Springfield's Lincoln Hotel in foreclosure; state hopes to sell it off

By The Associated Press

The Southern Illinoisan, Carbondale, IL

Published Wednesday, January 16, 2008

SPRINGFIELD, Ill. — A foreclosure order on a state-backed Springfield hotel ends "a 25-year political and financial debacle,'' Treasurer Alexi Giannoulias said Wednesday.

A Sangamon County judge foreclosed on the President Abraham Lincoln Hotel and Conference Center earlier this week. Giannoulias said he hopes within about two months the state can get control of the building and sell it.

The hotel, formerly known as the Renaissance Springfield Hotel, was built with $15.5 million in state loans in 1982 but the owners owed $29.5 million and have made only two payments in the past 10 years.

"After 25 years, this ordeal, this financial and political debacle that has drained the state of millions and millions of taxpayer dollars has finally come to an end,"' Giannoulias said at a state Capitol news conference.

Stephen Tagge, the lawyer representing the hotel's owners, said the state made a deal with the owners they wanted to enforce. But fighting the matter would take several more years and it was best for the hotel and city to move forward with a new owner, he said.

The original loan was restructured in 1990, requiring the owners to make payments only when the hotel showed a profit.

The building has not been appraised. The state won't get $30 million from a buyer, Giannoulias said. But he said it should bring in more than $3.7 million, the amount for which his predecessor was willing to settle the loan in 1995 before the attorney general squelched the plan.

The state took control of a Collinsville hotel built at the same time with loans that were not repaid and has put it up for sale.