The Social Development Commission’s main office at 1730 W. North Ave. is one of the properties included in the foreclosure case. (Photo by Meredith Melland)
SDC has three months to recover buildings before the court can take further action, including selling the properties at auction
By Meredith Melland
This story was originally published by Milwaukee Neighborhood News Service, where you can find other stories reporting on fifteen city neighborhoods in Milwaukee. Visit milwaukeenns.org.
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.
The Social Development Commission’s main office at 1730 W. North Ave. is one of the properties included in the foreclosure case. (Photo by Jonathan Aguilar / Milwaukee Neighborhood News Service / CatchLight Local)
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, which 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.