Collinsville Holiday Inn up for sale

By Adam Jadhav
St. Louis Post-Dispatch, St. Louis, MO
Published March 26, 2008

The beleaguered Collinsville Holiday Inn will officially go on the auction block May 13 as officials hope to move the property off state books in time for summer.

The announcement Wednesday is likely one of the last in a tortured history. Part of a large economic development program in 1982, the hotel was built with more than $13 million in state loans that were never repaid. It has been a boondoggle for state treasurers ever since.

The owners repeatedly claimed financial hardship and refinanced their loans. In 1995, they had tried to buy the property outright for a negotiated sum of $6.3 million, but political infighting in Springfield killed that deal. The debt now has grown to more than $32 million.

State treasurer Alexi Giannoulias began foreclosure at the beginning of last year and the state appointed a new management company which almost immediately began turning a profit. The state officially gained the deed to the property in October and had promised to market it nationally.

The state has alleged serious financial mismanagement and outright theft kept the property in the red.

"The hotel has been a burden on taxpayers for far too long," Giannoulias said in a statement. "We intend to sell the hotel to relieve the state of this debt and also benefit the Metro East economy by ensuring the long-term success of this hotel."

Chicago-based Sheldon Good & Company will handle the auction, promoting the sale across the country, accepting bids and analyzing them afterward. Bidding takes place on May 13 and closes at 5 p.m. that day.

How much the state will actually recoup has always been the money question. State officials aren’t disclosing their own appraisals, said Scott Burnham, spokesman for Giannoulias’ office. They’re waiting to see "what the market will dictate."

At a judicial sale in October -- the last stage in foreclosure -- the state set the opening price at $25 million. As was expected, no one made an offer and the state took control.

According to 2007 county tax records, the property’s appraised value is just shy of $8.9 million. Keith Baldwin, a hotel owner from Greenville, attended the sale in October and was willing to bid as much as $7 million. At the time, he said, the hotel wasn’t worth any more.

More improvements have been made to the property, including renovations of 30 rooms and replacement of some heating and cooling systems. Officials say the property has lots of potential situated in a business district adjacent to one of the largest convention centers in the St. Louis area.

Sheldon Good will present the bids to Giannoulias on May 19 for a decision.

Separately, the state is pursuing civil actions against the local developers Gary Fears and B.C. Gitcho for $1.5 million. Giannoulias’ office has also shared documents relating to the hotel’s finances with prosecutors.