Nate Beck

USA TODAY NETWORK-Wisconsin

FOND DU LAC – Fond du Lac County approved a plan Tuesday to provide public incentives to developers of the troubled Retlaw Plaza Hotel.

The Fond du Lac County Board of Supervisors committed a $1.1 million low-interest loan to the Retlaw's developers, Legendary Hotels, a company formed by the Retlaw's managers, Steve Frantz and Dennis Doucette, voting 21-2 in favor of the plan.

Frantz and Doucette say they plan to transform the long-struggling downtown hotel into a luxury property. The developers have built a reputation of buying historic hotels across the Midwest, then piecing together public funding sources to develop the projects.

“There is risk, without question,” Supervisor Judy Goldsmith said. “So I know technically nothing is certain but death and taxes. Sometimes you take a chance when you’ve provided enough safeguards.”

Fond du Lac County’s loan agreement allows developers to avoid paying back up to $500,000 of the loan if the hotel creates 100 full-time jobs in each of the five years after it opens. The deal does not commit any public money to the project until the Retlaw opens its doors.

“Steve and I take this very seriously because there is a significant public subsidy, and you have every right to drill us," Doucette said. "We feel like we have put together a structure here that will be a blueprint for municipalities. We have a big stake we have utilized all of our personal resources, because we believe in it."

The county’s loan will be awarded as a percentage of the total project cost, so if the final cost of redeveloping the Retlaw comes in under budget, Fond du Lac County will commit a smaller slice, too, Buechel said.

"This development is important for downtown Fond du Lac," Buechel said. "The alternative is, it's going to stand empty again and we'll be back to where we were."

The Retlaw found a senior lender last week, Iowa-based Two Rivers Bank and Trust, to fund about $8 million of the $25 million project. Developers are still waiting on confirmation that they will receive about $6 million in historic tax credits, a key piece of financing the hotel that Frantz expects to secure in April.

General contractor C.D. Smith will finance a construction loan on the project, and the City of Fond du Lac will consider a $2.3 million Tax Increment Financing (TIF) incentive in coming weeks.

RELATED: New Retlaw owners plan overhaul of historic hotel

RELATED: Retlaw Plaza Hotel closes its doors

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Supervisor Thomas Dornbrook, one of two lawmakers who voted against the deal, said the project was "exciting" though voters in his district, near Brandon, likely wouldn't support the development.

"I’m probably going to vote no because that’s what my constituents would ask of me,” Dornbrook said.

The development is also a test case for a newly founded energy-efficiency incentive program.

The Retlaw project is among the first, and is expected to be the largest use of the Property Assessed Clean Energy Program (PACE) in Wisconsin, relying on about million in financing.

“We will be your poster-child for PACE,” Doucette said.

The board of supervisors launched the PACE program in Fond du Lac County last September, a loan from a private lender to a property owner for water and energy-efficient improvements to the property. Payments on that loan are collected through a building's property tax bills, as a special charge.

The hotel, however, has changed hands since Steve's brother Mike Frantz bought the hotel last summer.

At an auction, Mike Frantz used a loan from Iowa-based Barker Financial to purchase the Retlaw for $908,250. But as Mike Frantz struggled with another project — Green Bay's Northland Hotel — he was unable to pay the debt on the Retlaw.

RELATED: Northland developer has had successes, failures

So he signed the property over to Barker in November, ending his involvement in the project.

Barker approached Steve Frantz and Doucette with an offer to buy back the Retlaw. Steve Frantz said he and Doucette will do that, after they are able to secure financing for the project. Barker, also, will back the Legendary Hotels’ loans on the project, which has helped the group find financing, Steve Frantz said.

The Retlaw and the Northland should have been sister hotels, Steve Frantz said, but he and Doucette stepped away in April because of disagreements over the Northland's business plan. County officials say they were reassured by Mike Frantz's distance from the project.

"We have options (in Fond du Lac) because our business plan is very strong," Steve Frantz said. "We stepped away in April, that's when we moved our full force behind Fond du Lac."

Reach Nate Beck at 920-858-9657 ornbeck@gannett.com; on Twitter:@NateBeck9