Collinsville Holiday Inn to hit auction block in May

Renovation costs come close to $250,000

By Elizabeth A. Lehnerer

Suburban Journal, Collinsville, IL
Published Monday, March 24, 2008

The state is planning to put Collinsville's Holiday Inn on the auction block later this spring and officials have high hopes that it will at least earn back some of what has been put into the property.

Since being purchased by the Illinois State Treasurer's Office last year, the hotel has been outfitted with a new heating and cooling system and 31 of the 229 rooms are in the process of being completely refurbished with new walls, carpet and furniture.

Scott Burnham, spokesman for Illinois State Treasurer Alexi Giannoulias, said that the work is expected to be complete at the end of April."Those rooms weren't up to hotel standards," Burnham said. "Those are improvements that were needed so they could be used by guests."

He said that the state is close to announcing the name of the national real estate firm that will auction the property at the end of May.

Giannoulias's office in October purchased the property for $25.4 million. The full-service hotel had been in trouble since 1998 when owners B.C. Gitcho and Gary Fears stopped making payments on a state loan. At the time of the purchase last year, the property had an outstanding debt of $32 million in principal and interest on the state-backed loan that was originally for $13.4 million.

Burnham said that the Treasurer's Office isn't speculating on how much they'll receive with the sale but hopes are high.

"Obviously, we will not recover the entire amount owed on the hotel, but our goal is to get back as much as we can," he said.

New paint on the walls and mattresses on beds weren't the only changes, said Biff Hawkey, spokesman for Hostmark Hospitality, the Chicago company that took over the management of the hotel.

"When we first got the receivership there were a lot of life safety issues that needed to be addressed," said Hawkey, who pegged the final price tag for the renovations project at nearly $250,000. "They put in new banisters and lighting. And we have people ready to paint the exterior of the building when the weather permits."

Hawkey said that Hostmark employees, which make up the hotel's management staff, could remain at Collinsville's Holiday Inn depending on who purchases the hotel.

He said that about 95 percent of the 145 employees are local residents who will continue at the hotel even with a new owner.

Collinsville Community Development Director Paul Mann said state representatives have been "great to work with" and that they're working with the city and representatives of the Gateway Center to "make sure we have a quality hotel leader taking over the site."

Cindy Warke, executive director of the Gateway Center, said the convention center has a high interest in the hotel's success.

"What's most important to the representatives of the (Gateway Center) is that the buyer continues to offer all the various amenities that convention delegates are accustomed to and that the property is restored to its original condition," she said.

Warke said that with the city's proximity to five major interstates and only 10 minutes from Downtown St. Louis, "the Collinsville Holiday Inn is a viable investment for any hotel operator."