“Barry Bloom, owner of Assured Power in Milwaukee, Wis., knew something was wrong last year in the late stages of a renovation project to create a new Radisson hotel in nearby Menomonee Falls. Four months after the soft opening, the general contractor filed a $2.8-million lien on behalf of the subcontractors. The hotel’s owners insisted that funds were still available to pay all of the subcontractors, but Bloom says he never received the last of his draws after work was done.
The Menomonee Falls Village Board, which provided a $17-million loan to the hotel’s owners so they could refit it as a Radisson franchise, has moved to foreclose on the loan since the developers missed the first two payments. Because the village’s claim for legal remedy outweighs that of the subcontractors, there is a possibility that the missing payments will never reach the contractors’ mailboxes. On June 25, Menomonee Falls named the subcontractors defendants in the foreclosure filing—because the Village and subs now are competing for the same funds.
Should village officials have seen trouble coming when the developer had legal problems early in the project? Or was Menomonee Falls taken in along with the subs by a financially-challenged development team?
One possible sign: The development group included two owners of a Wisconsin general contractor that was performing the renovation work, Gil-Her Construction, Inc., and one of the owners filed for bankruptcy about six months after the village approved the loan to the project.
So far, the subcontractors’ efforts to be recognized have gone unrewarded. The Village Board has responded to their publicity campaign only with a “no comment.” More than a year after the hotel began accepting guests, some subcontractors are waiting to see if the subcontractors will be compensated at all for what they are owed.”
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