Imagine if, after ignoring your mortgage payments, you persuaded 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 youre an average homeowner, youre probably thinking dream on.
But this scenario is very real for a particular group of influential investors who received a state-backed loan two decades ago and now owe more than $28 million after failing to pay up.
As Illinois new state treasurer, I serve as the states banker. It is my job to protect the interests of the states shareholders, the citizens of Illinois. When it comes to this sweetheart deal, I say enough is enough.
The foreclosure proceedings that are currently 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, the investors have 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.
After all the back-room deals and unfulfilled promises, 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 operation so it can finally turn a profit.
At this point, foreclosure will allow the state to auction off the hotel to the highest bidder, generating the maximum return for taxpayers. The only parties harmed by the foreclosure action are the borrowers, who will have to pay taxes on the loan and whom we cannot afford to let off the hook.
Having inherited this financial boondoggle when I took office earlier this month, I will not allow it to fester and cost the state and taxpayers more money than it already has.
i>From the Feb. 14-20, 2007, issue