An out-of-state developer that served as the general contractor on Colorado Springs’ first affordable-housing project built on church property — and that Gov. Jared Polis came to town to tout a few weeks ago — hasn’t paid numerous subcontractors, resulting in more than $1.2 million in liens, public records show.

The construction arm of Wisconsin-based Commonwealth Cos., which describes itself as “one of the nation’s largest, majority woman-owned affordable housing development companies,” owes Winters Electric of Colorado Springs $156,000 for work completed on The Village at Solid Rock, said owner Damon Winters.

The 77-unit, $25 million apartment complex for low-income residents broke ground in 2022 on the city’s historically economically disadvantaged southeast side and opened in September 2024.

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Across the parking lot is Solid Rock Christian Center, a nondenominational church of about 75 members, which owned the land and orchestrated the project in partnership with Commonwealth Development Corp.

Polis toured the site on Dec. 18, calling it a model for other communities as he encouraged churches around the state to use their property to add affordable-housing stock.

“They haven’t paid me for months, which is just criminal,” Winters said of Commonwealth. “It’s impacting some companies hard — people are losing their jobs, because companies can’t pay them.”

Calls to several people who had worked on the project as representatives of Commonwealth and to a company lawyer were not returned.

One worker who asked not to be identified for privacy reasons said Commonwealth has engaged in similar nonpayment practices in the past.

Another affordable-housing project in Talent, Ore., Renaissance Flats, is said to have experienced payment delays. 

When asked about the issues, Delia Hernandez, spokeswoman for Oregon Housing and Community Services, said the agency “is not party to the contracts” between the developer and general contractor or with the subcontractors, and “any payment and work delivery issues are resolved between those parties.”

However, the agency’s funding-application processes consider criteria that include past performance, experience and “good standing of applicants, before awarding funding,” Hernandez said via email.

Levi Lebaron, owner of LBL Drywall in Brighton, Colo., said Commonwealth has stiffed him for $404,000 at The Village at Solid Rock.

“We haven’t been paid since last February. It’s affected us pretty good. We’re lucky we have enough work to keep us going. They kept telling us the check’s in the mail. But nothing’s ever in the mail, and they’ve stopped responding. I’m thinking they’re not going to pay now.”

Like Winters, Lebaron filed a lien.

The development partnership between Solid Rock and Commonwealth formed from the Interfaith Alliance of Colorado’s Congregational Land Campaign, also known as the Housing Equity Campaign, which “promotes development of affordable housing on faith-owned land, supports innovative solutions to homelessness and advocates for policies that advance equality of opportunity in housing,” according to its website.

“I think they used the church to try to make them look good,” Lebaron said of Commonwealth. “You’d think they’re pretty much working with the Lord that everything would be honest.”

The Rev. Ben Anderson, pastor of Solid Rock Christian Center and executive director of Solid Rock Community Development Corp., told Winters he wasn’t aware of the problems Commonwealth was having paying contracted workers. He did not respond to a Gazette query.

Winters said he’s spent $8,000 in lawyers’ fees so far in an attempt to recover the money he said Commonwealth has shorted him.

Colin Moriarty, an attorney with Underhill Law PC of Greenwood Village and Denver, represents one of the unpaid subs, McClanathan Construction, which filed a lawsuit in November.

“There are many such people — more than the one I represent — of unpaid subcontractors,” he said. “It’s so new we haven’t gotten into discovery yet, but my client wasn’t paid, and I don’t know why.”

Since the case is active, Moriarty said he wouldn’t comment further.

“Hopefully, the parties will all resolve it amicably,” he said. “Most cases do.”

It’s not unusual for contractors, subcontractors and vendors to place a mechanic’s lien on a property they have worked on if payment lags longer than it should or take the matter another step by filing a lawsuit.

A lien gets attached to the property’s title, which makes it difficult for the owner to sell or refinance.

As the process advances, if the property owner doesn’t pay, the lienholder can sue to foreclose on the property, a legal action that can prompt a court-ordered sale of the property to pay off the debt.

A wide range of big and small companies that provided services such as painting, plumbing, electrical, security, drywall, building materials suppliers, heating and cooling, and others, have filed liens against Commonwealth for The Village at Solid Rock.

But it’s not common for that to happen with an affordable-housing project.

“When you work on Section 8 housing, you’re doing it to try to help out, and these projects get government subsistence,” said Todd Moritzky, one of the owners of Bulletproof Plumbing and Heating in Colorado Springs.

“As a subcontractor, we think at least we’re guaranteed we’re going to get paid,” he said. “Unfortunately, that’s not what occurred here.”

Affordable-housing projects often seek competitive tax credits to help fund the costly large-scale developments.

In 2020, as part of its financing plan the Village at Solid Rock received, through the Colorado Housing and Finance Authority, $1 million in a 4% federal Low-Income Housing Tax Credit and $642,500 from the Colorado Affordable Housing Tax Credit program.

A bond in the amount of $11.5 million for the project is owned by Commonwealth Development Corp., according to the state report.

The McClanathan Construction lawsuit states, “Commonwealth said it was unable to pay (subcontractors) due to ongoing financial issues unrelated to McClanathan.”

Winters claims Commonwealth had “full knowledge of cost overruns” when something went wrong during the framing stage, and parts of the structural work had to be dismantled and reframed.

Winters, who’s owned his electric company for 24 years, said site workers also told him that labor costs were poorly estimated and, when combined with the framing mix-up, “created a huge overrun in their budget when the building was starting construction.”

“They’re saying they did a poor job of estimating and ran out of money,” Winters said.

Normally when something like that occurs in construction, the company will take out a loan to make sure its subcontractors and suppliers get paid for work that’s been finished, he said.

Some of the liens, which began being filed last summer, were settled for what Winters calls “pennies on the dollar.” He questions the ethics of those offers, because he believes Commonwealth knew beforehand that it had planned to use that tactic.

“We were asked to take a 40% reduction on our bill, and the knee-jerk reaction for smaller companies is, ‘At least I’ve collected half rather than nothing,’” said Moritzky, the plumbing contractor.

But Moritzky countered with this: “We let them know they’d voided their warranty, and that generally gets somebody’s attention, because plumbing can cause some serious property damage, if not complete destruction, because we did the gas piping, as well. We want to maintain a solid warranty on things that go boom.”

One of the painting contractors for The Village at Solid Rock, who asked not to be named out of concern that his speaking out would negatively affect future work, said he hasn’t been paid, either, to the tune of just under $200,000.

“It’s pretty crazy — we were pretty blown away,” the owner said. “They don’t seem to be interested in paying us. A lot of trades are trying to join a lawsuit to get their place in line. Holding out on people without probable cause is not legal. They never notified us of any defects — they’re just not paying.”

The situation of “dragging it out at the end” is becoming more frequent in the construction industry, Moritzky said.

“It’s running rampant, and we have to stick to our guns and continue with the lien process,” he said. “Once that happens, they generally will pay. This is the first time I’ve heard of this happening with an affordable-housing build.”

A concern now is that the development partnership of Commonwealth and Solid Rock already has begun work on a second affordable housing project, the 68-unit Jet Wing Flats, at 2040 Jet Wing Drive.

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The proposal was awarded $1.35 million in federal Low-Income Housing Tax Credits and $1.8 million in accelerated state tax credit in the second round of funding just a few months ago, according to the Colorado Housing and Finance Authority.

A bond amount of $14.7 million held by Commonwealth Development Corporation of America also is listed for that project.

“Who wants to work for people who don’t pay you?” said one of the subcontractors.