Employees of Banner Tool & Engineering filed complaints March 24 with the US Department of Labor and the Wisconsin Department of Workforce Development against the owners of the stalled company over unpaid wages and insurance claims.

Problems with the company, and struggles being faced by the tool & die industry in Wisconsin, were noted in an April 12 story in Small Business Times.
According to the complaints, owners Keith Akers and David Leist had canceled employees’ self-funded insurance coverage in January. The claim alleges that, in violation of the federal Employee Retirement Income Security Act, which regulates self-funded plans, employees were not told they no longer had coverage, and continued to pay the premium while unpaid claims dating from as far back as October of 2001 started to accumulate.
Employees are seeking $67,188.51 in unpaid claims and fraudulently collected premiums.
The employees are also seeking $54,274.82 in unpaid wages and vacation. Overall, employees hope to collect $206,318.78 from Leist and Akers.
Leist and Akers were equal co-owners of the company according to a former employee. Akers served as treasurer and was primarily responsible for the finances. Akers has since filed for personal bankruptcy. Leist served as president of the company and dealt with customers and prospects.
Banner Tool & Engineering is not the only company in dutch with its employees over back wages. The Department of Workforce Development has filed liens against the following companies within the past year:

JL Business Interiors of West Bend (www.jlbusinessinteriors.com) has been named National School Lines’ exclusive dealer in southeast Wisconsin. Based in Omro, Wis., National School Lines is a leading national manufacturer of quality furniture and accessories for the classroom.

"We’re excited about our new dealership status because it means that school administrators now have more price-competitive choices" in what had been a rather slim business niche, says JL Business Interiors owner, Jeff Lambie. "We feel that offering choices is critical today, in an era of tightening school budgets."
Lambie explains that the move also represents the expansion of JL Business Interiors’ focus, to the institutional side of the business. Says Lambie, "Our years of success in business interiors naturally led us to serve institutional clients in our area. When we considered the potential of that market segment, it made sense to expand in that direction."

In an expansion of its consulting services, Organization Development Consultants, Inc. (ODC), of Brookfield has collaborated with idTools, inc., a Brookfield-based technology services firm, to begin offering web-enabled tools and services. The result is a new Web-based software application called "idTools/hpmi" for "Human Performance Management Inventory" that allows companies to manage, conduct and analyze employee performance assessments through a secure system.
Commenting on this initiative, Dr. Daniel Schroeder, executive vice president of ODC said, "Information about employee performance is expensive and time consuming to collect, and management may lack the internal resources to effectively collect and interpret data relating to employee skills. Existing employee performance evaluation tools generate reports that are complex and difficult to understand. We saw this as an opportunity to expand our existing management development consulting practice by providing a web-based solution that captures our decades of advice and experience, and makes it available to our clients."
(Schroeder is a regular columnist for Small Business Times, writing on personnel and human resources issues.)
Dr. Michael O’Neill, president of idTools, said that "Our current offering, while successful, has been focused on survey and data analysis tools for Facility Managers. These tools include a "work practices" system that analyses employee needs around workspace layout and design, an "occupancy satisfaction" tool, and a "vendor service quality assessment" tool. Partnering with ODC was a sound business decision from our perspective because it lets us expand from our current market – but keeps our focus on serving the needs of internal service and support groups of organizations."

Benefits 2000, of Brookfield, has changed its named to The Flex Company of America. The new name reflects the organization’s focus on its core business of flexible benefit plan administration, said Barbara Baade, company president.
"Obviously, our business focus has evolved and sharpened over the past 15 years," Baade said. "Simply put, our name no longer reflected our main service offering of flexible benefit plans and other plan administration."
The company engaged focus groups and other research for the name-change process. "We found of old name to be a barrier for clients and prospects to understand who we are as an organization," Baade said.
The company employs 17 full-time and two part-time persons.

Advertising Consultants for Business has opened in Cedarburg, offering services to firms that want to develop in-house advertising departments.
ABC offers direct consultation or workshops that teach the how-to basics of creating ads, brochures, press releases, Web sites, production and other areas.
Robert Cote of Chicago and Sal Grasso of Cedarburg are the company founders, and aim to focus on the Milwaukee and Chicago markets. They can be reached at 262-375-1051.

Former Stark Images minority partners John Halusan and Jim Lunde have purchased the Milwaukee company from its former majority owner. Halusan and Lunde are now equal partners in the multi-million printing services operation.
Hulasan will assume the role of president and CEO while continuing to oversee the sales and marketing functions. Lunde will remain as vice president of operations and production.
Stark (www.starkimages.com) recently purchased a Heidelberg two-color press and a Heidelberg Quickmaster DI digital four-color press.

Malcolm Group, a $34 million company with a variety of subsidiaries including Malcolm Marketing Communications in Racine, has acquired Battista & Co. , a marketing and advertising agency in Madison.
Battista, which has been in business for nearly 25 years, is expected to bring in more than $3 million in capitalized billings for the Malcolm Group this year. Bob Battista will serve as vice president of marketing services for Malcom’s Madison office.

Automatic Fire Protection, Inc., of Brookfield, has acquired two more fire protection companies in Wisconsin: Arrow Fire Protection in Arbor Vitae and the Fire Protection Division of Per-Mar Security Services in Janesville, Lake Geneva and Delavan, and Rockford, Ill.
AFP’s 21st and 22nd acquisitions broadens and expands its business and customer base in northern Illinois and Wisconsin, according to Tim Bell, president of Automatic Fire Protection.
Automatic Fire Protection, an ISO-9000 certified company, provides a line of equipment and services, including automatic fire sprinklers, fire extinguishers, kitchen hood and duct fire extinguishing systems, fire detection and alarm systems, customized suppression systems including "clean agents," emergency and exit lighting, and fire safety training programs.

SEEK, Inc., has launched Guardian HealthStaff as a separate company, devoted to staffing in the health-care industry.
The company is specializing in the placement of registered nurses, licensed practical nurses, medical technicians and certified nursing assistants.
The firm was started by SEEK CEO Carol Schneider and Kimberly Noon, who previously led SEEK’s South Region.
Guardian HealthStaff is based in downtown Milwaukee.

American Linen Co., which has operations in Milwaukee and Wauwatosa, has changed its name to Alsco. The company, based in Salt Lake City, is a global provider of textile services, including restaurant and medical linen supply, uniforms and cleanroom services.
It has Wisconsin locations at 10th and North in Milwaukee and just north of 124th and Capitol Drive in Wauwatosa.

April 26, 2002 Small Business Times, Milwaukee

Darian Luckett is the new executive director of The Business Council, an arm of the Metropolitan Milwaukee Association of Commerce that focuses on Black-owned businesses. Luckett had been with M&I Bank, which he joined in 1993 as a mortgage loan officer.
Ted Falk has joined the Gustave A. Larson Company in Pewaukee as credit manager, replacing Kathy Laska who retired after 24 years with the company. In 1998, Falk was named Credit Executive of the Year by the Wisconsin Credit Association and serves on its board of directors. Falk comes to the Larson Company from First Supply in Madison.
Mutual Savings Bank recently hired Kathryn Menger as a a new bank office manager to provide support to its metro Milwaukee bank offices. Menger has held the positions of loan specialist and personal banker. She had been with M&I Bank and North Shore Bank.
Tom Berry has joined Promo540, a promotional products and brand marketing company, in its Kenosha office. Tom had previously been the director of business development and marketing for the Milwaukee advertising agency, Versant.
Silvia Masini has joined Capital H, Inc., as managing director for its Milwaukee office. Headquartered in Milwaukee, the professional services firm provides complete human resource (HR) services to large, medium and small organizations. Masini was most recently a principal in the Chicago office of William M. Mercer, Inc., a global HR consulting firm. Masini also has prior HR experience as vice president of human resources for Alternative Resources Corp., an IT services company in Barrington, Ill. She holds a B.S. degree in political science from Northwestern University.
Paul Pebley has joined Versant, a Milwaukee marketing communication agency, as executive vice-president – client marketing solutions. He leads the account services group to develop marketing strategies that meet client business objectives, and also helps direct employee recruitment and retention efforts for Versant clients. Prior to joining Versant, Pebley had a 20-year sales and marketing career in the hospitality and health-care industries. He was responsible for various marketing and branding activities at local, regional and corporate levels. He served for three years as senior vice-president of marketing and sales for Alterra Healthcare, where he was responsible for establishing and managing the Alterra consumer brand identity in 28 states and 475 locations. Prior to Alterra, Pebley held various positions with Hilton Hotels Corp.
Versant has added several other new employees. Mike Dooley comes to Versant as a senior art director after eight years as director of design and publications for the Milwaukee Art Museum. He formerly served as an art director for Milwaukee Repertory Theater. Laura Stewart has been named associate producer. She has done freelance work in Milwaukee, Chicago and Vienna, Austria, and has worked on feature-length films. She directed, shot and edited a project that appeared in the Wisconsin Film Festival last spring. Ron Perszewski was appointed public relations manager to help lead Versant’s growing PR business. The former journalist has served a wide range of client accounts during six years in public relations.
Lisa London has joined Trainor/Frank & Associates as senior consultant to the recruiting firm. She has more than 10 years of sales and recruiting experience.
Rick Vanderkin has been appointed director of operations at Raabe Corp. in Menomonee Falls. He joined Raabe in 1979 as a store manager for the North Avenue retail location and was promoted to production manager in 1986 before being named manufacturing manager in 1996.
John T. Gall has joined Wachtel Tree Science & Service in Merton as special projects coordinator. Gall has been in the green industry for 28 years and is a certified arborist. He holds a master’s degree in urban forestry from Purdue University.
Steve Wilcox has joined Brady Marketing Group in Menomonee Falls as public relations director. He had been a managing director in Hill and Knowlton’s Chicago office, and holds a master’s degree in journalism/PR from Northern Illinois University in DeKalb.
Laura Petak has been hired as sales/marketing coordinator for The Fish, radio 105.3 FM in Milwaukee. She had been an international sales representative for NexWatch. She is a 1995 UW-Stevens Point graduate.
Heidi Schaible has been promoted to the position of human assets coordinator for the US headquarters of Fontarome Chemical, in St. Francis. She joined the firm in 2000.
Jerry Schlitz has been promoted to the position of vice president and senior commercial banker at Park Bank. He will work out of the bank’s office at 76th Street and Capitol Drive in Milwaukee. Schlitz has been with Park Bank’s downtown location since he joined the bank in 1994, and has been in banking since 1987. He graduated from the Graduate School of Banking in 1999 and also holds master’s and bachelor’s degrees in business administration from UW-Whitewater. Also, Park Bank has hired Amanda Rossbach as investments manager, based at the bank’s Brookfield location. She had been with M&I Northern Bank.
April 26, 2002 Small Business Times, Milwaukee

Jeff Jaroczynski has been hired as a new auditing supervisor at Mutual Savings Bank at its headquarters in Brown Deer. Jaroczynski comes to Mutual after serving as an audit/credit administrator and compliance officer at Bank of Elmwood. Jaroczynski is a graduate of the University of Wisconsin-Milwaukee, where he earned a bachelor’s degree in finance and accounting.

Amy Foulks has joined KS Consulting, a division of Kahler Slater Architects in Milwaukee, as marketing coordinator. Foulks, a graduate of Alverno College, has more than eight years of professional experience in marketing and customer service.

Chadd M. Frank has recently been promoted to vice president and commercial banking officer at Waukesha State Bank. He joined Waukesha State Bank in November, 1998. Frank earned his bachelor’s degree in business administration/finance from Marquette University. Currently he is active with the United Way in Waukesha County, Interfaith Caregiving Network, Waukesha Area Chamber of Commerce, and received a “Banker of the Year” award from the Wisconsin Business Development Finance Corp. He is the son of Martin H. Frank, the bank’s current president and president of the Wisconsin Bankers Association. He works at the bank’s Main office located at 100 Bank St, in downtown Waukesha.

Dave Preston has been promoted to the position of director of the consulting services division at AE Business Solutions in Milwaukee. He had been a consulting resource for the firm.

Scott R. Villenauve has joined Schenck Technology Solutions in Sussex as a software development supervisor. He received his training at the Milwaukee School of Engineering. He previously worked for Techskills.

Frank Biancuzzo, a Milwaukee native, has been named president and general manager of WISN-TV here. He succeeds Rick Henry, who moved to Heast-Argyle’s station in Pittsburgh. Biancuzzo has been with the firm since it was formed in 1997; he joined Hearst Broadcasting in 1995, and is a UW-Whitewater journalism graduate.

Jessica Rock has joined Creative Constructors of Menomonee Falls as director of business development. She is a 1997 business administration graduate of UW-Milwaukee.

James G. Pade has been promoted to the position of transportation and logistics manager for Wixon Fontarome, the St. Francis-based food ingredients manufacturer. He replaces Gerald D. Siegel, who retired. Pade will continue to lead the company’s systems/information technology department. He is a computer engineering major with a B.S. degree from UW-Madison; he also holds a business administration master’s degree from Marquette University.

April 12, 2002 Small Business Times, Milwaukee

Unpaid wages and insurance premium misappropriations alleged

Employees of Banner Tool & Engineering filed complaints March 24 with the US Department of Labor and the Wisconsin Department of Workforce Development against the owners of the stalled company over unpaid wages and insurance claims.

According to the complaints, owners Keith Akers and David Leist had canceled employees’ self-funded insurance coverage in January. The claim alleges that, in violation of the federal Employee Retirement Income Security Act, which regulates self-funded plans, employees were not told they no longer had coverage, and continued to pay the premium while unpaid claims dating from as far back as October of 2001 started to accumulate.

Employees are seeking $67,188.51 in unpaid claims and fraudulently collected premiums.

The employees are also seeking $54,274.82 in unpaid wages and vacation. Overall, employees hope to collect $206,318.78 from Leist and Akers.

Leist and Akers were equal co-owners of the company according to a former employee. Akers served as treasurer and was primarily responsible for the finances. Akers has since filed for personal bankruptcy. Leist served as president of the company and dealt with customers and prospects.

April 12, 2002 Small Business Times, Milwaukee

Plans to build an office and retail project in the heart of the city of Milwaukee have been announced by Hammes Co., a Brookfield-based national real estate development firm.
The new building, to be located at the southwest corner of Water and Wells streets and to be addressed 789 N. Water St., will add 51,000 rentable square feet to the city’s inventory of office and retail space, said Andy Weltcheff, Hammes Co. spokesman.
“This development, on a site that has been vacant for nearly 30 years, reflects downtown Milwaukee’s desirability as a place to do business,” Mayor John 0. Norquist said. “The new office and retail complex joins 136 apartments built as part of the City Hall Square project, which is adding vitality to the heart of downtown.”
Hammes representatives expressed confidence in finding interested tenants for the building, citing its location.
Hammes plans to develop 45,000 rentable square feet of office space and 6,000 rentable square feet of retail use on the ground floor. The five-story masonry and glass building will include three stories of office space and two stories of parking.
Kahler Slater has been named the architect of the Water and Wells project. Groundbreaking is anticipated for this summer and the building is expected to be completed toward the end of 1999.
The space is currently a surface parking lot. The site formerly hosted the Blatz Hotel which was razed in the early 1970s.
The Hammes development will be part of the overall City Hall Square redevelopment encompassing properties kitty-corner from City Hall. The redevelopment is creating new office, retail and residential space, largely out of existing structures.
The development was contingent on the approval of the Milwaukee Common Council.
May 1998 Small Business Times, Milwaukee

Ground has been broken for CG Schmidt’s new corporate offices at 11700 W. Lake Park Dr. on Milwaukee’s far northwest side.
The 17,000-square-foot building will house the construction company’s staff of more than 40 persons and will replace its current home on North Richards Street – a facility constructed in 1963.
The company expects to take occupancy of the new building in November.
In selecting the new location and planning its new building, the company set out to accomplish several goals, said Bill Kissinger, company vice president.
One goal was to stay in the city – a goal realized by the purchase of a site in the Park Place office development from the Milwaukee Economic Development Corp. “The city, especially the Department of City Development, was especially helpful to us in fulfilling our commitment to stay in the city,” Kissinger said.
Another goal was to provide room for continued growth. The firm has seen its revenues grow from $35 million five years ago to $90 million today. That has led to an increased professional staff at the main office as well as a growing field force.
“We anticipate continued growth in the coming years and a moderate increase in office and professional staff to support our construction operations,” said company president Steve Chamberlin. “We are taking every opportunity to make our operation more efficient through automation, but need to provide space for additional people.”
The other goal, said senior project manager Dan Davis, is design and build with “sustainability” in mind. Calling the company a leading proponent of “green” construction principles, Davis said CG Schmidt intends to use the building as a demonstration site for green design principles that can be applied at little or no cost to construction projects.
Green principles that CG Schmidt will take into consideration for its facility are building orientation, mechanical systems, construction materials and landscaping.
May 1998 Small Business Times, Milwaukee

Lakefront Brewery in Milwaukee has moved to its new location along the Milwaukee River just north of downtown.
The brewery, founded in 1985, has set up shop in a facility which once housed the city’s forestry division, at 1872 N. Commerce St. It offers 10 times the floor space of the brewery’s former Chambers Street location in Milwaukee’s Riverwest neighborhood.
“From our first year when we brewed and sold all 60 barrels within rolling distance of the brewery, we’ve learned and grown from the Chambers Street location,” said company president Russell Klisch. When the brewery marked its 10th anniversary in December, Klisch noted that it has produced and sold nearly 3,000 barrels of beer in 1997.
Russell Klisch founded the brewery with his brother Jim.
The brothers are now hoping to attract another business – possibly some soft beverage producer – into their Chambers Street location, Jim Klisch said.
The brewery’s new riverside location is adjacent to the Riverpointe apartment complex which was developed out of the old Gimbels warehouse. The city is eying further residential development along that stretch of Commerce Street.
The Klisches say they are likely to establish an outdoor, riverside beer-tasting garden, and may seek another business owner to establish a tavern at the site.
May 1998 Small Business Times, Milwaukee

Answer of Dale Muehl of Wipfli, Ullrich Bertelson
Running a business successfully is like taking a journey: you need a destination (objectives and goals) and a well-thought-out plan to guide you there. Along the way, you must continually monitor your progress to make sure you’re still on course.
Assuming you’ve determined your company’s destination and have a plan in place, the first step in establishing an effective monitoring system is to identify the key financial and operational indicators for your business.
Once you’ve identified your operation’s most critical indicators, you must set goals for each of them. To set those goals, consider several factors: the company’s past performance, developments that may cause future performance to differ dramatically from historical results, and benchmarking the performance of your company against direct competitors and others in your industry. The relevance and importance of those factors will vary depending on your company’s particular circumstances.
After you’ve determined indicators and set goals, you need to develop an efficient system for monitoring your progress. Some of the information you’ll need to analyze might be available through your existing financial system; a number of the software products currently popular with small businesses do a pretty good job of reporting such data. To obtain information that’s not being captured, custom reports can often be developed. If your system does not support custom reporting, other programs such as Microsoft Excel or Access can be used in conjunction with your software to generate the needed information.
Determining key indicators, setting goals and monitoring progress are meaningless actions if they are not utilized in the daily management of your business. Timely information on actual performance along key indicators compared to goals for those indicators needs to be generated and communicated to the appropriate employees. Those employees also need to understand their individual level of authority and degree of responsibility for monitoring progress and attaining goals. When there is a significant variance in actual performance versus your goal, either positive or negative, the cause should be determined immediately. If the variance is positive, the cause should be incorporated into the company’s plans when possible to enhance future performance.
Answer of Dave Bauer of Virchow, Krause Business Strategy Group
A CEO needs a well developed performance measurement system centered around four main principles.
The benefits to a well-structured performance measurement system are:

hurts morale
Question:
Within the last six months we have doubled the size of our customer service department. We have done this by moving people from other departments into the department and by hiring from the outside. Although we expected a period of settling in, things have been rocky ever since the changes were initiated.
Part of the problem is the customer service manager. He is tough, demanding, and direct. The veterans within the department have learned to accept his approach, but that doesn’t mean they enjoy it.
To make a long story short, morale has been decreasing over the past few months. The CSRs have been struggling to adjust to all of the changes which have taken place. As HR manager, I’m hearing more and more complaints about their manager’s impersonal approach which is along the lines of, “Changes are taking place, live with them.”
Over the years (he’s been with us for eight years), we’ve been pleased with his overall performance, although we have encouraged him to be less critical of his people and “softer” in the way he interacts with them. Given what we are seeing within the department at the present time, we feel he must change his approach if we are to move the department forward. What are your thoughts on how we can help him do this?
Answer:
If I read between the lines, what I am hearing you say is that the manager’s interpersonal expertise does not match his technical expertise. This is common, as many managers are promoted based on their job “know-how.” However, as you move up the chain-of-command, know-how only carries you so far. Skills involving the facilitation of the work of others and helping the team to work well together become increasingly important.
Although we are living and working in an information age, technology by itself is not enough. Technology only helps us stay informed. Strong communication and interpersonal skills are necessary to form appropriate connections with others.
Although communication skills are sometimes viewed as “fluffy” or hard to pin down, a 1990 study funded by the American Society for Training and Development (ASTD) and the U.S. Department of Labor identified oral communication as a vital skill and affirmed that job success is indeed linked to effective interpersonal skills. And, given that many organizations are re-examining their job requirements in light of behavioral competencies, it seems apparent that interpersonal skills are being taken more seriously.
Of course, part of the recent emphasis on interpersonal skills stems from general changes which are taking place in the way that work is conducted. In the past, it was employment for life, defined career tracks, hierarchical organizational structures, strict managerial supervision, a focus on performing single tasks, and little emphasis on acquiring new skills or knowledge.
Today, the world of work is one of frequent employment changes, personal responsibility for career development, flattened organizational structures, team work, process improvement and multiple tasks, and increasing emphasis on acquiring new knowledge and skills and lifelong learning.
Implicit in all of this, I believe, is that strong communication skills are necessary for survival in today’s business world. Communication is the process by which people share information about themselves, ideas, things, and tasks. It is the process by which meaning is created – understanding and accepting others and being understood and accepted by others. In essence, communication is like a revolving door because each person involved in the communication is responsible for the outcome.
Clearly, part of being an effective communicator is recognizing who your audience is. Each group of people brings with it a unique set of characteristics with many possible variations. Differences may exist in terms of work style, problem-solving style, education, work experience, personality type, and personal background (e.g., gender, age, ethnicity, lifestyle orientation, etc.). Good communicators use these differences to their advantage and to the advantage of the group.
In terms of your situation, you need to be helping the customer service manager and the CSRs communicate across their differences by encouraging openness, a willingness to share and learn. That needs to take place in an atmosphere of respect and trust, and with a focus on the project goal.
One way to get started is having each group members (including the manager) identify his/her interpersonal style. A number of behavioral inventories are available to assess individuals’ preferences. A typical inventory might focus on these domains:

Construction loan closing entails a host of paperwork
If your business has a simple line of credit with your bank, you probably signed a note, and maybe a security agreement and UCC Financing Statement, and that was the end of the loan closing.
The first time you take out a construction loan to build your company’s new building, you may be surprised to see a sea of documents on the table which must be signed in connection with your construction loan closing. Here is a quick guide to what those documents do and why they are necessary.
Note. Just as with a general commercial loan, the note represents the obligation to repay the borrowed money, and an agreement on the interest rate and how the interest rate may change, the length of the loan, and how and when the loan will be repaid.
Mortgage. In a construction loan, the lender is giving you the money not based on the strength of your business, but on the value of the land you have purchased and the improvements you are constructing. Therefore, the lender takes the property and the future improvements you are creating as collateral for the loan. The mortgage gives the bank a lien on the land and future improvements, explains how you must maintain and insure the property to preserve that collateral, and identifies what the procedure will be if the lender ever has to foreclose.
Affidavit of Liens and Possessions. In Wisconsin, if you buy a piece of property, and a tenant is occupying that property, even if that tenant has no rights recorded in the Register of Deeds’ office, you may take title to that land subject to that tenant’s rights. Part of what the Affidavit of Liens and Possessions does is have the current owner of the property swear that either there are no leases, or has the owner identify exactly who does have lease rights.
The second part of the Affidavit of Liens and Possessions clears a different issue dealing with contractor liens. In Wisconsin, generally speaking, anyone who has either performed work or provided materials for the improvement of your property within the last six months has a right to put a lien against the property.
For example, if your seller had work done on the property the day before he sold the property to you, and the contract was not paid, that contractor might still have the right to put a lien against your property after you purchase it.
In order to clear up such a potential problem, the seller also signs this Affidavit of Liens and Possessions.
The title company can then work forward from that date, to eliminate lien rights for contractors you hire after you purchased the property.
Architect’s and Contractor’s Contracts and Assignment. You probably have already entered into or are in the process of entering into a contract with an architect and/or a general contractor.
One of the construction loan closing documents will be an assignment of those contracts to the lender. Typically, the architect and the contractor contract are made directly with your company and cannot be assigned without the permission of the architect or contractor. However, if you flee in the middle of the project, the lender needs to know that it can use the same architect and the same contractor to finish the project.
A half-built project has very little value, but if a bank can finish the construction of the project, it then has something valuable that it could use as collateral and sell at a foreclosure sale.
Assignment of Permits. Similarly, if you have obtained a building permit or other permits to build your improvements, the lender may also need those same permits to continue the construction project if you stop.
Evidence of Zoning. Either through a letter from your municipality or through a zoning endorsement to your title commitment, the lender often asks for evidence that the building you want to build can be built, and can be occupied for your intended use, in the location and in the manner you want.
Survey. A survey is the only document that provides a link between the paragraph legal description of your property on the deed to you, and the land your eye sees.
The survey usually identifies the boundaries of the property, the correct legal description, the location of any buildings or other improvements that are currently on the property, the location of any easements that are recorded against your property, and any other markings that you have asked the surveyor to perform.
There is no standardized legal definition of “survey” so you need to specify which of these items you want.
In a construction loan closing, the vacant-land survey provides the base point to the lender and title company, showing what is on the land now. Generally, after the foundation and footings have been put in, the loan closing documents may require an “as-built survey” that locates the foundation and footings on the property.
Title Insurance. The title insurance commitment discloses who is the current owner of the land in the official county records, the exact legal description, any other documents that are recorded against the property in the county Register of Deeds’ office, (such as easements and deed restrictions), special assessments levied against the property, and any documents which must be obtained before the title company will issue the policy.
The insurance policy that goes with the title commitment insures each of the owner and the lender against a number of other title problems, and gives you an insurance policy against which you can claim, if the policy fails to disclose a problem it should have disclosed. Most important, it will pay to defend you if anyone challenges your title to the property because of a covered defect.
Construction Loan Agreement. The construction loan agreement, if you have one, identifies what documents you need to provide and what conditions must be met, for the lender to make each construction draw.
Typically, there is a long list of documents required for the first construction draw, which is essentially your closing checklist, and then a list of documents required for each later construction draw. In addition to the as-built survey referred to above, draw requests usually require at least the following:
Draw Request. A draw request signed by the general contractor for payment for completed items, usually on a spreadsheet showing the total budget for that item and how much remains to be completed for that particular item. The contractor usually must sign some type of affidavit swearing that all of the work requested in the draw request has been completed. The owner usually must also sign the draw request approving the payment of those amounts.
Contractor’s Affidavit. The contractor signs an affidavit to the title company confirming all of the contractors and materialmen who have been hired by the contractor to do work on the property since the beginning of the project. That gives the title company the master list of every party who may have lien rights against the project so that they can start collecting the lien waivers from each of those parties and closing off that risk.
Owner’s Affidavit. Often, the title company will also request the owner to sign an affidavit confirming the list of any contractors that the owner has hired directly for work on the project, again, so that the title company has the master list against which to check off all the lien rights.
Inspection. Many lenders require that an inspector, either an independent inspector or a representative of the lender or the title company, must go to the site of the project and view the project to make certain that the improvements that are claimed to have been built actually have been built. The borrower pays for this fee.
Lien Waivers. The contractor, along with his draw request, must provide the title company with lien waivers from his own company, and any subs the contractor has hired, for all of the work that has been completed under his control. If the owner hired subs directly, the owner must follow the same procedure. There is often discussion whether the general contractor must bring lien waivers for all of the work that is requested in that current draw request, or only for the work that was completed through the prior draw request.
Certificate of Substantial Completion. At the time that the final construction draw is made, in addition to all of these documents, the title company and lender usually require that the architect sign a document certifying that the work has been completed in accordance with the plans and specifications that were approved by the lender and any state or local building inspectors
Permits. Because construction cannot proceed legally without securing both state and local building permits, as a condition to the initial closing, the lenders usually require copies of the local building permits and the state stamps on the plans and specifications for the state approvals.
Utility Availability. Lenders typically require some evidence that all of the utilities that are necessary for the project are in the roadway or adjacent to the property.
Occupancy Permits. An occupancy permit is a permit that is issued at the time construction is complete and the building inspector determines to allow the property to be occupied.
Disbursement Agreement. The title company and the lender may require you to sign a Disbursement Agreement, joined in by the general contractor, so everyone has agreed to the same disbursement procedures. Without it, the construction contract’s disbursement procedures often do not match the lender’s.
Nancy Leary Haggerty is an attorney with the Milwaukee office of Michael Best & Freidrich.
May 1998 Small Business Times, Milwaukee

Internet commerce is real. Are you ready?
Over the course of time, technical innovations and the fundamental changes they bring about have made for interesting debate.
Down through the years, statements were made that, in hindsight, can be considered absurd. See if you can identify the people who made the following remarks. The answers will appear at the end of this article:
1. “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”
2. “I think there is a world market for maybe five computers.”
3. “I have traveled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won’t last out the year.”
4. “But what … is it good for?”
5. “There is no reason anyone would want a computer in their home.”
6. “640K ought to be enough for anybody.”
7. “A “catastrophic collapse” of the Internet will occur in 1996.”
Most of those now-popular statements were more than likely taken out of context, but nonetheless point to a trend where new technology frontiers are emerging: there are myths and realities associated with any trendsetting concept, and each one enjoys its share of early adopters and naysayers.
Enter the concept of electronic commerce over the Internet, or E-commerce.
Myths
“Electronic commerce over the Internet is unsecured.”
“As a company, we may alienate our distribution chain.”
“Internet commerce will never materialize – it will dry up and eventually fade away.”
“Why would anyone want to buy something over the Internet?”
“Isn’t it expensive?”
“It will eliminate personal interaction.”
Reality
Electronic commerce on the Internet is an ever-increasing reality. International Data Corp. expects a significant rise in worldwide Internet commerce, growing from just over $10 billion in 1997 to $123 billion in 2000.
A recent Commerce Department report found that radio existed for 38 years before it had 50 million listeners, and television took 13 years to reach that number of viewers. The Internet hit that milestone in just four years. In addition, more than one third of all current Web users are making online purchases today.
With the continued rapid adoption of the Internet and the potential to create compelling business advantages, the time to implement an Internet commerce strategy would appear to be now.
“Internet commerce” is the buying and selling of goods and services within a secure environment through the Internet. Its potential represents a dramatic extension of current methods of doing business. By leveraging the simplicity, power and global reach of the Internet, businesses can expand market share by serving new customers in geographic and demographic market segments that they have never been able to target or serve before.
Additionally an E-commerce solution like Dealer price enforcement can increase value from suppliers and others in the distribution channel, build stronger relationships with existing customers and partners and help better manage internal resources.
The value proposition is relatively simple: The ability to conduct secure transactions across the Internet gives users instant access to a worldwide market of buyers for products and services.
Companies which implement E-commerce solutions can expand their market reach, increase revenue, lower operating costs and enhance customer satisfaction.
And don’t let the simplicity of the value proposition fool you: a sound commerce strategy should be implemented to plan for and handle the complexities associated with this new and powerful way to do business.
It would appear that members of the supply chain cycle who resist the reality of Internet commerce, both from the business-to-business and business-to-consumer perspectives, will become victims of supply chain piracy. It’s lead, follow, or get out of the way.
Another myth debunker comes in the form of experience.
At a recent E-commerce seminar at the Milwaukee Athletic Club, Sheldon Laube, chief technology officer for USWeb Corp., stated that experience is a critical factor to success in the area of Internet commerce.
“Businesses cannot simply learn from others,” Laube said. “The velocity of change is increasingly so rapidly that ‘been there, done that’ is the only way you can learn. Learning is so valuable at this stage of the cycle.”
Laube also added that time is critical.
“Customer expectations of a Website is such that a static billboard experience is not enough. Users expect some sort of business process to be available to them when they go to a site. People buy insurance, lease a car, order a gift certificate, receive technical support, order brochures, and all kinds of things. These are real tools, being used by real people.”
Viewed as a myth only several years ago, it would appear that electronic commerce via the Web is reality. The promise and potential is simply too vast.
Jim Brophy is senior manager, business solutions, for the Milwaukee practice of USWeb Corp. in New Berlin. Small Business Times readers who have an Internet-related question can e-mail Brophy at jbrophy@usweb.com.
Answers to the remarks above:
1. Western Union Internal Memo, 1876
2. Thomas Watson,
chairman of IBM, 1943
3. The editor in charge of business books, Prentice Hall, in 1957
4. Engineer at the Advanced
Computing Systems Division of IBM, commenting on the microchip
5. Ken Olson, president,
chairman and founder of
Digital Equipment Corp., 1977
6. Bill Gates, 1981
7. Bob Metcalfe,
inventor of Ethernet, 1995.
May 1998 Small Business Times, Milwaukee