Council keeps Annie Wittenmeyer gap‑loan discussion open amid developer and transparency concerns

Annie Wittenmeyer family housing and a separate Timber Ridge senior housing loan request dominated the Davenport City Council’s Committee of the Whole on June 18, drawing extended public comment and questions from aldermen about developer history, the structure of gap financing and the city’s use of HOME and heritage funds.

The council did not vote to approve a financing package for the Annie Wittenmeyer proposal. Instead, Alderman Reinartz moved to place related items on the consent agenda while keeping the Annie Wittenmeyer loan financing item on the discussion calendar for further review; the motion passed. Staff described the council action as a tentative approval pathway but emphasized remaining dependencies on federal and state approvals.

Why it matters: The two projects are part of a cluster of low‑income housing developments that city staff said rely on Low Income Housing Tax Credits (LIHTC) and layered funding. Council members and multiple public commenters raised concerns about developer transparency and the structure of city gap loans — questions that could affect whether the projects move forward, whether the city provides HOME funding or uses one of its heritage funds, and how the city protects its financial interests if projects fall short.

City staff and the development team explained the funding mechanics and timeline. Bruce Berger, director of Community and Economic Development, said both Timber Ridge and Annie Wittenmeyer received LIHTC awards from the state and that staff were seeking to provide HOME funds as gap financing. Berger said Timber Ridge is “a $15,000,000 52‑unit new construction senior project” and that the recent agenda items were to “tentatively approve that loan subject to a number of things, which include the environmental review, funding availability, and a number of things that still have to happen.” Berger said LIHTC equity is often the primary engine that makes affordable housing projects feasible and that staff underwrite HOME loans so projects will cash‑flow rather than fail.

Public commenters pressed the council on developer vetting and the terms of proposed loans. David Ezra Citron called the Annie Wittenmeyer deal “so bad, so incompetent, and so corrupt” and read court reports and newspaper coverage alleging past liens and foreclosures involving developer Chris Ailes. Judith Lee, a Second Ward resident, told the council she believed the timeline and disclosures to aldermen and the public were inconsistent, and asked for more transparency about the loan terms and the planned use of heritage funds. Cheryl Shagnaugh and other residents said the proposed financing looked premature and described concerns that the council had not been given full information in a timely way.

Several aldermen pressed staff for concrete safeguards. Alderman Newton asked staff for examples of prior city loans using local funds rather than federal HOME dollars; Berger said the city has used local funds for housing incentives in the past but staff would return with details. Newton also asked about contractual “clawback” or recourse provisions to protect the city if a project fails; Berger said HUD‑funded HOME loans have underwriting requirements and clawback rules but federal rules limit the city’s ability to require personal guarantees, and making loans more recourse‑heavy could cause the private financing stack to collapse.

Alderman Reinartz framed the cost‑benefit case in stark numbers: he said the city’s direct investment in the Annie Wittenmeyer portion of the campus would be about $724,000, while stabilizing the historic campus with city funds could run an estimated $5–7 million upfront and cost roughly $200,000 annually to operate. Berger had earlier estimated multi‑million dollar stabilization costs and an annual operational gap for the campus.

Developer representatives said the project team includes an ownership and property management entity with experience in historic tax credit projects. At the meeting, Chris Ailes — described as a consultant on the project — and a representative identified the owner and operator as Brian Fritz and Pioneer Property Management; the consultant described himself as the project’s historic tax credit consultant.

What the council did: After extended public comment and council questions, Alderman Reinartz moved to place the Timber Ridge and related resolutions on consent and to keep the Annie Wittenmeyer loan financing item on the discussion agenda so staff can return with additional documentation. The motion carried.

Next steps: Staff were directed to provide more written detail to the council before the next meeting, including (as requested by Alderman Newton) a history of prior local‑fund loans for housing projects, a clearer list of the LLCs and principals involved in the current development team, and whether additional contractual protections (clawbacks, recourse language) could be included without jeopardizing other layers of financing. Councilmembers also asked staff to clarify which funding source would be used if HOME funds are not available in time—specifically whether heritage funds would be used to fill the gap and the implications of that choice.

Aldermen and residents repeatedly returned to transparency and timing: multiple speakers said they were surprised by the pace and timing of agenda disclosures and asked staff to improve information flow so aldermen can answer constituent questions more fully.