Gummi Bears, Gilbane Building, and Getting Paid on Wisconsin Construction Projects
Recently, German candy maker HARIBO Group (HARIBO) announced construction plans for a factory in Wisconsin. According to one source, the factory “is set to become one of the largest confectionery facilities in the country creating 385 jobs then up to 4,200 ‘indirect jobs’ upon completion.” Construction is slated to begin by the end of 2020. That’s sweet! If you are contracted to perform work or supply materials to this delightful factory, don’t forget to secure your mechanic’s lien rights (I say this to be savvy not sour).
What We Know About HARIBO’s Wisconsin Factory
October 26, 2020, HARIBO announced it has selected Gilbane Building Company (Gilbane) as the general contractor. According to the press release, HARIBO selected Gilbane because “of the company’s extensive experience, breadth of knowledge and commitment to service.” And Gilbane will be responsible for “all construction and work-site management” on the 136.8 acre facility, which will be located at the southwest corner of 120th Avenue (West Frontage Road) and CTH C (Wilmot Road) in the Prairie Highlands Corporate Park.
“Phase 1 construction will include a 487,400-sq.-ft. production building with warehouse and administrative office spaces. The facility will have a three-story production area with an attached two-story building that will have offices for administrative work. An 87,866-sq.-ft., one-story warehouse building will connect at ground level to the production building by a 475-ft. passageway. Also, small utility buildings will be constructed, along with a gatehouse for truck traffic.” – Village of Pleasant Prairie
What We Know About Gilbane Building Company
In addition to the HARIBO project, Gilbane is a lead contractor (joint venture with the M+W Group) on Foxconn Technology Group’s construction of a manufacturing campus in Mount Pleasant, WI.
“Foxconn’s four-year construction project, [is] valued at $10 billion. It would create 20 million square feet of building space on farmland between Braun Road and Highway KR, on the east side of Interstate 94… The first phase will include a television assembly building estimated to be 1.5 million square feet, offices, parking structures, facilities for glass for Foxconn’s LCD screens, and water and energy plants.” – Milwaukee Business Journal
Gilbane is a large general contractor, touted as the 16th largest construction manager in the U.S. with 50+ offices. LienFinder data indicates Gilbane has been a party to over 100 mechanic’s liens in the last 12 months, with over $16,480,000 in claims since the pandemic shut down began in March. The liens have been filed on projects in California, Florida, Massachusetts, New Jersey, and Texas.
Private Commercial Projects in Wisconsin
Wisconsin is unique as its statute provides for three possible remedies when furnishing to private commercial projects: mechanic’s lien, bond claim, and lien on funds. Which remedy will be available for the HARIBO factory? Whether a bond claim or lien on funds will be available is determined by the contractual language between HARIBO and Gilbane.
If the contract between the owner and prime contractor contains a provision for payment by the prime contractor of all claims for labor, materials, or services furnished, and the prime contractor provides a payment bond, then lien rights against the property are eliminated for all claimants except the prime contractor.
As of this writing, a copy of the contract or terms of the contract have not been released, and it is unknown whether a payment bond is required for this project.
Secure Mechanic’s Lien Rights
Generally, there is no preliminary notice requirement for securing the right to a mechanic’s lien. The mechanic’s lien is a two-step process: notice of intent + mechanic’s lien. You should serve the notice of intent at least 30 days prior to filing the lien and you should file the lien within 6 months from your last furnishing. In the event you need to pursue suit to enforce your lien, you should file suit within 2 years from filing the lien.
Secure Bond Claim Rights
To secure your right to make a claim against the prime contractor’s payment bond, serve a notice upon the prime contractor within 60 days after first furnishing materials or services. Remember, if the project is properly bonded, no lien rights exist. Best practice dictates that this notice be served even when you are not aware of a payment bond. It is then recommended you serve a bond claim upon all parties within 90 days after last furnishing. If filing suit is needed, it should be filed within 1 year after completion of contract work.
Secure Lien on Funds Rights
Like the mechanic’s like, there is no preliminary notice requirement for a lien on funds. You should serve the lien upon the owner and any mortgage lender before payment is made to the prime contractor or subcontractor. The lien attaches to the unpaid funds. If neither the prime contractor nor subcontractor disputes the lien by written notice to the owner and the lien claimant, within 30 days after service of the lien, the amount liened shall be paid to the claimant on demand.
Enjoy the Gummies & Keep an Eye on Payments
This project is literally just beginning, and payment issues seem like a distant, impossible risk. But large projects take time and seemingly small payment hiccups can cause significant slow downs throughout the ladder of supply. Monitor this project and key parties for mechanic’s lien activity, payment issues, signs of insolvency, and of course, save some of the red Gummi Bears for me!