Quick to bill, late to pay and the ‘team of teams.’ Inside the rise and stunning fall of Makers Line

Henry Jason Winkler ran multiple construction companies in Utah and other states that grew rapidly during a commercial real estate boom that came to an end in 2023.

Sign up to get free Building Salt Lake emails in your inbox.Building Salt Lake Pro and Premium Members can search for any building permit in Salt Lake City. Stay in the know in the market by becoming a Member today.

Employees at the string of construction and development companies that abruptly collapsed this autumn raised their concerns with leadership about the companies’ practices but were ignored even in the weeks leading up to the crash, Building Salt Lake has learned.

Past employees at multiple companies affiliated with Henry Jason Winkler and Ellen P. Winkler said they were directed to bill early for substantial amounts of money for work that at times wasn’t actually complete. The firms, meanwhile, garnered a reputation for being late to pay subcontractors and material suppliers.

The practices helped fuel the growth of a web of Salt Lake City-based companies that were owned by the Winklers before a combination of lost business, sloppy work and the decline of the companies’ reputation led to the stunning collapse of one of Utah’s fastest-growing construction enterprises.

“It was like a house of cards,” said Nathan McAllister, a former Makers Line senior project manager who left two weeks before the company laid off its remaining hundreds of employees in late October. “Everything they could do to leverage their money to the Nth degree: Maximized risks and maximized the potential for returns. When things turned against them it just all imploded.”

Interviews with a dozen people at all levels within various companies controlled by the Winklers, as well as people from other companies responsible for the construction of buildings across the Wasatch Front, shed light on the remarkable rise and fall of Makers Line.

The Winklers didn’t respond to a list of questions or comment on the record.

Many past employees spoke on the condition of anonymity, with several fearing retribution and others holding out hope that they would receive pay they’re still owed if they don’t speak publicly. Some said they wanted to shed light on business and accounting practices they want to be investigated.

The conversations with people who previously worked at Makers Line and Q Factor, as well as interviews with industry insiders who were aware of their operations, illustrate the rapid growth of an operation that largely went on outside public view.

Behind the veil, though, there were apparent issues the entire way.

Gossip and rumors spread throughout the companies. Leadership created a culture that several past employees said amounted to bullying and led some talented workers to quit.

Some employees said that if the company didn’t implode, work would have dried up after its reputation among investors, employees and subcontractors caught up with it.

The Winklers made a name for their development firm, Q Factor, by building a modern office building in Denver. They moved to Salt Lake City and did the same thing in the Granary District before growing their businesses to include multiple construction firms, which collapsed this fall.

The beginning

The Winklers made a name for their development firm, Q Factor, when they led the creation of a group of modern office and residential buildings in Denver they called Industry.

The projects are credited as being near the forefront of revitalizing the RiNo District in that city.

In July 2018, the couple moved to Salt Lake City, buying a house high up on the East Bench.

At the time, the capital city’s Granary District had all the kindling to become the next RiNo District. Between incentives from the city, a new federal tax law that fueled development and few neighbors to push back on rapid construction, the Granary was ready to catch fire. All it needed was for someone to light the match.

The Winklers bought a sprawling foundry and turned it into Industry SLC, a co-working office building with modern amenities. It was Q Factor’s first major development in Salt Lake City.

For construction, they used another one of their companies, Makers Line. When construction wrapped up in 2020, the building quickly filled with tenants at a time when the owners of other office buildings were struggling to find renters.

Soon after the early success of Industry SLC, the Winklers were on a path for expansion. Sometimes, Q Factor would act on projects as a developer, other times as a property manager. They created other companies that could also offer workers and expertise to construct buildings across the Wasatch Front, with the Winklers acting as manager over the companies.

Business records that might have shown a complicated ownership structure of an interwoven web of businesses are kept behind a paywall by the state of Utah, making them somewhat difficult to access.

Behind the paywall, though, documents lay out the assembly of what would become known at Q Factor and Makers Line as the “team of teams.”

The team of teams

The Winklers incorporated Makers Line in Utah as a limited liability company in August 2018 as a general contracting firm that would perform work and oversee subcontractors on adaptive reuse buildings in the state, state documents show.

They added Titus, which was created in October 2020, to offer concrete work that’s crucial for any major construction job.

JAG Equipment, created in Colorado in 2016 and incorporated in Utah in September 2020, would rent out the heavy equipment needed to construct jobs. Forge Metals, created in July 2020, would do steelwork. BHS Rockers handled drywall and other finishing work.

Drumbeat, which isn’t incorporated in Utah, offered architectural design and placemaking services and was said to be Ellen Winkler’s primary focus.

Timothy Foster | Former Makers Line President

Ellen Winkler filed the initial paperwork for nearly all of those companies, though employees who spoke with Building Salt Lake said they typically interacted with Jason Winkler or Tim Foster, who was brought on as president as Makers Line in 2019.

Having a vertically integrated team of construction companies meant developers and investors were paying the Winklers’ company, Makers Line, to hire companies that were also under the Winklers’ control. They highlighted that control as an advantage when pitching investors on projects.

Before the collapse, the Winklers were offering developers nearly a one-stop shop for construction services, all by a string of vertically integrated companies that spooled up to them as owners.

That was all created at a time when Utah’s decade-long construction boom was climbing up toward its peak. Interest rates were low and work was plentiful. Investors were rushing to get projects constructed to capitalize on inexpensive lending and rapidly rising rents.

Recruiters worked aggressively to bring on construction workers in a tight labor market. The team of teams grew to over 400 employees who had some part in dozens of projects worth hundreds of millions of dollars in Utah and beyond.

The Winklers planned more Industry buildings across the country, and they eyed development projects in Detroit, Oklahoma City, Arizona, Sacramento, California, New York, South Carolina and Bozeman, Montana.

That rapid growth led to a lot of money coming in and going out the door each week. Payroll hit over $1 million every two weeks between the Winklers’ companies, according to three people familiar with accounting practices at the companies.

It also meant a lot of bills owed to material suppliers and subcontractors as Makers Line scaled up and the commercial real estate industry headed for a cliff.

Quick to bill, late to pay

Makers Line was quick to bill its clients for work done on projects, even at times for work that hadn’t been done, employees and project owners say.

“Jason’s directions to me as I was building a Q Factor project — the Industry Bozeman building — was to have the subs bill 30-60 days ahead of the work being done,” McAllister said. “Typically, you do the work and then you bill for the work done. That way the investors don’t have to pay interest on a bank loan for a draw request for work that had not yet been done.”

“Jason was having me bill ahead to get the money in the door to use the money to run his family of companies and then typically paying the subs 60-90 days after Q Factor got paid by the bank,” McAllister said.

The Winklers’ construction businesses rode a period of rampant construction in Utah.

Two other former employees said Makers Line at times charged money for the whole amount of work up front.

Two people familiar with the accounting practices said there were bank accounts for each of the entities affiliated with the team of teams. But five sources said there was one holding account that transferred money between entities, called Winkler Holding.

Being quick to bill and late to pay meant at least Makers Line had several months of money it could use during its rapid growth, McAllister said.

“Whether handling the business and cashflow like this was criminal or not, I don’t know,” McAllister said. “I’m not a lawyer. But the impact on the investors and subcontractors was negative and hurt both.”

For the work it paid other companies to do, Makers Line was widely known to be slow to pay the subcontractors and suppliers actually carrying out the projects. That caused cashflow issues for other construction companies who had employees and suppliers of their own to pay.

Makers Line began to garner a reputation among a tight-knit development community along the Wasatch Front. Some subcontractors began avoiding working with Makers Line, employees said.

“I had a subcontractor for a job I wasn’t part of come knocking on my house door wondering how he could get paid for the project he helped on,” said Mike Thompson, a former senior superintendent for Makers Line. “Of course I didn’t know.”

At times, it was also difficult to procure materials to continue working, Thompson said.

“If Titus would go down to White Cap and run the bill up a couple million in rebar and supplies, none of the other [sister] companies can go shop at White Cap because that bill is run up and unpaid,” Thompson said. “It was tough.”

In November 2022, a project manager wrote an email to the leadership team at Makers Line to lay out a long list of frustrations with the way the firm handled business.

Among them, the project manager wrote that Makers Line employees were required to use other companies owned by the Winklers, even if it meant the developer they were working for paid more money.

As one example, the employee wrote that JAG Equipment, the construction rental company that is still registered to Ellen Winkler, was “widely perceived around the company as being illegitimate.”

“Rumors abound that Jag is a front for embezzlement, laundering, etc.,” the employee wrote. “Truly frightening rumors that are all around the company.”

Other employees confirmed that Makers Line project managers were required to use JAG Equipment for rentals on job sites. JAG would rent equipment from other rental companies and then mark up the price by 20-25 percent, the employees said.

In the November letter, the employee wrote that trades on the team of teams were “dramatically overcharging compared to competition.”

“Overpaying adds stress and takes money out of our bonuses without any appreciable benefit to us or our jobs,” the employee wrote.

Being fast to collect money from developers and investors and slow to pay subcontractors meant Makers Line could use money to keep growing and taking on more work, multiple employees said. It could buy several months of cashflow that could then be used elsewhere in the company, the employees said.

“The effect is that the investors get charged by the bank for the interest on those loans,” an employee said. “Q Factor and Makers Line are the beneficiaries of someone else paying the interest for work that has not been done yet.”

Work continued scaling up and Makers Line continued hiring new workers up until shortly before it all came crashing down in late October, though multiple people said cracks began to show around September 2022.

The quick growth apparently opened the companies up to possible fraud, and five separate employees, including three who were familiar with accounting, said there were apparently fraudulent invoices submitted by Titus.

Heading into the holidays, scores of employees still haven’t received their final paychecks or other benefits they earned before the Winklers’ companies collapsed.

While Makers Line has dissolved and is no longer in business in Utah, the fallout isn’t finished.

Makers Line used non-fire treated lumber on a project called Union Walk in Ogden. City officials are requiring the building to be demolished.

Trouble in Ogden

In his first week as senior superintendent of a new apartment building that was under construction in Ogden, Mike Thompson saw that the wood delivered for framing wasn’t right.

The plywood was appropriately rated for fire resistance, Thompson said. But the studs weren’t.

“The studs were non-rated,” Thompson said. “Me and the project manager ran an email up to the president of the company and he said, ‘Don’t worry about it, keep building.’”

Thompson said Foster ordered a fire retardant spray from a company called Flame Stop to apply to the studs. Workers also applied red dye to the lumber so they could see what had been sprayed and what hadn’t, Thompson said.

“We didn’t hide the fact that we were spraying the Flame Stop on there,” Thompson said.

Construction on the project, known as Hunter’s Landing, continued until Ogden shut down construction. Work was also stopped on a separate project by the same developer, Summa Terra Ventures. The second project was known as Union Walk and was being constructed on historic 25th Street.

Thompson said he didn’t know why Makers Line ordered the studs if they weren’t fire-treated.

“Fire rated lumber is not only more expensive but it’s got a heavier lead time,” he said. “I’m sure there were cost differences and time to procure the material differences.”

Foster declined to comment for this article.

One source familiar with constructing apartment buildings estimated fire treated wood would cost more than wood that wasn’t treated.

Mike Watson, the developer behind Hunter’s Landing and Union Walk, publicly blamed Makers Line for the stopped work on the projects.

Watson worked with the city of Ogden to rectify Hunter’s Landing and continue building that project. Union Walk proved irreparable, and not just because of the non-fire treated wood.

The city found there were “numerous structural deficiencies throughout the building,” including sagging floor joists, non-code compliant structural connections, framing members bowing due to bearing weight overload,” and a host of other issues.

On Dec. 12, Watson filed for a demolition permit to tear the building down to the foundation, a city representative confirmed.

It’s not clear how much money Summa Terra might be out as a result of the construction issue, though such a failure would likely cost millions of dollars. It’s also not clear at this point who is at fault.

The allegations of faulty construction aren’t the first ones made against Makers Line projects.

Industry SLC is also in court with one of its previous tenants, the bio-health company Recursion, over Recursion’s decision not to honor its lease in the building.

In counter claims filed in court, Recursion said construction defects within Industry SLC, including a fire wall that didn’t meet specifications, allowed it to break its lease. Recursion alleged this year that there are structural deficiencies within Industry SLC.

The issues in Ogden came to light at a time when the development pipeline nationwide slowed rapidly. A spike in borrowing costs caused by the Federal Reserve’s rapid increase in the federal funds rate made it difficult for projects to pencil.

Paired with the high cost of land and construction in Utah, the landscape in 2023 was far different from the first few years of Makers Line’s growth.

It all exacerbated what became compounding financial issues for the Winklers and their companies to address.

Mounting liens and transferred property

On Oct. 30, in the wake of the collapse of their companies, the Winklers transferred their $2 million home on the East Bench to Ellen Winkler’s brother, Gregg Pacchiana, according to county records.

On Nov. 16, Jason Winkler borrowed $3 million from Pacchiana for a west side project known as Chicago Street Townhomes, which the Winklers co-own and which is unfinished. The loan is secured by the Winklers’ equity in the project.

In June, the Winklers took out a $1 million line of credit against their home and 10 acres near Snow Basin in Huntsville. That property was listed for sale in the days leading up to Makers Line’s collapse for $1.85 million and is under contract.

It’s hard to decipher what moves have been made for what reason. The long list of companies registered by the Winklers also makes it difficult to track the entirety of their investments. They still maintain active companies in Colorado.

But it is clear that the team of teams in Utah is done.

H. Jason Winkler dissolved Makers Line, Forge, Titus and BHS Rockers on Dec. 1, according to documents filed with the state. JAG remains an active business. Makers Line is also an active company in good standing in Colorado.

Meanwhile, liens and lawsuits continue to be filed against them and their companies.

As of Dec. 13, construction companies and material suppliers have filed liens that amount to over $3.2 million against properties where the Winklers’ companies worked. That puts at risk of foreclosure construction projects including a mid-rise building in Sugar House, an affordable housing project near Downtown known as Bueno, a project known as the Whitney in Ballpark and more.

On Dec. 4, 2023, the state of Utah issued a tax lien against Ellen Winkler for $131,385. There was no additional information shared with the filing in state court.

There is a recent lawsuit against Makers Line AZ naming Jason Winkler and Tim Foster and alleging they owe over $489,000 to a general contractor in Arizona named David Fina. In the complaint, Fina alleges he, Winkler and Foster were co-owners of Makers Line AZ, and that they planned to work on two construction projects in that state.

Fina alleged that the project owners submitted money into an account to help pay for construction.

He said Winkler was late to pay Makers Line AZ employees twice, and that subcontractors weren’t paid.

Fina alleged that “Mr. Winkler and/or Mr. Foster began transferring funds from Makers Line AZ to Makers Line, LLC,” worth hundreds of thousands of dollars.

“Defendants have no justification for taking and keeping that money in contravention of the Agreement and it appears to be just another step by Mr. Winkler to shuffle money around his ever-collapsing business operations,” the complaint says.

Fina alleged the three agreed to dissolve the partnership, that Foster and Winkler repaid $408,000, but that they still owe him the remainder.

The bigger marquis numbers are headline-worthy. But they don’t tell the full story.

In addition to the Makers Line and affiliated employees who say they haven’t been paid are a growing list of companies who say they completed work for the Winklers’ companies but never got paid.

That leaves them on the line to find a way to make payroll heading into the holiday season.

“I know they owe a lot of people a lot more than us,” said Sue Terry, whose firm Terry George Construction filed a $52,000 lien against a property a Makers Line-affiliated project in Millcreek.

“We’re just a little company, so it’s really hard to swallow when you don’t hear anything,” Terry added. “We’re not a big company, so $50,000 is huge. Huge.”

Email Taylor Anderson

Sign up to get free Building Salt Lake emails in your inbox.Building Salt Lake Pro and Premium Members can search for any building permit in Salt Lake City. Stay in the know in the market by becoming a Member today.

Share Post

Posted by Taylor Anderson

Taylor Anderson grew up near Chicago and made his way West to study journalism at the University of Montana. He's been a staff writer for the Chicago Tribune, Bend Bulletin and Salt Lake Tribune. A move from Portland, Oregon, to Salt Lake City opened his eyes to the importance of good urban design for building strong neighborhoods. He lives on the border of the Liberty Wells and Ballpark neighborhoods.