Jan 16, 2008 5:59 pm US/Central
State Treasurer To Run Springfield Hotel For Now
Political Insiders Who Built Hotel Owe Taxpayers $30M
CHICAGO (CBS) ―
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Political insiders built the Abraham Lincoln hotel in Springfield in the 1980s using millions of tax dollars and now owe the state more than $30 million.
CBS
The state of Illinois is about to get into the hotel business, at least temporarily.
Political insiders built the Abraham Lincoln hotel 25 years ago using clout and millions of tax dollars. They made just two payments on the place and now owe taxpayers more than $30 million.
CBS 2 Political Editor Mike Flannery reports that State Treasurer Alexi Giannoulias plans to run the Springfield hotel until it can be sold.
While it's had lots of names, it's now called the President Abraham Lincoln Hotel.
Honest Abe might have objected loudly, though, to the sweetheart deal that gave away millions of the Land of Lincoln's tax dollars to hotel investor William Cellini and other clout-heavy insiders.
Now, in Sangamon County, where Cellini once presided as chairman of the local Republican Party, a judge has ruled that the state treasurer's office can seize the hotel and resell it, finally.
"What would happen if in the last ten years you only made two payments on your house? It would have been taken from you a long time ago," Giannoulias said.
He reported that, contrary to Cellini's claim that the hotel almost always lost money, in fact it made more than $1.4 million in profit just last year.
In the 1980s, Cellini's ally, then-Gov. Jim Thompson, said alleged losses were a reason to sweeten Cellini's deal further.
"The loans need to be restructured to give them a chance. They're only being stretched out two more years and we'll earn more money on the interest to be paid, even under the restructuring, than the treasurer can earn if he cashed in the loans and invested the money today," Thompson said at the time.
Though the state will soon own the hotel, it will be operated by the management company Hostmark. A judge put them in charge last March.
What is the lesson? Giannoulias said "The lesson is, we shouldn't be in the lending business, especially to people who are cronies and friends of political organizations."
Giannoulias plans to sell the hotel at auction this year.
We called William Cellini at his current powerbase, the Illinois Asphalt Pavers Association that he founded.
We were told he was in today. He has so far failed to respond with any comment. Sources report that Cellini is now one subject of the FBI's ongoing investigation of corruption in state government.
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