EAU CLAIRE — Eau Claire area developers are suing a branch of the UW-Eau Claire Foundation for allegedly reneging on rights to develop a portion of the Sonnentag Complex site.
Companies owned by business partners Robb Majeski and Peter Hoeft filed the civil lawsuit on Wednesday afternoon against the Blugold Real Estate Foundation in Eau Claire County Court. Attorney Matthew Meyer of law firm Weld Riley is representing the developers.
The lawsuit accuses the foundation’s real estate arm of misrepresenting its intentions to develop part of the Sonnentag site and breaching a contract with the pair of developers, who had invested their own money into the project.
Kimera Way, executive director of the UW-Eau Claire Foundation and Blugold Real Estate, said Wednesday afternoon that she couldn’t comment on the lawsuit as she’d not yet seen a copy of it.
The exclusivity agreement at the heart of the lawsuit was tied to a mixed-use building the university had at one time planned to be part of the Sonnentag site, but was removed from later plans.
Signed in December 2017 by the developers and Blugold Real Estate, the exclusivity agreement gives Southside Holdings — a company owned by Majeski and Hoeft — the right of first refusal to buy, lease or develop a 3.9-acre portion of the Sonnentag site. That parcel located on the east end of the site had previously been home to school bus company Student Transit’s offices and garage.
A June 2017 news release issued by the university said the mixed-use building would house university recreation programs, a climbing wall, small restaurant, apartments for up to 350 students and educational areas for studying the Chippewa River. A map drawn up for the project showed a five-story building with a 35,500-square-foot footprint. It even got a name — the Big River Education Center. Majeski and Hoeft created a limited liability company named Big River Education Center in 2017 to further the project, but then opted to dissolve it in March 2021.
By then it was clear that part of the project had been removed.
Way said numerous aspects of the Sonnentag Complex have changed since the project was first announced in 2014.
“Lots of things have happened with the project over seven years,” she said.
Announcements last year about the Sonnentag Complex’s planning showed a 5,000-seat event center, indoor fieldhouse, university athletic offices, a university wellness and fitness center and a Mayo Clinic sports medicine and imaging clinic, but not the building that Majeski and Hoeft had an agreement for.
Instead, the former Student Transit lot would be the location of a 174-stall parking lot — one of three lots bordering the Sonnentag Complex to serve regular users — according to a site plan approved in fall 2021 by the Eau Claire City Council.
The 2017 news release on the Big River Education Center has been removed from the university’s website but can still be found in online archives.
While Blugold Real Estate’s plans no longer include that building, Majeski and Hoeft contend the exclusivity agreement for the former Student Transit site still stands.
“We are disheartened that we have had to take this matter to court since we have held up our end of an agreement, and intended to collaborate and create a state-of-the-art Student Housing and Recreation development at the University of Wisconsin-Eau Claire,” Hoeft said in a news release issued with the filing of the lawsuit.
Included with the lawsuit’s civil complaint, the exclusivity agreement states that if Blugold Real Estate gets an offer from a third party to buy, lease or develop the former Student Transit site before Dec. 15, 2027, it must notify Southside Holdings and give them the opportunity to do business under the same terms and conditions.
A section of the agreement granting first rights to Southside Holdings for creating the Big River Education Center does end with the phrase “if (Blugold Real Estate) explores such a possibility.”
The document also states that both parties would need to agree in writing about waiving or modifying any terms of the agreement.
The exclusivity agreement was also tied to a land deal that Southside Holdings said it did to help out the Foundation. Southside Holdings purchased 2.6 acres at the northeast corner of Menomonie Street and North Clairemont Avenue in December 2017 for $950,000, according to online land records. That property consists of a single-story warehouse and its large parking lot.
According to the news release issued Wednesday on behalf of the developers, Blugold Real Estate had Southside Holdings buy the property believing it would be needed to build future facilities. The foundation had the developers buy the land on its behalf as it lacked the funds to do so at that time, the news release stated.
The lawsuit is seeking a jury trial to determine damages and order Blugold Real Estate to abide by the exclusivity agreement. The developers are also asking for a temporary restraining order to prevent work on the former Student Transit site, pending the outcome of the lawsuit.
Way said the lawsuit will not impact the project’s schedule.
“This is not going to delay the Sonnentag project, the construction of the buildings,” she said.
A groundbreaking is scheduled this spring and construction is planned to take about two years, which will allow the May 2024 commencement ceremony to take place in the event center.