PyraMax Bank FSB is seeking to foreclose on Lagina Plumbing Inc.’s headquarters in Milwaukee to collect $283,600 in debt on a loan, according to court documents.
Jim Lagina, who owns Lagina Plumbing and Lagina Properties LLC, which owns the headquarters building, declined to comment Monday.
Lagina Properties in March 2008 took out a $290,000 business loan from a PyraMax bank branch in South Milwaukee. The company has defaulted on the loan by failing to make payments, according to court documents filed by PyraMax.
In February 2007, Lagina Properties received a $196,000 loan from the Milwaukee Economic Development Corp., which PyraMax also listed as a party in the foreclosure case. PyraMax and MEDC, which provides loans to businesses on behalf of the city of Milwaukee, own a mortgage on the plumbing company headquarters at 3618 W. Pierce St. in Milwaukee, according to the documents.
Lagina moved into the headquarters building in March 2007 from a smaller building on Miller Park Way in Milwaukee.
PyraMax has asked a Milwaukee County Circuit Court to foreclose on the West Pierce Street property so it can be sold to repay the loan. PyraMax’s attorney, John Schreiber, was unavailable for comment Monday.
Jeff Beiriger, executive director of the American Subcontractors Association of Wisconsin, said he does not know the details of Lagina’s situation. However, he said, it is more difficult for companies to remain open during hard times if they must pay debts on properties or new equipment.
Contractors have a better chance of maintaining their cash flow — meaning they can use money coming in from new projects to continue operating — if they only have expenses related to projects, as opposed to debt payments, he said.
“The hope is that there is always another project around the bend,” Beiriger said, “and eventually you can get back on top of the hill.”
A letter circulated through the industry in mid-February claimed that Lagina Plumbing had closed because PyraMax refused to renew its line of credit. Jim Lagina at the time said the company had not closed, but has since not commented on the company’s situation. Jim Lagina and two Lagina employees were hired by Waukesha-based Mechanical Inc. in early March.
Calls to Lagina Plumbing’s headquarters on March 1 and again on Monday morning and afternoon received a recorded message that the office was closed for the day.
Companies such as Lagina that years ago saw opportunities to expand when the market was solid can have difficulties now that there are fewer work opportunities, Beiriger said.
“They’re good decisions at the time they’re made,” he said, “but circumstances change.”