Imagine if,
after ignoring your mortgage payments, you convinced your bank to
renegotiate the terms of your loan, dropping the interest rate and
giving you more time to pay it off. Then imagine that despite making
only two payments in nearly a decade, you still owned your home. If
you’re an average homeowner, you’re probably thinking “dream on.” But
this scenario is real for a group of influential investors who received
a state-backed loan two decades ago.
As Illinois’
new state treasurer, I serve as the state’s banker. It is my job to
protect the interests of the state’s shareholders, the citizens of
Illinois. When it comes to this sweetheart deal, I say enough is
enough. The foreclosure proceedings under way against the owners of the
President Abraham Lincoln Hotel and Conference Center in Springfield
will finally bring an end to this ugly chapter in Illinois politics.
In 1982, the
hotel investors received $15.5 million from the state to build the
hotel. Even after former state powerbrokers let them off easy by twice
renegotiating the loan and inking favorable deals for their benefit,
investors failed to make good on the loan. The state has only received
two payments since 1997 and none since 2002, resulting in $28.4 million
owed in unpaid principal and interest.
The best
course of action is to pursue foreclosure and receivership proceedings.
The hotel owners have failed repeatedly to honor their obligations to
the state and do not deserve the opportunity to cut yet another deal at
taxpayers’ expense.
Placing the
hotel in receivership is the equivalent of hiring a new manager. This
is the best way to protect the hotel from falling into further
disrepair, protect jobs and revive the operations so it can finally
turn a profit. At this point, foreclosure will allow the state to
auction the hotel to the highest bidder, generating the maximum return
for taxpayers.
Having
inherited this financial boondoggle when I took office, I will not
allow it to fester and cost the state and taxpayers more money than it
already has.
Alexi
Giannoulias
Illinois state
treasurer
Chicago
Letter to the Editor
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