State Treasurer to Become Hotelier

By Kevin Robinson on Jan 17, 2008 3:26PM

Illinois State Treasurer Alexi Giannoulias announced yesterday that the state is getting out of the loan business. On Monday, Sangamon County Circuit Court Judge Patrick J. Londrigan signed the foreclosure order on the Abraham Lincoln Hotel and Convention Center, the first step in removing ownership from the politically connected powerbroker Bill Cellini. Although the owners quickly fell behind on payments, the loan was restructured in 1990, ensuring that the owners didn't have to repay the loan as long as the hotel didn't turn a profit. As a result, only two payments have been made on the loan in the last ten years.

A second hearing is scheduled for Friday to address a $3.1 million loan made by the city of Springfield to help with the hotel’s construction. Giannoulias isn't interested in running the hotel, though. He's anticipating selling the property at auction to try to recoup some of the $29.5 million owed on a $15.5 million state-backed loan made in 1982. The Treasurer has made foreclosing state-backed hotels that default on their loans a priority since taking office. Last fall his office concluded the foreclosure and sale of the Collinsville Holiday Inn, whose politically connected owners had defaulted on about $31.2 million. “The days of sweetheart deals and cronyism at taxpayer expense are over,” Giannoulias said in a press release.

Image via Yahoo Travel