Developer files $4 million claim against Port

Mequon developer Cindy Shaffer, who was selected by the Port Washington Common Council to create what was to be the largest subdivision in the community by buying the former Schanen farm, has taken the first steps toward filing a lawsuit against the city for breach of contract.

Shaffer filed a notice of claim with the city on July 2 alleging that the city breached its contract with her and violated the state’s open meetings and records laws in the process.

She is seeking $3.945 million in compensatory damages as well as actual damages and costs for the alleged breach of contract as well as a forfeiture for violating the open meetings law and not releasing records she sought.

The Common Council last week voted to disallow her claim following a closed session.

Mayor Ted Neitzke referred questions to City Attorney Matt Nugent, who declined to comment. Shaffer could not be reached for comment.

The filing of a notice of claim is typically a precursor to a lawsuit. Any lawsuit must be filed within six months of Shaffer being served with notice of the city’s action on the claim.

Shaffer’s proposal to create a development called The Farm — once touted as a creative and unique subdivision that would create much-needed affordable housing for the city — has been fraught since the Common Council selected her firm to develop the 39-acre Schanen farm at the corner of Highway 33 and Jackson Road.

Shaffer’s proposal, which included a mix of housing, green spaces and amenities such as community gardens, a hydroponic vertical farm, pollinator gardens and shared spaces, was selected by aldermen over one submitted by Neumann Development.

Officials touted the development as a unique subdivision that would provide needed housing that incorporated features from the community’s established neighborhoods but with a modern twist. 

“She responded to our request to do something very unique for our entrance,” Neitzke said, noting the development would clearly define the city’s western gateway.

Plans for the 263-unit development were approved by the city in February 2024, and in June the city and Shaffer executed an offer to purchase that required her to buy the land from the city for $1.04 million and set a timeline for a development agreement to be approved.

The claim states that the city sent Shaffer a “proposed (and frankly unreasonable) development agreement” in July 2024 and the two sides spent nine months negotiating the terms of the agreement.

There were deadline extensions along the way, with the city requiring a final deadline of March 21, 2025. 

While negotiations were ongoing, Shaffer continued to work on the subdivision, securing a number of approvals, permits and zoning.

But it wasn’t smooth going. In December 2024, the Plan Commission rejected a preliminary plat for the development, saying the plan was pedestrian, lacked creativity and did not incorporate enough single-family housing.

A revised plat was approved by the commission in February, but the two sides did not reach a final developer’s agreement before the city-imposed deadline.

The biggest holdup, according to the claim Shaffer filed, was a repurchasing requirement for the development that “would effectively eliminate the possibility of securing financing for the project.”

Following a March 18, 2025, closed session the city took no action on the agreement and offered no explanation, the claim states, and when Shaffer sought additional extensions to continue negotiations, the city refused. 

“After more than 18 months and significant time and expense, the city refused to negotiate in good faith as required by the express and implied terms of the offer to purchase, let the unilaterally imposed deadline lapse and then refused to take any action at all,” the claim states.

Shaffer’s firm spent about $200,000 on the development plans and “now stands to lose up to $3.945 million that it would have earned had it been allowed to pursue the development that the city approved,” the claim states.

The claim also alleges that the Common Council’s March 18 meeting violated the open meetings law because officials cited negotiating strategies as the reason for the closed session and previous sessions had been between the city and Shaffer.

When Shaffer sought the records of the closed session, the claim states, the city only provided public meeting minutes, saying many records sought by Shaffer did not exist or were confidential attorney-client documents.