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Ex-mayor faces financial woes

Lake home on auction block, new partner for eatery

May 26, 2010

Former City of Pewaukee Mayor Jeff Nowak is facing major financial troubles as numerous properties he owns are being foreclosed on, including the former Pier 347 restaurant and his $2 million home on Pewaukee Lake.

The fate of the restaurant, now under new management, could be headed for receivership under a motion filed May 17 by the bank holding the loan.

According to lawsuits filed in Waukesha County Circuit Court, Nowak and his wife, Deborah, owe more than $4.5 million in loans. Waukesha County records show the couple owes more than $208,000 in back taxes. The Nowaks, who are divorcing, are named in two foreclosure suits brought by M&I Marshall & Ilsley Bank as well as a lawsuit over work on a swimming pool and spa at their lakefront home on Rocky Point Road.

The financial problems for Jeff Nowak, who was ousted as mayor in a recall election in November 2005, and his wife appear to have begun in 2006 or 2007, as they failed to pay taxes on a property they own on Park Avenue in the Village of Pewaukee and did not pay for improvements to their home in 2006.

Nowaks told to pay

Landcrafters Inc. of New Berlin filed a lawsuit Dec. 11, 2009, against the couple for work on a pool and spa at their home, W279 N2815 Rocky Point Road. According to the suit, the couple hired the firm in May 2006 but did not make any payments.

After the suit was filed, the Nowaks were served papers, but according to court records they failed to appear before a court commissioner. On April 8, the matter came before Judge Donald J. Hassin for a contempt of court hearing but the Nowaks failed to show up, leading Hassin to rule in favor of the company and ordering the couple to pay the firm $47,334 for the work, according to court records.

Former partner wants out

Also relating to 2006, the Nowaks did not pay taxes on a vacant parcel at 337 Park Avenue in the Village of Pewaukee for that year. The property is jointly owned with Thomas Pfister, 558 Kopmeier Drive, Village of Pewaukee.

Taxes have not been paid on the propertysince 2005, according to county records.

Pfister, a former village trustee, said he owns "a small portion of that property. I've been trying to get out of that for six years." Pfister said he has had little contact with Jeff Nowak over the past two years but is aware of his financial problems.

Pfister is named as a defendant in a foreclosure suit filed April 23 regarding that property. The suit also includes seven other properties listed to the Nowaks.

Neither Nowak nor his attorney, Dawn Drellos, returned a reporter's phone calls.

M&I Marshall & Ilsley Bank filed the foreclosure of mortgage suit that claims the Nowaks owed the bank nearly $2.8 million as of April 20.

The properties named are: Pier 347, 347 Park Ave., 357-359 Park Ave., 306 Oakton Ave., all in the Village of Pewaukee, N37 W26659 and N37 W26675 Kopmeier Drive, City of Pewaukee, 601 Ogdan Ave., Milwaukee, and W339 N5175 Road O, Nashotah.

Nowak and Pfister were business partners when they purchased the former La Chalet bar at 347 Park Ave. and converted it into a restaurant.

Pfister said that partnership was short-lived, and he has had nothing to do with it for about 9 1/2 years. Pfister said he was trying to get his name removed from the suit.

Bank seeks receivership

On May 17, M&I filed a motion for a judge to appoint a receiver to oversee the properties listed, as the Nowaks, Pfister and JEDE LLC, a corporation owned by the Nowaks, "are obligated to pay M&I under a variety of business notes and guaranties."

The defendants owe a total debt of $2,758,065 for the properties named in the suit. The amount owed by Pfister is not split out in the suit, though he is only associated with 337 Park Ave., and not any of the other properties.

Also, taxes have not been paid for 2008 or 2009 for all the properties, except the Odgan Avenue property, where taxes have been paid through 2008. Taxes for the 337 Park Ave. property though are owed from 2006, according to county records.

"The taxes on the properties are severely delinquent," the suit said, noting the total amount owed is $151,938.

Pier 347, now called Rum Bar, which opened this past weekend, is operated by Joseph T. Grasch of N37 W26655 Kopmeier Drive. Grasch said Nowak is his business partner.

According to court records, Grasch also is having financial difficulties, with foreclosure suits filed in Milwaukee County. Waukesha County records show Grasch owes $8,400 in taxes for 2009 for his Kopmeier Drive property.

Grasch said he could not comment on the situation at this time.

The taxes due on the restaurant stand at $39,665, according to records.

The suit said the last payment made to M&I by any of the parties was on June 30, 2009.

Lake home to auction?

A foreclosure action was filed Oct. 21, 2009, against the Nowaks home, W279 N2815 Rocky Point Road, and as of Dec. 16, the couple owed about $1.9 million on the roughly $2.4 million property.

According to the suit, there were 15 attempts to serve the Nowaks notice of the suit from Oct. 22 to Dec. 9, but no one answered the door, according to the suit.

M&I on Dec. 16 filed a motion for default judgment against the Nowaks, and Judge Ralph Ramirez ruled in favor of the bank. The property is scheduled to go for a sheriff's auction June 21.

Drellos filed a motion May 18 on behalf of the Nowaks, asking Ramirez to vacate the default judgment and issue a temporary restraining order on the sheriff's sale.

Drellos wrote that the Nowaks are divorcing, they do not communicate much, and Deborah Nowak lives part time in Florida.

Drellos also wrote that the Nowaks did not receive proper notice regarding foreclosure.

In an affidavit, Nowak said he was served the papers Nov. 5

The matter will go before Ramirez on June 2. No court date has been set regarding the other properties.

According to Waukesha County records, the Nowaks owe a total of $56,829 in taxes for 2008 and 2009 on their residential property.

Taxes on Nowak's business Direct Marketing Concepts in the City of Pewaukee have also not been paid for 2008 and 2009, totaling $54,195.

Checkered past

Nowak was mayor from 2001 to 2005, alderman from 1999 to 2001, and town supervisor 1998 to 1999.

Nowak has been involved in numerous controversies, including an election night party he planned in 2004 that led to an after-hours bar party; a reduction in property values that later led to the city assessor's firing; ordering a police report about Pewaukee for Better Government president Barb Whitcomb; and being discovered as a passenger in his car that was pulled over on suspicion of drunken driving. The car was owned by a firm Nowak was affiliated with. He lost a recall election in November 2005.


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