Nomad operator was to get $750,000 city grant for new coffee shop. He owes $6,000 in unpaid taxes

A Milwaukee tavern operator who planned to lease a city-owned building for his new coffee shop − aided by a $750,000 city grant − owes the city more than $6,000 in overdue taxes.

That wasn't discussed at a recent Common Council committee meeting where the lease was reviewed.

Michael Eitel dropped plans for a Nomad Coffee Bar in downtown's new Vel R. Phillips Plaza after disclosure at that meeting of his separate court battle with Turner Hall's owner.

Eitel's company, Caravan Hospitality Group LLC, was to operate the coffee shop at the plaza building through a lease recommended by Mayor Cavalier Johnson's administration.

That three-year lease, with a minimum monthly rent of $5,000, included a $750,000 grant for the 2,900-square-foot building's interior improvements and fixtures. The lease was endorsed at a Jan. 18 Redevelopment Authority board meeting.

Lease delayed after Turner Hall dispute revealed

The Common Council's Zoning, Neighborhoods and Development Committee on Jan. 30 delayed acting on the lease.

The decision came after committee members learned Turner Ballroom Preservation Trust Ltd., which owns Turner Hall, 1034 N. Phillips Ave., has a $95,734 judgment pending against Eitel's Barcity Club LLC, which operated a restaurant there.

Eitel's group stopped paying rent in October 2019 and was later evicted from Turner Hall, Art Heitzer, trust board president, told the committee.

Heitzer said the trust has been unable to collect the judgment because Barcity Club has no other assets. Heitzer said the trust's lease didn't have a personal guaranty from Eitel − which he said the city's lease should include.

The committee was to meet on Monday to review a revised lease with a personal guaranty. That meeting was canceled after Eitel on Friday dropped his plans.

The Milwaukee Journal Sentinel then learned through an online public records check that the City of Milwaukee has held a $6,011 judgment against Caravan Hospitality since October 2021.

The amount owed includes penalties and interest, according to Milwaukee County Circuit Court records.

That unpaid bill stems from a lawsuit the city filed against the company for delinquent personal property taxes tied to Nomad World Pub, which Eitel operates at 1401 E. Brady St.

Another company operated by Eitel sold the Nomad pub building in 2019 to a Chicago group, Gnome Brady LLC, which pays the real estate property taxes.

Department of City Development officials didn't mention the delinquent tax debt at the zoning committee meeting.

"I would assume as part of their due diligence this would have been brought to our attention," Ald. Michael Murphy, committee chair, told the Journal Sentinel. "I’m shocked it wasn’t."

DCD officials apparently didn't know about the unpaid debt until after the committee meeting, said Jeff Fleming, Mayor Johnson's director of communications and public engagement.

Fleming said the department would have done further research and learned about the court judgment prior to executing a lease.

The lease, which would have needed Common Council approval, would not have been executed until Eitel paid off the judgment, said Fleming and Madison Goldbeck, the department's marketing and communications officer.

The department doesn't "do a deep dive" of research on prospective tenants earlier in the process, Fleming said.

Other options for new building under consideration

Meanwhile, the city is considering its options for the building. The plaza is under construction at 401 W. Wisconsin Ave. and will open this summer.

Eitel, asked when he'll pay the delinquent tax bill, said he's discussing that with his attorney "so we can determine the best path forward to resolving this matter."

Court records show Caravan Hospitality also owes $12,680 in overdue taxes to the Wisconsin Department of Revenue. That's according to three tax warrants filed by the department dating to December 2022.

The company has paid off nine other state tax warrants, filed in 2021 and 2022, totaling $27,268.

Eitel's other businesses include SportClub, 750 N. Jefferson St. Also, Caravan Hospitality in November opened Barrel Burrito Co. and Experts Only Apres Bar, at 782 N. Jefferson St.

Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram, X and Facebook.

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This article originally appeared on Milwaukee Journal Sentinel: Nomad pub operator was to get $750k city grant. He owes city $6,000