Developer sues Port for $4.2M over failed negotiations

Mequon developer Cindy Shaffer, whose plans to create a large subdivision on Port Washington’s far west side were lauded by officials initially but ultimately fell through after 17 months of negotiations, is suing the city for more than $4 million alleging it did not negotiate in good faith.

That, she says in the lawsuit, cost her about $200,000 in “hard costs” and a potential $4 million in profits she stood to make on the development.

Shaffer’s plan was to create The Farm, a 263-home subdivision on the city-owned Schanen farm at the corner of Highway 33 and Jackson Road — a development that would have included small, economically priced single-family homes and rental units within a walkable and neighborhood environment with traditional features found in the city’s neighborhoods.

The neighborhood, which would have included amenities such as community gardens, a hydroponic vertical farm, pollinator gardens and shared spaces, would have taken five years to build, she estimated, and attracted first-time buyers and empty-nesters.

It also would have brought in more than $1 million in tax revenue annually, the suit states.

Shaffer’s proposal was one of two submitted by developers for the 39.4-acre property, and the Common Council agreed to work with her in October 2023.

The lawsuit alleges that the two sides negotiated a purchase agreement that called for Shaffer to buy the land for $1 million, but it was contingent on the city and Shaffer approving a development agreement by a specific date.

Shaffer and the city spent nine months working on the agreement, with the deadline extended a number of times, the lawsuit states. The final agreed deadline of March 21, 2025, passed without an agreement being reached.

After a March 18 closed session, the council stopped negotiating “without any explanation or reason,” according to the suit, even through Shaffer had requested a deadline extension, the suit states.

“The city, in its refusal to act and refusal to provide any explanation to cease negotiations, breached the express and implied terms of the offer to purchase,” the suit states.

Shaffer contends the city was seeking “numerous unreasonable terms” in the negotiations.

In July 2024, the suit states, the city sent Shaffer a proposed development agreement that was “unreasonable in many respects.” Subsequent amendments proposed by the city “were always on the city’s terms,” the lawsuit states.

One significant dispute was a buy-back agreement that, Shaffer contends, would “effectively eliminate the possibility of securing funding for the project” and required “unreasonable costs.”

“No one will lend the $40 million-plus for construction on phase 1 when the city can buy it back for $1 million unless the city will agree to take over the loan with the repurchase,” Shaffer wrote in a letter explaining revisions she sought to the Common Council in March 2025.

The city never responded to her proposal, the suit states, refused to take any action and offered no explanation for its decision.

Shaffer again sought an extension, but the city declined.

During the negotiations, the suit states, Shaffer had secured the necessary approvals, permits, zoning and site plans, leaving the only hurdle the development agreement.

In an attempt to understand the decision, Shaffer development submitted an open records request seeking documents from the closed session but the city refused to produce some, citing attorney-client privilege on some requests and only providing materials already publicly available, the suit states. This, Shaffer alleges, is “directly contrary” to open meeting and records statutes. She is filing a complaint with the district attorney for these violations.

In addition to the $200,000 in costs she incurred and the $4 million in lost profits, Shaffer is seeking to recover her attorney’s fees.

City officials could not be reached for comment.