Obama Center Mechanic's Lien: WGN Interview

WGN Investigates aired a report this week on Adamson Plumbing, a Chicago area plumbing contractor that shut down after working on the Obama Presidential Center. Thomas Emalfarb of Emalfarb Law LLC was interviewed for the segment as an independent construction law commentator. The firm does not represent Adamson Plumbing, the Obama Foundation, the general contractor, or any other party to the dispute, and nothing here reflects confidential information about it. You can watch the WGN Investigates report here.

What follows is the legal background behind the story: what a mechanic's lien does on a large private project in Illinois, why a recorded lien is often smaller than the loss a contractor describes, and which deadlines decide whether the claim survives at all.

What WGN Reported

According to WGN, Adamson Plumbing suspended operations on June 25, days after the Obama Presidential Center opened to the public, laid off roughly two dozen workers, and left several other projects. Owner Mike Owen told the station that years of delays, rework, shifting scope, and labor overruns left the company deep in the red, and that a payment he was counting on did not arrive when he needed it.

Adamson performed its work on the project under the name Marsh-Adamson. WGN reported that the company has recorded a mechanic's lien of approximately $1.72 million against the property, while Owen puts the company's total loss on the project closer to $3.9 million. Owen told WGN the lien covers the amounts his records document most cleanly, including unpaid fees, logged change orders, and labor overruns.

Those figures are as reported by WGN. The dispute is at an early stage, the other parties have not had their positions tested in court, and none of what follows is an opinion about who is right.

What a Recorded Lien Actually Does

Speaking to WGN, Thomas Emalfarb described the mechanism in plain terms:

If a contractor doesn't get paid, they can take that property to a foreclosure sale and get paid from the net proceeds.

That sentence is the whole reason a mechanic's lien has weight. An unpaid invoice is a request. A lawsuit for breach of contract is a claim against whoever signed the contract, and it is worth whatever that party can pay, which on a failing project is sometimes nothing. A mechanic's lien is different in kind: it attaches to the real estate itself. The claimant is no longer chasing a company. It is holding a secured interest in the improved property.

The practical consequences follow from that. A lien of record clouds title, and an owner or lender that wants to sell, refinance, or close out a project generally cannot get clean title while it sits there. That is usually what brings people to the table. If it does not, the claimant's remedy under 770 ILCS 60/9 is a suit to foreclose the lien, and a court that finds the claim valid can order the property sold and the claimant paid from the net proceeds in the order of priority the court establishes.

The words net proceeds are doing real work in that sentence. A lien claimant is not first in line by default. Mortgages, other lien claimants, and costs of sale all figure into the distribution, which is why priority questions, and the four-month deadline that protects priority, matter as much as the amount claimed.

Why the Lien Is Smaller Than the Loss

The gap between the reported $1.72 million lien and the roughly $3.9 million loss is one of the most instructive parts of the story, because it is not a discrepancy. It reflects a choice that gets made in almost every large lien claim.

An Illinois mechanic's lien secures the value of lienable labor, materials, and services furnished to improve the property. It is not a general damages remedy. A contractor bled dry by a two-year schedule slip has real losses that do not map onto that definition: extended general conditions, equipment sitting idle, interest on borrowing to make payroll, bonding capacity consumed, and overhead absorbed while crews waited. Those losses are often recoverable, but the vehicle is a breach of contract claim against the party that agreed to pay, not the lien.

There is also a defensive reason to file conservatively. An owner facing a lien will attack the amount first, and a claim padded with items that are hard to document invites an argument that the whole lien is unreliable. Recording the figure that the change order log, the daily reports, and the certified payroll support, and pursuing the rest by contract claim, is usually the stronger position. That is what a claimant means by liening the amount that is most readily documented.

The Deadlines Do Not Care How Big the Project Is

The Illinois Mechanics Lien Act applies the same calendar to a presidential center and to a bathroom remodel. Three dates control most claims.

• Four months after completion, under 770 ILCS 60/7: the claimant must record a verified claim for lien or file suit. Meeting this deadline is what protects the lien against third parties, including purchasers, lenders, and other creditors.
• Two years after completion, under 770 ILCS 60/9: the suit or counterclaim to enforce the lien must be filed. Recording alone does not preserve the claim, and a lien that is never foreclosed within two years cannot be enforced.
• Thirty days after a Section 34 demand, under 770 ILCS 60/34: an owner or other interested party can serve a written demand that compresses a two-year window into 30 days. A claimant who treats that demand as ordinary correspondence can forfeit an otherwise valid lien.

Subcontractors carry an additional obligation. Under 770 ILCS 60/24, a subcontractor generally must serve written notice on the owner to reach the owner's interest, and the manner of service is prescribed by the statute rather than left to convenience.

On a project the size of the Obama Presidential Center, the hardest of these is not the arithmetic. It is fixing the completion date. Work on a large campus finishes in waves, punch lists run for months, and trades get called back for corrections long after their substantial work is done. Illinois courts generally measure the deadline from the last date of substantial lienable work, and minor punch list or warranty activity usually will not extend it. A contractor who assumes the clock started at the ribbon cutting can be months late without knowing it. Our Illinois lien deadline guidance walks through how that date gets established.

The Ownership Question That Comes First

There is a threshold issue on projects like this one that has to be resolved before anyone argues about dollars: what property interest is being liened, and is that interest subject to a private mechanic's lien at all.

Illinois does not allow a private mechanic's lien to attach to property owned by the State or a unit of local government. On genuinely public work, the remedy runs through a payment bond claim or a lien on public funds instead of against the land. Where a private entity builds on public land under a long term lease, the analysis turns on what interest exists and whether the Act reaches it. That question gets litigated early, and it is expensive to lose after the deadlines have already run.

The lesson generalizes well past this one dispute. Any contractor working on a project with a public, quasi-public, or ground-leased ownership structure should have counsel confirm which remedy applies before the notice and recording deadlines pass, because the bond claim deadline and the lien deadline are not the same date and choosing wrong is not usually fixable later.

What Subcontractors Should Take From This

The report describes a familiar pattern: a long project, scope that kept moving, change orders performed on verbal direction, labor overruns absorbed to keep the schedule, and a company that stayed on the job because leaving felt worse than continuing. By the time the payment problem became undeniable, the losses were structural.

The protective work happens earlier than most contractors think, and it is unglamorous. Get changes in writing before performing them, and where the field will not wait, confirm the direction in writing the same day. Track labor overruns daily by cost code so an overrun can be tied to a specific change rather than defended as general inefficiency. Preserve and document the last date of substantial work. Serve statutory notices on time rather than when the relationship sours. And calendar the four-month and two-year deadlines the moment nonpayment becomes a realistic possibility, not after.

None of that guarantees payment. What it does is make sure that if a project goes sideways, the contractor still owns a claim worth enforcing. The contractors who lose the most on troubled jobs are frequently not the ones who were treated worst. They are the ones whose records could not carry the weight of what they were owed, or whose rights expired on a calendar nobody was watching. If you are working through a payment problem on an Illinois project, contact Emalfarb Law LLC.

Frequently Asked Questions

What does recording a mechanic's lien actually give a contractor?

A recorded mechanic's lien is a security interest in the real estate, not a judgment and not a payment. It gives the claimant the right to file a foreclosure suit under 770 ILCS 60/9 and, if the claim is proven, to have the property sold and to be paid from the net proceeds according to the priorities the court sets. That remedy is what gives a lien its leverage. An owner who wants to sell or refinance generally cannot deliver clean title while a lien of record remains, so the lien tends to force a conversation that unpaid invoices alone do not. But the lien is only as good as the underlying claim and the deadlines behind it. Recording the document is the first step, not the finish line, and a claimant who records and then waits can lose the right to enforce it.

Why would a contractor record a lien for less than it says it lost?

Because a lien claim and a damages claim are different things. An Illinois mechanic's lien secures the value of lienable labor, materials, and services furnished to improve the property. Many real losses on a troubled project do not fit that definition cleanly, including extended general conditions, idle equipment, financing costs, lost bonding capacity, and the overhead absorbed while a schedule slipped. Those items may still be recoverable in a breach of contract action against the party that promised to pay, but they are harder to defend inside a lien. Overstating a lien also carries risk, because an owner will attack an inflated claim and, in some cases, argue the overstatement was intentional. Recording the amount that project records document most cleanly, and pursuing the rest by contract claim, is a common and deliberate choice.

Do the same lien deadlines apply on a large, high-profile project?

Yes. The Illinois Mechanics Lien Act does not scale its deadlines to the size or visibility of the job. Under 770 ILCS 60/7, a claimant generally must record a verified claim for lien or file suit within four months after completion to protect the lien against third parties such as purchasers, lenders, and other creditors. Under 770 ILCS 60/9, the suit or counterclaim to enforce the lien generally must be filed within two years after completion. Subcontractors may also owe notice under 770 ILCS 60/24 before their claim reaches the owner. A nine-figure project with a national profile is governed by the same calendar as a residential remodel, and the practical risk is often higher on the large job, because completion dates are contested and the last date of lienable work is harder to fix.

Can a mechanic's lien be recorded against publicly owned property in Illinois?

Generally no. Illinois does not permit a private mechanic's lien to attach to property owned by the State or a unit of local government, which is why the Act provides different machinery for public work. On public projects the remedy is usually a claim against the payment bond required by the Public Construction Bond Act, or a lien on public funds that attaches to money still owed to the contractor rather than to the land. Where a project sits on public land under a long term lease to a private entity, the threshold question becomes what interest exists and whether that interest is lienable. That question gets litigated before anyone reaches the merits of the amount owed, so any contractor working on a project with a public or quasi-public ownership structure should have counsel confirm which remedy applies before the deadlines run.

What should a subcontractor do when change orders pile up and payment slows?

Treat the paperwork as the case, because it will be. Get every change in writing before the work is performed, and if the field will not wait, confirm the direction in writing the same day and keep performing under protest rather than walking off. Track labor overruns daily against the bid, by cost code, so the overrun can later be tied to a specific change rather than argued as general inefficiency. Preserve the last date of substantial lienable work, since both the four-month deadline in 770 ILCS 60/7 and the two-year deadline in 770 ILCS 60/9 run from completion, and minor punch list or warranty work usually will not extend them. Then calendar the deadlines as soon as nonpayment becomes a real possibility, not after the relationship breaks down. Subcontractors who wait to see whether payment arrives are the ones who lose rights on the calendar.