Reading Time: 3 minutes

A Milwaukee County Circuit Court judge has ruled that the Social Development Commission’s property corporation defaulted on mortgage payments for its North Avenue buildings and faces foreclosure in the coming months.

This judgment, which was issued Monday, Oct. 6, is the latest development for the Social Development Commission as the anti-poverty agency attempts to reconcile its budget and secure funding amid lawsuits, board tensions and government reviews.  

The properties will now enter a redemption period for three months before the court can take further action, including selling the properties at auction. 

“I can tell you that (SDC) is working tirelessly to be able to secure and redeem the properties,” said Evan P. Schmit, an attorney with Kerkman & Dunn representing SDC and SD Properties. 

Millions owed

Forward Community Investments, a community development financial institution, filed a foreclosure lawsuit in March against SD Properties Inc., the tax-exempt corporation that owns SDC’s buildings. The lawsuit claimed SD Properties defaulted on mortgage payments in 2024 and lists SDC as a guarantor.

On Monday, Milwaukee County Circuit Court Judge J.D. Watts granted a summary judgment for Forward Community Investments, which included a judgment of foreclosure against SD Properties and SDC and declared that Forward Community Investments is entitled to a money judgment. 

This judgment allows the foreclosure process to advance, according to Ryan Zerwer, the president and CEO of Forward Community Investments.

The total judgment amount owed by SD Properties was just over $3.1 million, as of June 16, according to court records. 

The lender’s complaint outlines that this includes $2.42 million in principal, interest and other costs for a construction mortgage SD Properties entered into in 2020 and $687,000 for an additional mortgage started in 2023. 

Additional accrued interest and other costs may be added to the tally before the properties are redeemed or sold. 

SDC moves out

SDC voluntarily vacated the 1730 W. North Ave. office and removed personal property, said Laura Callan, an attorney with Stafford Rosenbaum LLP, which is representing Forward Community Investments. William Sulton, SDC’s attorney, confirmed the agency moved out of both the office and the warehouse building at 1810 W. North Ave. 

SD Properties still owns a property on Teutonia Avenue that is not included in the lawsuit. 

Watts said that both parties have been cooperative. 

“This is, of course, a major event in the community, so I’m aware of the importance of this case,” Watts said.  

What’s next?

Wisconsin foreclosure laws require a redemption period, which will be for three months in this case. 

During this period, SD Properties has the chance to redeem the mortgaged premises by paying the total amount of the judgment and other attorney fees, costs and interest. 

“The board is gonna have to decide whether they want to try and redeem the building or not,” Sulton said.  

SDC is awaiting responses from the federal government on its status as a community action agency and Wisconsin departments on their audits. This is preventing the board from making decisions on the agency’s future direction and services, Sulton said. 

If the properties are not redeemed after three months, the Milwaukee County Sheriff’s Office will arrange a public auction or sale.

Schmit said a hearing to confirm the sale will be held after the redemption period, which would be the final opportunity for SD Properties to maintain the buildings.

“We will wait for the procedure for the confirmation of the sheriff’s sale, just to be clear,” Watts said.

---

Meredith Melland is the neighborhoods reporter for the Milwaukee Neighborhood News Service and a corps member of Report for America, a national service program that places journalists in local newsrooms to report on under-covered issues and communities. Report for America plays no role in editorial decisions in the NNS newsroom.

---

Jonathan Aguilar is a visual journalist at Milwaukee Neighborhood News Service who is supported through a partnership between CatchLight Local and Report for America.

Social Development Commission buildings in Milwaukee face foreclosure is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

Reading Time: 4 minutes

The Social Development Commission, or SDC, is facing new developments with its funding, board and lawsuits. 

Here is what you need to know. 

Questions raised about vendor payments, leadership at board meeting

Amy Rowell, executive director of COA Youth and Family Centers, attended the SDC’s board meeting on July 17 to ask the board about the status of an unpaid invoice. In March, NNS reported programming changes at COA, which serves families in the Amani, Riverwest and Harambee neighborhoods of Milwaukee.

Rowell said SDC owes more than $153,800 in reimbursements related to the Workforce Innovation Grant, which COA has requested from the agency multiple times since last August. 

“It’s been putting a pretty significant hardship on the organization because we paid the invoice and now we’re just waiting for reimbursement,” Rowell said. 

Jorge Franco, chair of the board and interim CEO of SDC, told Rowell that SDC would follow up with her but did not have an estimate of when the invoice would be paid.   

SDC Commissioner Pam Fendt thanked Rowell for her comments and voiced concern about Franco’s leadership.

“I would like to make a public statement at this time that I do not feel that the board has been staffed by the interim CEO in a way that allows me to have input on budget or funding decisions,” Fendt said. 

Commissioner Walter Lanier agreed, adding that the board should focus on how to govern more effectively. 

“I think it’s extremely high priority, top priority, for us to do that and I think we need to make some changes to make that happen,” Lanier said. 

Federal review of community action status

The Wisconsin Department of Children and Families in May planned to remove the SDC’s community action agency status, effective July 3. Removing that status would make SDC ineligible for millions in Community Services Block Grant funding and hinder the organization’s path to relaunch services and secure other funding. 

However, that decision is on hold while the U.S. Department of Health and Human Services, or HHS, conducts a review of the state’s hearing and decision-making process and evaluates if it followed federal guidance. 

The Department of Children and Families has sent documentation to HHS to examine for the review, according to Gina Paige, communications director for the department.

State moves forward with plans to replace SDC

The Department of Children and Families continues to look for agencies in the state that could possibly use the remaining block grant funding to be an interim provider of anti-poverty services in Milwaukee County if the state’s decision is upheld. 

“DCF has received applications from interested community action agencies and is currently in discussions with relevant parties,” Paige said. 

The state is preparing to move quickly to resume services if HHS upholds its decision and the de-designation is completed, she said.

“I think we’re likely going to see more of, like, the food services turned back on, probably some of the rental housing assistance, just because there’s some established networks there that folks will be able to leverage to get those turned back on,” Paige said. 

The department is requesting applications from existing community action agencies to serve the unserved county because of the Wisconsin CSBG State Plan, which requires the state to see if an existing agency can take over services before creating a new community action agency.   

Additionally, the future of the program is uncertain because President Donald Trump proposed eliminating CSBG funding in his budget for 2026. 

If Congress decides to continue CSBG funding, the state will consider starting a process to select one or more permanent community action agencies to serve Milwaukee County, Paige said.

Foreclosure hearing scheduled

A new motion in the foreclosure lawsuit against the Social Development Commission’s property corporation could result in a judgment by October. 

Earlier this year, Forward Community Investments Inc. filed a lawsuit against SD Properties Inc., the tax-exempt corporation that owns SDC’s buildings. The lawsuit resulted from SD Properties defaulting on mortgage payments on its North Avenue buildings, and it now owes over $3 million in loan obligations, interest and other costs, according to court records. 

In June, the attorneys representing Forward Community Investments filed a motion requesting a summary judgment hearing, which has been scheduled before  Circuit Court Judge J.D. Watts for 11 a.m. on Oct. 6 in Room 414 at the Milwaukee County Courthouse, 901 N. 9th St.

A summary judgment hearing asks the court to grant judgment in favor of a party based on the law without a full trial, according to William Sulton, SDC’s attorney. 

“That is something that is common in foreclosure cases and other cases,” Sulton said. “It’s not something that surprised us or alarmed us.” 

Before the summary judgment, there will be a scheduling conference in the case on July 24 at 9:30 a.m. in Room 414 of the courthouse. 

Board changes and vacancies

Milwaukee Area Technical College appointed Michael Rogers, MATC’s vice president of student engagement and community impact, to its seat on the SDC board. 

Commissioner Vincent Bobot’s term expired on June 1, but he remains as the chair of the SD Properties board. 

Bobot was serving his third term as an elected commissioner for SDC’s District 6, in the southern portion of the county, and briefly served as the agency’s CEO and board chair last fall. 

He said on July 17 that he is not sure if he plans to run for re-election.

Many appointments have been made to the SDC board in the last few months, but the board now has vacancies in all six elected board seats.

Lanier focused on filling vacancies, board consistency

Before the meeting, Lanier, the SDC commissioner, said he believes that working on the board’s governance, such as filling vacancies and holding elections to get community representation, will put the board in a better position to address the organization’s challenges. 

“​​I think once we finish some of our transitions and get the board fully active, the board will be able to be moved forward in a more effective way,” he said. 

SDC’s next board meeting is scheduled for Sept. 4. 

Money owed, pending reviews and lawsuits: the latest on Milwaukee’s Social Development Commission is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.