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W-File: gh_rainbowsprings.html

Type: Ghost, Curse, Legend
Location: Mukwonago, Wisconsin

Source: Appeared in the Milwaukee Journal Sentinel on July 30, 2000.


Dream of Mukwonago resort collapsed as financing faltered

Story by Lorayne Ritt

Francis Jay Schroedel left his imprint on Waukesha County, developing subdivisions such as Imperial Estates and Camelot Forest in Brookfield, Regal Manors in New Berlin, and Embassy Estates in Menomonee Falls, among others.
 



He also built St. Paul's Catholic Church in Genesee Depot, which he regularly attended.

But his vision for an opulent resort and golf complex just west of Mukwonago, which he named Rainbow Springs, continues to haunt would-be developers who chase after the dream he nearly completed.

Today, willows weep over the covered bridge at the entrance to the resort. Along the main road, lamp posts that once held decorative antique gas lanterns stand among the pines he planted more than 35 years ago. Silhouetted against the sky to the west is the lodge on the shore of Rainbow Springs Lake, where the dream began.

As a boy, Schroedel attended St. Elizabeth's Catholic Grade School in Milwaukee. Some say he finished eighth grade; some say he didn't. It didn't matter, because he knew already that he would be a builder.

In the 1930s, he founded the Schroedel Construction Co. in Milwaukee. After World War II, he built apartment complexes in Whitefish Bay and Shorewood. So many postwar baby boom children were born in those developments that they became known as "Schroedel's Cradles."

Elm Grove builder Jim Cauley knew Schroedel in those days.

"He was a cocky guy," Cauley said. "He was way ahead of everybody in his thinking. He was a dreamer, and he had the guts to try it."

With a series of successful projects behind him and a net worth variously reported as between $20 million and $40 million, Schroedel came to the property outside Mukwonago, which was then a hunting preserve.

A former lodge on the lake that later burned was said to have been designed by Frank Lloyd Wright. However, Mukwonago businessman Harold Koeffler and former Municipal Judge Charlie Dewey doubt that. Both of them recall it as being nothing but a cabin.

Rather, the buildings that Schroedel would erect had more of the feeling of Wright design. His longtime friend Mike Sasso of Eagle quoted Schroedel as saying, "These buildings are made of stone and wood because that's what God put on this Earth." All of the construction at Rainbow Springs is fieldstone and wood painted Mojave brown.

On Dec. 31, 1959, Schroedel opened a new lodge on the shore of Rainbow Springs Lake with a gala New Year's Eve party. Guests ate dinner on fine china using sterling silver flatware. Featuring two dining rooms, a lounge, conference rooms, 42 guest rooms and an indoor swimming pool, the lodge served as the focal point for the new Rainbow Springs Country Club. Among activities available to members were skeet shooting, horseback riding, tennis and water skiing.

By March 1962, Schroedel had designed and was beginning construction of an 18-hole golf course. He intended to complete it in 100 days, but weather interfered and it took 143. National publicity followed this feat, which became known as the Miracle of Mukwonago. As the first course, which he named Big Moraine - or Big Mo - was being developed, he started a second 18-hole course dubbed Little Moraine - or Little Mo - for those wanting less of a challenge.

One year later, in April 1963, Schroedel disclosed plans for a new lodge or clubhouse. Covering 50,400 square feet, the A-frame building would have a central lounge featuring a 135-ton fieldstone fireplace soaring 55 feet. In addition, there would be a dining room with seating capacity of 400, two banquet and meeting rooms that could accommodate 700 people, and a separate party room for Very Important Members.

Even as this facility was taking shape, Schroedel decided a hotel would set off the facility - which now included just under 1,000 acres. A 756-room series of interconnected buildings, stretching over a quarter of a mile and accommodating 1,600 guests was constructed. To amuse guests, a lower level Carnival Street was built, including bars and shops where furs, jewelry and everything to delight the visiting convention-goer could be purchased. Only the finest building materials were used, right down to the finish hardware of solid brass.

The final addition to the complex - a 90,000-square-foot conference center featuring a 24,000-square-foot exhibit hall - began. Schroedel hoped it would compete with Chicago's McCormick Place.

At the end of 1965, a newsletter sent to Rainbow Springs Country Club members spoke of the resort's completion in 1966. The Women's Western Invitational Golf Open was scheduled to be held in August of that year, and Schroedel saw that event as a way to christen Rainbow Springs Resort and Convention Center.

But the financing to finish the complex dried up. The tournament was held, but the resort was not able to accommodate the players, so they were transported back and forth from East Troy and Lake Geneva.

As each subsequent year approached, Schroedel felt confident he would find the money necessary to complete the resort. Friends encouraged him to open the parts of the complex that were completed. A $150,000 stainless steel kitchen as well as dining rooms in the new lodge were complete.

"The pilot lights in the stoves were lit," Cauley said. "But he wanted a big grand opening of the entire complex like Wisconsin has never seen. He said Frank Sinatra would perform at the opening."

Everyone who knew him agreed that he turned down offers of financing during this time because he did not want a partner, much less someone who would take over controlling interests.

In the meantime, although no furnishings were purchased for the resort, Schroedel told Mukwonago resident Dewey that he planned to build barracks for Jamaican families he would bring there to work at the resort. In addition, he planned to erect a three-story, 238-room dormitory for 576 students from UW-Whitewater who would live there and receive credit while working for Schroedel. None of that came to pass.

In June 1971, Marshall & Ilsley Bank sued Schroedel and his wife, Anita, for $8.7 million. The bank contended that the Schroedels were in default on notes for loans taken out during the previous six years. The notes were secured by mortgages on Rainbow Springs.

Reports circulated that Schroedel had invested $12 million of his own money in the project over the years, but he again sought outside financing to tide him over. He believed that federal tight money policies in 1966 were the start of his problems.

His efforts to stave off foreclosure were unsuccessful, and in March 1973, Waukesha County Circuit Judge William E. Gramling awarded title of Rainbow Springs Resort to Marshall & Ilsley Bank for $6 million after a sheriff's auction. Schroedel claimed the property was worth $11.7 million. Other subdivisions and vacant tracts of land in New Berlin and Menomonee Falls were awarded to M&I Bank, which bid $3,425,000 for them. Schroedel claimed these parcels were worth $7 million.

In his ruling, Gramling wrote that the bids did not "shock the conscience of the court," the requirement needed before bids taken at a public auction can be set aside. By the end of March, Schroedel had prepared an appeal of the sale through attorney Eugene Kershek of Brookfield, saying that the bank's bid for the property was far less than its actual value.

In November 1973, time ran out. Waukesha attorney James D'Amato, who had been designated by Schroedel to arrange refinancing, said that a $15.5 million loan had been negotiated with a Chicago bank. But when the bank did not provide a letter of credit, M&I refused to accept the deal, D'Amato said.

Edward I. Van Housen, executive vice president of M&I, said of D'Amato's claims, "We've had lots of words but no substance." Shortly after, Waukesha attorney James Caldwell, representing Schroedel, threatened a suit charging that M&I failed to honor a letter of credit indicating that a $15.5 million loan had been negotiated to recover the property.

All of this came to naught. The ban on the sale was lifted and M&I Bank became the title holders of all the holdings Schroedel had pledged in order to finish what he called "his masterpiece" - Rainbow Springs.

The final episode came when Schroedel, who lived at the resort with his wife, did not leave the property. Authorities sent Sheriff's Deputy Bob Kavanaugh to escort him away.

According to Dewey and Koeffler, if a local man had not been sent, Schroedel never would have gone.



Source: Appeared in the Milwaukee Journal Sentinel on Aug. 6, 2000.



'Curse' of Rainbow Springs has kept resort's doors shut

Story by Lorayne Ritt

Last week I began a review of the late developer Francis Jay Schroedel's impact on Waukesha County. The largest of his projects, Rainbow Springs Resort five miles west of Mukwonago, was his undoing. In 1973, Marshall & Ilsley Bank foreclosed on the property.

When Schroedel left Rainbow Springs, he went to live at the Kettle Moraine Inn in Eagle. "He never realized it was over," said Mike Sasso, Schroedel's friend and owner of the hotel. "He would say, 'Just give me another month.' " Every day he dressed in a suit, white shirt and bow tie, according to Sasso. Because there were no telephones in the motel, Schroedel set up his office in a corner of the barroom where the phone was located. "One day he called Lloyd's of London three times," Sasso said.

Even before M&I Bank took title to Rainbow Springs in 1973, there were rumors of possible sales. In 1972, a spokesman for ITT Sheraton in Boston said there had been preliminary discussions about purchasing the property, but nothing materialized.

With much fanfare, M&I Bank announced in 1975 that a New York real estate firm, Launder Associates, would market the resort exploring a number of potential uses. One was as a retirement village, another as a lay-religious retreat and still another as a resort or recreation-oriented community. Note was made that the resort was being offered at 25% of the estimated $30 million it would cost if were being built brand new at that time.

There were no takers.

One year later, in 1976, Francis Schroedel died at the age of 67.

He had many friends and still does to this day. They agree that he tried to get the money to open the resort right to the last day.

"But he put a curse on it," Sasso said. "His words were, 'If I can't open it, no one will.' " Although the golf courses have operated since Schroedel built them, the lodge, the hotel and the conference center have never been occupied.

In 1977, the first of several abortive attempts to sell the property began. A company called Cal-Am of California, an affiliate of King's Point of Encino, offered to buy the resort from M&I for $4.8 million. They made a down payment of $1.2 million but failed to complete the sale by a December deadline. The following year the federal government proposed turning the resort into a Job Corps center. Local residents objected, imagining something resembling a prison on the property. The plan died.

Later that year, a flamboyant Harvey P. Jones of Clearwater, Fla., stood before a crowd of 160 people at Mukwonago High School and told them his company had an unconditional contract with M&I Bank to purchase the resort for more than $4.2 million, but he refused to quote the exact dollar amount. On stage with him were an entourage of associates. He described them as "Midwesterners on temporary assignment in Florida for the last 10 years."

Jones planned condominiums for the resort. Every last detail had been envisioned by Jones - including a new name for the complex: Brynwyck. To prove the seriousness of his intentions, he passed out samples of stationary with the name Brynwyck emblazoned on it. Although purchasing the stationary came easy, the rest of it did not. Harvey P. Jones and Associates never followed through on their plan to purchase the resort.

Finally in September 1985, M&I found a purchaser; actually, two of them. Consolidated Resources Health Care Fund of Atlanta bought 54% and Rainbow Springs Investment of Las Vegas purchased 46%. Together they paid $5.7 million. Plans were announced to open a health spa, but that dream never materialized.

In 1987 the two owners said they'd reached an agreement to sell the property to M.D. Development Inc., of Woodburn, Mass. Full of enthusiasm like so many would-be developers in the past, Mike Garfield, project coordinator of M.D., announced the complex would open as a hotel resort and conference center within one year. "Call this the final chapter to the story of Rainbow Springs," he said.

Garfield also revealed a new name for the complex. He combined the names of Chicago, where he expected a lot of customers to come from, and the name of its location, Mukwonago. Chiconago Country Club was their idea. Although these people didn't pass out stationary with their new name, their dreams were similarly dashed when financial problems caused them to break the purchase agreement.

By 1989, the minority stockholder in Rainbow Springs - Rainbow Springs Investment of Las Vegas - filed for Chapter 11. In 1990, the U.S. Bankruptcy Court gave the two owners of Rainbow Springs, Consolidated Resources and Rainbow Springs Investment, three years to sell the property. Consolidated Resources, the majority owner, claimed that Rainbow Springs Investment owed it $8 million. Therefore, Consolidated was to receive 62% of the sale proceeds.

Four years later, auction details were announced. On Jan. 31, 1994 at 10:30 a.m. in the Milwaukee Athletic Club, the sale would take place. When word spread that the Oneida Nation was considering a bid on the resort, Tribal Chairwoman Dixie Doxtator said they were considering converting it to a Native American cultural center. Gambling was not in the picture, she said. In referring to the property, David S. Gronik, the auctioneer said, "It's all there. All the buyers have to do is turn the lights on and get it cranked up."

Two weeks before the auction, a Town of Mukwonago official announced that Rainbow Springs owed more than $1 million in back property taxes. Another prospective buyer was also disclosed. A Crystal Lake, Ill., developer had made inquiries on behalf of the World Order of Churches.

Although there were nine registered bidders on the day of the auction, only two of them actually bid. They were William Schuett Sr., president of Security Bank, who registered to bid as an individual, and Golden Ocala Golf Course Partners of Ocala, Fla. With a bid of $4.2 million, the Ocala group bought the resort. Partners were listed as Allan Feker, his wife, Peony, her brother Hock Seng and Manoucher Sarbaz, president of PICO Investments of Los Angeles. PICO was the parent company of Ocala.

In May of that year, Allan Feker came to the resort and outlined his ideas for bringing the entire complex back to life. Although the two golf courses always operated, Feker spoke of developing a rustic sports resort with 1994 conveniences. "Cross-country skiing could be as good a business as the golf business," he said. Architects were working on plans to remodel the 60 unit hunting lodge on the lake.

Plans also called for 130 rooms of the main building to be remodeled and used as a hotel along with the kitchen facility. The remaining rooms would be converted to time-share condominiums or apartments. For those who remembered the plans of Francis Schroedel, these words of Feker were most interesting: "Just walking around the project and seeing how much foresight the builder had, I have so much admiration for him. The population wasn't here. He was 30 years ahead of his time. That's the only thing he did wrong."

By February 1996, reports surfaced that Rainbow Springs Golf Co. Inc. was two years delinquent in paying its property taxes (but the taxes, as of the date of this column, have been paid). Plans to install sewer services from the Village of Mukwonago were stalemated when Feker, after putting up a deposit of $50,000, refused to sign an agreement to pay the full cost of the project. The Town of Mukwonago had borrowed $2.85 million to pay for the service, which Feker would repay through special assessments on his property tax bill. The original self-contained sewerage system built by Schroedel in the 1960s and approved by the DNR was no longer operable.

Also in 1996, it was disclosed that PICO was no longer involved in Rainbow Springs and that Feker, his wife and her brother Hock Seng now own the resort as the Rainbow Springs Golf Co. Inc.

Feker once estimated it would take $20 million to restore the main lodge and convention center.

And so with the potential of Rainbow Springs still unrealized, the question of why the original developer could not complete the dream begs to be answered.

In 1988, Steve Woll, former executive director of the Milwaukee Metropolitan Business Association, said, "A visionary he was, but Francis was also bullheaded. From what I know, he received three opportunities to help him out of his financial woes. . . . However, Francis was a man of grand style. He wanted to open the complex all at once and he just didn't have the financial resources left to do it."

Many of his fellow builders and developers feel that M&I Bank took so much of his other property at the foreclosure auction of Rainbow Springs in 1973 that he could not recover.

"Before that, everything he touched was successful," said Jim Cauley, a builder from Elm Grove. "He never dreamed he could fail."

The tragedy of one man's loss, the effect on his family, and the still undeveloped complex hangs in the air at Rainbow Springs where the willows weep over the covered bridge at the entrance.

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