LAKEPORT – One of Lakeport's best known businesses is facing a series of challenges, including foreclosure actions and lawsuits, giving rise to concerns about its future.
Piedmont Lumber & Mill Co., which has several locations around Northern California including a store at 2465 S. Main Street in Lakeport, has been an important player in the Lake County business community and a large employer in the area for many years, but March has so far been a fierce time for the company.
The company is facing loan default actions on properties including its Lakeport store, a federal lawsuit over employee benefits and the fallout from a March 13 fire that destroyed its Walnut Creek store, resulting in millions in damages.
The Lakeport store remains open, but calls to Ted Mandrones, the Lakeport store's manager, were not returned.
When Lake County News called the company's headquarters in Pleasant Hill, a staffer who answered the phone stated, “They're not doing any comments at this time.”
The company's Web sites also are not working.
“The importance of Piedmont to Lake County can't be overstated by any means,” said Lake County Chamber of Commerce Chief Executive Officer Melissa Fulton. “They've been a major employer. It's a family-owned business. They have supported just about every community cause that has come across their desk.”
On March 1, Umpqua Bank – which has made millions of dollars of loans to the company over the past several years – filed a lawsuit in Contra Costa County Superior Court for breach of contract and warranty against Piedmont Lumber, owner William C. Myer Jr. and his wife, Victoria Myer, according to an online court records search.
A case management conference in the suit is set for July 19, based on available records.
Lake County News was unable to obtain the full court records this week, but the Contra Costa County Times reported Tuesday that the lawsuit sought judicial foreclosure actions against several company properties including Piedmont's Lakeport store.
Lani Hayward, a spokesperson for Umpqua Bank, told Lake County News that the company could not comment on the case.
Also on March 1, Northwest Administrators Inc., a company that provides employee benefits plan administration, filed a lawsuit against Piedmont Lumber in federal court.
The complaint states that the company is the administrator for the Western Conference of Teamsters Pension Trust Fund. The fund's trustees are bringing the action because they allege that Piedmont has failed to make benefits contributions on behalf of employees, which it agreed to do based on collective bargaining.
Attorney Michael J. Carroll of the San Francisco firm Erskine & Tulley, which is representing Northwest Administrators Inc., would not answer questions about the case when contacted by Lake County News.
On March 1, two notices of default and election to sell under deed of trust were filed against the 2465 N. Main property, which was used to secure Umpqua Bank's deed of trust, according to assessor-recorder records. The notices were recorded the following day with the county.
The defaults were for two loans – the first, for a note dated May 19, 2008, for $13.5 million, and the second for a note dated May 21, 2008, for $3.35 million. Both loans had variable interest rates.
As of Feb. 23, approximately $11,349,324.08 and $3,279,493.26 were owed on the two notes, respectively, according to the documents.
The default notices also explain that Piedmont Lumber sought modifications to its forbearance agreements with the bank for both loans in September and October of 2009.
Business undergoes expansions
In recent years, lumber and hardware companies around Lake County have expanded and upgraded their facilities.
At a Jan. 7 public hearing the Clearlake City Council held to discuss a proposal for a new Lowe's home improvement store, Mark Borghesani – whose family owns and operates Kelseyville Lumber – said in 2005 hardware and lumber businesses in Lake County had 79,000 square feet of retail space. After a few years of large expansions, total square footage of those stores now totals 290,000.
Piedmont was one of the local businesses that underwent an expansion. “They made a major investment in the Lakeport store over the last three years,” Fulton said.
County planning records show that Piedmont took out a permit in February of 2007 for improvements to 29,826 square feet of mercantile and store space, with a total estimated value of $1,475,343. The permit cost was $8,196.07.
In May of 2007, improvements were made to the Lakeport store's warehouse and receiving area, including an 8,370-square foot shed structure. Planning records showed those improvement had a $223,227 valuation, with a permit cost of $2,536.64.
The final improvements county documents show were recorded in a November 2007 permit. The company paid for a $1,941.18 permit to cover improvements to 4,642 square feet of commercial space, valued at $149,472.
Property taxes are current on the property, according to county records.
Assessor's records value the main store property, located on 4.55 acres, at $4.1 million. It sits next to a long, thin 1.51-acre parcel that is not the source of any court action.
A residential property at 8276 Peninsula Drive belonging to the Myers also has a $1.5 million loan from Umpqua Bank that was recorded in May of 2008.
In the wake of the improvements to the store, the economy hit serious trouble, which Fulton pointed out hugely impacted the construction industry and, subsequently, business for Piedmont and other similar stores.
Fulton said it was “too many things happening at once.”
She said Wednesday that she had heard about reductions in Piedmont's staff companywide – possibly as high as two-thirds – but didn't have information for Lakeport's store.
With everything the company has done for Lake County, Fulton added, “It is certainly that the hope of everyone in the community that they will be able to surmount all of these challenges.”
Investigation continues into fires
Adding to Piedmont's troubles, on March 13 its store at 2860 N. Main St. in Walnut Creek caught fire, resulting in a four-alarm fire that caused an estimated $5 million in damage, according to Bay Area media reports.
On Wednesday, the Contra Costa County Fire Protection District reported that it concluded its investigation into the fire's cause the previous day and released the property to the business owner and insurance company representatives.
Officials said the fire's cause is still under investigation. No exact determination has yet been determined and now a more detailed followup investigation will begin with the continued assistance of Walnut Creek Police Department, the Bureau of Alcohol, Tobacco and Firearms and the District’s Fire Prevention Bureau, according to the statement.
Spokesperson Emily Hopkins said they're still seeking tips on the fire.
Last August, a fire occurred at Piedmont's Pittsburg location, according to Contra Costa County Fire Protection District.
That fire began in one of Piedmont's exterior enclosed lumber storage racks and spread to another larger storage rack. Contra Costa County Fire's report explained that the fire radiated heat to the business next door, Wally’s Rentals, where the majority of the loss took place. Piedmont Lumber's business offices and main building were not affected by the fire.
“That investigation also is still open,” said Hopkins.
E-mail Elizabeth Larson at
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