Editorial: Hotels now in public's hands

Champaign News-Gazette, Champaign, IL
Published Tuesday, March 11, 2008

Twenty-five years after they were built, two controversial hotels financed by taxpayers now belong to the taxpayers.

The state of Illinois bought a hotel and convention center last week, the Abraham Lincoln in Springfield.

The purchase was a legacy of the duplicitous politics that have permanently tarred the reputation of the Land of Lincoln. Earlier, the state had bought a Holiday Inn in Collinsville, which was another legacy of rotten politics.

So that makes two hotels the state is running with the help of a hotel management firm. State treasurer Alexi Giannoulias hopes to sell both of them soon in an effort to recover some of the $60 million the state is owed by the hotels' politically connected developers.

The hotel deals occurred under former Gov. Jim Thompson. His administration oversaw loans of roughly $15 million each to two groups of politically connected developers.

One group was headed by Springfield businessman William Cellini, an unindicted co-conspirator in the ongoing Antoin "Tony" Rezko corruption trial in Springfield. Neither group ever made much effort to repay the loans, and the unpaid interest eventually doubled the original debt.

Thompson and former state treasurer Jerome Cosentino later secretly renegotiated the loans, the terms of which were so generous that critics later claimed the developers received a gift from the state. But they never made much of an effort to repay the loans even under the newer, sweeter terms.

At one point, former state treasurer Judy Baar Topinka was going to sell the hotels to the developers for pennies on the dollar. But then attorney general Jim Ryan scotched that deal, and the dispute headed off to the courts.

It took years for the state to get foreclosure orders for both hotels, which are running profits that eluded the previous owners. Eventually, the state hopes to sell the hotels to prominent hotel chains and bring this sorry chapter in insider politics to an end. Hope springs eternal.