Milwaukee's legal troubles just got more expensive. Deputy City Attorney Naomi Sanders, who leads the city's litigation division, missed an Aug. 26 court hearing in a property tax dispute with SP Milwaukee PropCo 1, the owner of the Schlitz Park office complex, opening the door to a $511,651 default judgment against the city.
A proposed default judgment order was filed on Aug. 26, 2026, after Sanders did not appear, according to Minnesota Lawyer. SP Milwaukee PropCo 1 had contested the 2024 property tax assessments across eight properties at Schlitz Park, the former industrial complex of the old Schlitz brewery, arguing the city overvalued its holdings. The company specifically challenged the assessment of its primary office building, which the city pegged at $46,974,000 in 2024 but which the owner contends is worth no more than $43 million.
The city has denied the claim that the properties were incorrectly assessed. But if a judge rules in favor of SP Milwaukee PropCo 1, Milwaukee could owe the company $511,651. That figure lands on top of an already-approved default judgment tied to a separate case involving Regal Rexnord Corp., a manufacturing company that moved its corporate headquarters to downtown Milwaukee in September 2023.
A Second Costly Miss for the City Attorney's Office
In that earlier case, former assistant city attorney Kyle Bailey missed a deadline in a lawsuit involving Regal Rexnord, which had challenged its 2025 tax assessment on its downtown headquarters at 111 W. Michigan St. Regal Rexnord argued its tax bill should have been $699,618 based on a rate of $20.803 per $1,000 of assessed value, rather than the $1,531,116.26 the city assessed, and sought an $831,498 refund plus interest, as previously reported by Hoodline's earlier tax deadline report.
Milwaukee County Circuit Court Judge Paul R. Van Grunsven granted default judgment in that case on July 31, 2026, after the city missed a May 4, 2026 deadline to respond to the lawsuit. At a June 29 motion hearing, Van Grunsven rejected assistant city attorney Kyle Bailey's explanation that a new computer record-keeping system had caused the missed deadline, calling it “sloppy work” and saying he was not satisfied the technology issue justified avoiding default judgment. Bailey, who had worked on the SP Milwaukee PropCo 1 case as well, had issues meeting filing deadlines according to court records. He did not respond to a Journal Sentinel request for comment.
Bailey's Exit and Sanders' Long City Tenure
Bailey resigned in lieu of termination on July 15, 2026, before formally withdrawing as counsel from the Regal Rexnord litigation on July 28. He had been hired by the city in 2022 and earned approximately $93,000 annually. Sanders, by contrast, has worked for the city since 2015 and took over as deputy city attorney leading the litigation section in July 2024, after previously serving as chief of staff for the Milwaukee Fire & Police Commission. She earned $183,653 in gross salary in 2025. Sanders did not respond to a Journal Sentinel request for comment, and SP Milwaukee PropCo 1's attorney, Shawn Lovell, also did not respond to a request for comment.
Goyke Says Responsibility for the Fix Is His
City Attorney Evan Goyke, who took office in April 2024 after defeating incumbent Tearman Spencer with 63.3% of the vote, said a missed court deadline is a serious failure and that the responsibility to fix it is his. Goyke is now reviewing how the office tracks and manages litigation and has committed to holding the office to a high standard, though he could not address the SP Milwaukee PropCo 1 case specifically.
Mayor Cavalier Johnson called the missed Aug. 26 hearing a preventable setback and said he was highly disappointed. Johnson plans to have additional discussions with the city attorney about the office's handling of its caseload. The two mishaps together could cost the city more than $1.34 million, a liability that arrives as Milwaukee prepares its municipal budget, a burden the Heartland Post notes adds fiscal pressure on a self-insured city already managing large payout demands, including a $2.5 million police custody settlement recommended in November 2025.
What Happens Next
The city has five days to file a response contesting the default judgment order in the SP Milwaukee PropCo 1 case, an emergency window that mirrors the one the city attorney's office faces in trying to limit its exposure. Whether that filing succeeds in vacating or reducing the proposed order remains an open question, as does whether Milwaukee taxpayers will ultimately absorb the full $1.34 million combined hit during the city's upcoming budget assembly.
Goyke's tenure began as a promise to reform an office that saw heavy dysfunction under Tearman Spencer, whose single term included 14 staff resignations in his first 18 months and a $77,500 settlement paid by the Common Council in March 2024 to resolve a staff harassment claim, according to FOX6 News. Spencer's own legal troubles have continued to play out separately, as Hoodline reported on the Waukesha venue change earlier this year. The Milwaukee City Attorney's Office, established in 1846, operates with about 40 attorneys across four legal divisions handling civil litigation, code enforcement, and liability defense for city departments, according to the City of Milwaukee.
