Sweetheart Springfield hotel deal over?

Clout-heavy investors haven't paid state in 5 years

By Dave McKinney

Chicago Sun-Times, Chicago, IL

Published Wednesday, January 16, 2008

SPRINGFIELD -- A Sangamon County judge has ordered the foreclosure of a Springfield hotel built by a consortium of investors that included GOP powerbroker William Cellini.

The move means the property is closer to a possible auction by state Treasurer Alexi Giannoulias to recoup part of the $29.5 million the investment group owes taxpayers for a 1980s state-backed construction loan.

In 1991, in the final days of former Gov. James R. Thompson's last term, Cellini secured a controversial sweetheart deal in which his investment consortium didn't have to make payments on the loan so long as the hotel didn't turn a profit.

2 payments in 1 decade

During the past decade, the Cellini group made only two payments to the state and none in the last five years. The bill to taxpayers for unpaid principal and interest on the original loan rises by $2,300 per day, Giannoulias' office said.

Giannoulias has commissioned a forensic audit to determine whether the business truly lost money to the extent the investors claimed.

"After 25 years, we need to finally put an end to this ordeal once and for all," the treasurer said. "It's dragged on for far too long and cost the state far too much money."