, acting through a group named the Friends of the Sturgeon Bay Public Waterfront, allege that the proposed sale to the developer of the designated project site would violate the state’s constitution. The land where the hotel would be built, they argue, consists mostly of filled-in lake bed and, for that reason, comes under what is known as the public-trust doctrine.

The doctrine is a provision of the constitution requiring that all lakes and rivers remain open to the public. Aside from Sturgeon Bay, the doctrine was invoked in a recent attempt at halting the sale of a piece of land on the Milwaukee lakefront that is the proposed site of a residential development called the Couture.

However, the two lawsuits are different, said the group’s attorney, Mary Beth Peranteau, who litigated the Milwaukee case on behalf of Preserve Our Parks, a park-advocacy group.

In the Milwaukee case, public officials took special action to ensure the Couture project could proceed. In April 2014, lawmakers voted to redefine the city’s shoreline so that the sale of the designated land on the Milwaukee lakefront would not violate the public-trust doctrine.

The Sturgeon Bay lawsuit, in contrast, was filed in federal court and alleges that the sale of land for the hotel project would violate Wisconsin residents’ right to due process. The plaintiffs argue that no legislative approval to the proposed sale and that there would be no public benefit to the project.

Both are requirements found in the public-trust doctrine.

“It goes against 100 years of case law,” said Peranteau. Follow @erikastrebel