Local and area contractors say they have not been paid for work done on Lawler School Lofts

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The former St. Mary’s Academy and Wyalusing Academy main building has been converted into Lawler School Lofts, a 40-unit apartment complex.

 

Commonwealth Development says they will make 

payments when due and consistent with legal obligations

By Ted Pennekamp

 

Numerous Prairie du Chien and area contractors who worked on the nearly completed $8.7 million Lawler School Lofts project are quite angry because they say they have not been paid in quite some time.

“I’m madder than hell,” said Steve Steiner of Steve Steiner Construction of Prairie du Chien. “There are a lot of contractors they’re not paying.” Steiner said there may be as many as 10 contractors who haven’t been paid everything they are due.

Steiner said Lawler School Lofts LLC, a part of Commonwealth Development of Fond du Lac, stopped paying him in August of 2018. Steiner said several other contractors now have lawyers who have told them not to say anything about the subject. He said the total that contractors have not been paid probably adds up to about $1 million.

Steiner said he and some other contractors contacted Commonwealth Development for an explanation but he said Commonwealth would not give a reasonable answer. 

“We would feel better if they would just give an honest answer,” he said. “We feel we’re getting ripped off.”

After not getting satisfaction from Commonwealth, Steiner said some contractors contacted State Senator Jennifer Shilling’s office for help. 

Four contractors also filed construction liens against Lawler School Lofts LLC. Two liens were filed in 2018 and two more in 2019. The liens were all released a short time after filing because there is a performance bond and a payment bond, the total of which is $6,0051,260, according to Crawford County Circuit Court records. Because there are performance and payment bonds, state law does not allow construction liens.

A performance bond protects the owner, Lawler School Lofts LLC, when a contractor doesn’t complete the work or otherwise does not fulfill the contract. The payment bond protects the contractor in case the contractor does not get paid by the owner.

If a contractor does not get paid, for example, the contractor can file a claim with the surety company that had underwritten the bond. The surety company would then investigate the matter, and if it is found that the claim is legitimate, the surety company would then pay the contractor. In turn, the owner would have to pay back the surety company.

It is not yet known by The Courier Press if any claims of this nature have been made by the contractors. It is also not known if Lawler School Lofts LLC has made any claims regarding any contractor’s performance.

Steiner says he is owed approximately $52,000. 

A construction lien for $85,000 was filed on Dec. 26, 2018 and released on Dec. 28, 2018 by Atkinson Excavating of Wauzeka, according to court documents. A lien filed on Jan. 24, 2019 by Rickleff Heating and Cooling of Prairie du Chien was for $27,249.15. The lien was later released. A lien filed on Jan. 8, 2019 by My PC LLC of Boscobel for low voltage wiring was for $14,543.33. The lien was released on Feb. 11, 2019. An $84,783.67 lien was filed on July 16, 2018 by Dynamic Contracting Services LLC of Maple Park, Ill. It was released on Jan. 31, 2019.

Lance Mueller, the general counsel of the Commonwealth Companies, said that some of the contractors who filed liens have been paid since August. 

“There are different reasons why others have not been paid, but the short answer is that payment is not due,” said Mueller. “Commonwealth will make payments when they become due in a manner consistent with its legal obligations.” 

Mueller also said, “Commonwealth is very proud of this project. The Lawler School Lofts serve an important area of need and will continue to have a positive impact on the community for many years.  The homes have received high praise from residents and we remain thankful for the opportunity to work in and with Prairie du Chien.

“Commonwealth enjoys an excellent relationship with the majority of those that have contributed to the construction and renovation process. Of course, there are those that have proved more of a challenge to work with as is the case with any project.”

Mueller said it is not accurate to suggest that funds are lacking or that someone is being ripped off.

Lawler School Lofts is a historic preservation and reuse project. Commonwealth Development utilized both federal and state historic tax credits. 

The financing of the project is relatively complex. The Wisconsin Housing and Economic Development Authority (WHEDA) allocated $512,777 in low-income housing tax credits to help finance the project. At the ground-breaking ceremony in August of 2017, Kevin McDonell, the vice president of development at Commonwealth, said that over the next 10 years, the tax credits will add up to nearly $5.13 million toward the project. The Wisconsin Economic Development Corporation and the Wisconsin State Historic Preservation Office contributed state historic tax credits of just under $1.5 million. U.S. Bank provided almost $6 million in equity. Chase Bank provided a construction loan of $6 million and a permanent loan of $654,000. Wisconsin’s Division of Housing provided for $468,000 in HOME funds. Associated Bank provided state historic equity of just under $1 million, and the Federal Home Loan Bank of Chicago provided for a $510,000 Affordable Housing Program Grant.

Lance Mueller of Commonwealth said the time it takes to get the state tax credits and federal funds has not had a direct impact on the timing of any payments to contractors.

Prairie du Chien Mayor Dave Hemmer said small, local contractors simply can’t afford to go without getting paid for long periods of time.

Lawler School Lofts is named after John Lawler, who, in the late 1800s, transferred railroad cars and passengers across the Mississippi River by ferry. In 1874, he created the pontoon railroad bridge that operated until 1961. He donated the land, once a part of the second Fort Crawford, to the Catholic nuns for a girls’ school in 1870. Lawler also contributed funds for the construction of St. Mary’s Academy, which educated young women for almost a century before it closed in 1968. It operated as Wyalusing Academy from 1969 until 2013 as a private school and residential facility dedicated to teaching students life, academic and job skills.

In 2014, River to Valley Initiatives (RVI) of Prairie du Chien, a non-profit corporation, was selected by the former property owner, Clinicare Corporation of West Allis, to develop the property to be a positive and sustainable entity. The directive was to preserve the historical integrity of the property and save it from demolition, while preserving the tax base. The 14-acre property was officially donated to RVI in July of 2015. In 2016, the Prairie du Chien City Council approved the rezoning of the property from R-1 (low density residential) to R-3 (high density residential). In July of 2017, RVI sold the property to Commonwealth Companies.

The project has been ongoing since late August of 2017 and is now nearly complete. There will be 40 apartments in the 80,000-square-foot building. There is also a 31-car garage in back of the building. Twenty-four of the apartments have tenants.

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