|By Ray Long, Chicago
TribuneMcClatchy-Tribune Regional News
December 15, 2009 --A Springfield hotel with a long-troubled state loan was auctioned Monday for $6.5 million -- tens of millions of dollars less than what the state is owed.
State Treasurer Alexi Giannoulias, who is expected to approve the winning bid, has sought since the start of his term in 2007 to end the state's decades-long involvement in what he called a "sad saga of Illinois politics." But he said he would never be satisfied that the state couldn't recover all of the $30 million owed -- roughly half of which is from interest alone.
Steve Horve, an owner of hotels in Illinois and Michigan, delivered the winning bid in a live auction, saying afterward he got a good deal on the business currently operated as the Abraham Lincoln Hotel and Conference Center.
He estimated it would cost $35 million to build such a hotel.
The hotel was built under a loan arrangement during the tenure of Gov. James R. Thompson, a Republican, and Treasurer Jerome Cosentino, a Democrat, in 1982.
A key investor in the Springfield hotel was William Cellini, a longtime Republican power broker who has been indicted in the unrelated corruption case against ex-Gov. Rod Blagojevich, a Democrat.
Thompson and Cosentino bargained the terms down favorably a couple of times.
"I don't know how they didn't make any money here," said Horve, a developer from Decatur, where he owns two hotels.
With the sale, more than $1 million made under state management over the last year and the recovery of a $5.7 million surety bond, the treasurer's office was able to collect about $13 million, according to Giannoulias, who is seeking the Democratic nomination for U.S. Senate.
Giannoulias predicted his office would accept the bid within days pending a financial review.
Under former Republican Treasurer Judy Baar Topinka, the loan would have been settled for $3.3 million and the original owners could have kept the hotel, said Scott Burnham, Giannoulias' spokesman.
Topinka has argued the state would have benefited by having the money to invest sooner under her 1995 offer.
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