Bank forecloses on Lake Lawn Resort
Lake Lawn timeline
2004—Delavan Resort Holdings buys Lake Lawn Resort.
2005—Early in the year, resort owners present a $390 million conceptual plan to redevelop the property. The city approves the plan in September.
Plans include renovating 222 guest rooms, meeting rooms, main lobby, restaurants, bars and bathrooms.
Other plans include building two- and three-bedroom condominium units in five buildings known as the Villas of Harbor's Edge, moving the resort's main entrance from Highway 50 to North Shore Drive, building the Grand Delavan hotel and conference center and building an indoor water park.
2006—The resort completes a $30 million upgrade to its 222 guest rooms.
2007—Resort ownership changes from 37 people to fewer than 10 in an attempt to streamline decision making, President Pat Nelson said.
January 2009—The resort says it’s officially done with the first phase of the upgrade. The $40 million project included improvements to guest rooms and public spaces.
May 2009—Orren Pickell Development of Lincolnshire, Ill., files a $13.1 million suit in Waukesha County Court. According to the summons and complaint, Delavan Resort Holdings broke a contract in which Delavan Resort Holdings had promised to sell 258 acres and 37 condos to Pickell.
Similar suits had been filed and dismissed in federal courts in Milwaukee and Illinois.
June 30, 2009—The Delavan City Council unanimously renews the resort’s liquor license as it was about to expire. On June 29, the resort had paid the city $87,200 to clear some outstanding invoices as well as a few that had yet to be issued by the city.
DELAVAN — Lake Lawn Resort will operate as normal despite a $51.9 million foreclosure action filed against it this week by a Madison bank, General Manager Pete Zellmer said.
“This resort has been here for 131 years, and we will continue to provide outstanding service for years to come,” Zellmer said.
The resort is in default on a $51.9 million loan, according to the summons and complaint filed Wednesday in Walworth County Court.
The resort owners have failed to pay real estate taxes, failed to meet the required number of pre-sale agreements on condominium units and failed to make required monthly interest payments since May, according to court documents.
The loan was taken out in September 2007 and was due in September 2010, according to the documents.
AnchorBank, Madison, has requested that the property be sold in a sheriff’s sale within six months of a judge’s decision on the foreclosure, according to court documents.
The bank also seeks a deficiency judgment for any money owed above and beyond what is earned in the sheriff’s sale.
The owners of the resort owe the bank $34.34 million in principal, interest and late charges, according to court documents.
Liz Boelter, an Anchor Bank spokeswoman, would not comment because the case is in litigation.
The foreclosure was caused in part by the national banking crisis and economic woes, Lake Lawn wrote in a statement released Friday.
Lake Lawn noted in its statement that AnchorBank recently announced it has hired a chief risk officer following orders from regulators to monitor and improve its commercial loan portfolio.
Options for Delavan Resort Holdings, one of the owners of Lake Lawn Resort, include bringing in additional investors or lenders, or renegotiating or re-structuring its financing terms, according to the statement.
Sales for the condominiums, known as Villas of Harbor’s Edge, were delayed because of current economic conditions and negotiations with city and other regulatory entities, according to the statement.
The summons and complaint refer to outstanding property taxes Lake Lawn owes Walworth County in addition to the money owed the bank.
As of Friday afternoon, the resort owed the county $792,716, Treasurer Kathy DuBois said. The first installment of the taxes was due Jan. 31.
The taxes are due on 29 parcels owed by three entities, DuBois said.
Taxes on one small parcel, owned by Lake Lawn, LLC, have been paid in full, she said. The amount was less than $2,000, she said.
Lake Lawn also owes the city of Delavan about $8,000 in overdue cost-recovery invoices, Treasurer Jennifer Wiese said Friday afternoon.
That does not include current invoices, Wiese said.
The amount due to the city is not mentioned in the complaint.
But similar outstanding payments combined with the outstanding property tax bills earlier this summer pushed Lake Lawn into the limelight against its will.
In June, Lake Lawn and a handful of other businesses had to fight to keep their city of Delavan liquor licenses. City ordinance prohibits the council from licensing businesses with outstanding payments.
The city council June 30 approved the resort’s liquor license after Lake Lawn cut a check for $87,200. That covered outstanding cost-recovery invoices as well as some invoices the city had yet to issue.
The cost-recovery invoices are related to attorney fees and other professional services included in the resort’s developers agreement with the city.
At the end of June, Lake Lawn was contesting some of the invoices. The resort and city staff worked together to straighten out the payment history.
The summons and complaint filed Wednesday list several defendants, including:
-- Delavan Resort, Delavan Resort Holdings and Delavan Resort Development.
-- Patrick and Wendy Nelson, Mukwonago. Patrick Nelson is the president of Delavan Resort Development. Nelson declined to comment and referred to the prepared statement.
-- Richard A. Schneider, Waukesha.
-- Stephen M. Compton, Williams Bay.
-- John A. Helding, Franksville.
-- Nelson Helding Investments, Nelson Group Investments, R.A. Schneider Ventures, C and M Resort Development, Delavan Resort Hospitality, Delavan Resort Airfield, Delavan Resort Management and Lake Lawn Resort Properties.
Nov 30, 2010 at 1:23 p.m.
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Sounds just like the Wagon Wheel in Rockton IL. The state ended up cleaning up that mess. I hope they just let this go bad and not help out.
Sep 29, 2010 at 6:56 a.m.
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MOUSE - You are correct - very well said.
May 20, 2010 at 8:51 a.m.
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Lake Lawn, Lake Geneva both local paradise for Illinois.
How much of Delavan Lake and Lake Geneva is shoreline accessible to Wisconsin folk? Land and lake grab make the area seem more like part of Illinois. Would be interesting to know how many businesses in the town are owned by Illinois.
How about a big condo development for Illinois retirees ( Golf course and lake and landing strip are in place.)
If we stock the fish, we might still get boat rights.
May 19, 2010 at 7:06 a.m.
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As a teenager in the late 50's going to the teenage dances at Lake Lawn on Thursday nights was part of the scene. Teens came from all over and it was fun--no drinking, drugs, fighting--just good dancing music. It is sad to see the problems at Lake Lawn. It was such a fixture in the area. My sister worked there as a waitress and wore an Indian dress and headband--that wouldn't go over very well now!! The food used to be really good but we went there a few years ago and it wasn't so good. It's a beautiful spot and I'm with some other posters who think maybe if you get the right management in there who know what they are doing, they could turn things around.
Jan 18, 2010 at 10:23 p.m.
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New Yorks Tavern on the Green has recently close. Has been a fixture in Central Park for 75 years. See a pattern devoloping?
Jan 18, 2010 at 10:12 p.m.
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Why Genava Lakes Dog Track was not allowed to have casino gaming is big part of the reason for the decay of that area. The jobs the Casino could have create would have been a big boost. Lake Lawn would most likey also be thriving. 51 million you say is what is worth? It's worth what someone is willing to pay for it. That's what it's worth.
Jan 18, 2010 at 3:41 p.m.
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Humh- let me see-humh. Word association game. Lake Lawn Resort- wealthy Chicagoans- horse manure- flies around it. Who cares, I can't relate to their problems and don't really want to read about them. I do hope the bank gets some of its investments back. I guess I'm just one of those typical Southern Wisconsin rednecks.
Oct 28, 2009 at 1:44 p.m.
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klick~is that now the petting zoo of Dana Montana?
Aug 10, 2009 at 10:31 p.m.
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They have priced themselves out of business. They renovated not too many years ago and they thought they could lure tourists to their establishment instead of Lake Geneva. Their prices kept us away. The food and accomodations are overpriced for what you get. Making Lake Lawn affordable for lower-middle class folks would benefit everyone. Full rooms and restaurants makes money and jobs. What my Grandpa called "penny wise and pound foolish."
Aug 10, 2009 at 8:26 p.m.
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Badgerboy:YES.
Aug 10, 2009 at 5:37 p.m.
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One of the investors is shown as Stephen M. Compton of Williams Bay. Is this the same Stephen M. Compton, 250 Van Bee Circle, who was charged with felony possession of narcotic drugs and bail jumping?
Source: http://tinyurl.com/mow3by
Aug 9, 2009 at 7:15 p.m.
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Sad that the investment wonks over-reached on this project. This WAS a wonderful place for families with small kids. Also a great place during the summer......back when they had bands for the college set, AND another for married couples. This place WAS lively. Now it's almost dead. I hope that new investors regain their focus.
Aug 9, 2009 at 4:38 p.m.
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I'm confident the resort property will continue to be there, short of a blast from space. Whether it will be under control of the current owners is another thing.
Aug 9, 2009 at 4:09 p.m.
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I haven't been in that area for 40 years .i don't know whats there now.
Aug 9, 2009 at 3:32 p.m.
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gonefishin do you remember the 4 winds riding stable on the corner of highway 50 and 67 ? thats where i worked in the mid sixty's
Aug 9, 2009 at 9:22 a.m.
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wesgonsin: You're a wise person. They keep over-evaluating everything around here, so that we can pay more in taxes but they can pretend that they didn't raise them. Since the Realtor Associations has a reason to keep on being upbeat, despite the huge number of foreclosures and the precipitous drop in housing prices, they can all keep up this charade. It's the little guy that feels the squeeze.
Aug 9, 2009 at 7:08 a.m.
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We use to go to Lake Lawn every Friday nite for fish.They set there new prices too high.($58.00) plus tax for fish.It is ther own fault under new management the last 5 years.They are more involved in building condos.Shame Mr.Reader sold it way back when.They let there airport go under.Maybe someone will buy and turn around.
Aug 9, 2009 at 2:47 a.m.
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"people from Chicago people came in droves"..... So is that supposed to just give us all a warm and fuzzy feeling inside? If they came in droves, well then I reckon they should'a been able to pay a few taxes. Just like everyone else. I would have my doubts, however, that Lake Lawn is worth 51 million.
Aug 8, 2009 at 10:13 p.m.
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BostonBill back in the day that resort was filled every day in the summer, people from Chicago people came in droves horse riding and the such .
Aug 8, 2009 at 9:54 p.m.
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A quote from the article: '“This resort has been here for 131 years, and we will continue to provide outstanding service for years to come,” Zellmer said.'
Are you kidding? What does, "years to come" mean? One or two? Look at the track record of one or more of the investors.
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