National real estate firm selected to sell property
Springfield, IL—(ENEWSPF)— The state will hold an auction in May to sell the Collinsville Holiday Inn to a new owner, finally ending the state’s ill-fated saga of granting multi-million dollar loans to politically connected insiders, Illinois State Treasurer Alexi Giannoulias said today.
Giannoulias also announced that Chicago-based Sheldon Good & Company, a national real estate auction firm, will conduct the sale of the hotel.
Sheldon Good will accept sealed bids from prospective buyers until 5 p.m. on Tuesday, May 13. Sheldon Good will then pre-qualify all bidders and analyze each proposal before making a formal presentation of the bids to the Treasurer’s Office on Monday, May 19.
Installing a new owner for the Collinsville hotel will finally put an end to the 25-year financial debacle that enabled a group of political insiders to secure an outrageously favorable $13.4 million state-backed loan. The owners soon fell behind on payments and the outstanding principal and interest ballooned to $32.2 million.
“The hotel has been a burden on taxpayers for far too long,” Giannoulias said. “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.”
Days after taking office in January 2007, Giannoulias took action to install a court-appointed receiver to manage the day-to-day operations at the 228-room hotel. In October, Giannoulias held a judicial sale to take title of the property from the owners. In its latest report filed in court, the hotel’s receiver – Hostmark Hospitality Group – revealed the hotel had earned a net profit of $586,000 from January to November 2007, compared to a loss of $818,000 during the same time period in 2006, resulting in a difference in reported income of more than $1.4 million.Giannoulias has forwarded more than 100,000 documents relating to the hotel’s finances and
operations to the U.S. Attorney’s Office to determine if any wrongdoing took place. Sheldon Good & Company is a real estate auction firm and was chosen as a result of a competitive bidding process. Headquartered in Chicago with offices in five U.S. cities and Mexico with affiliates around the world, Sheldon Good is the nation’s largest real estate auction firm for commercial, residential and hospitality properties.
Sheldon Good provided the most qualified and comprehensive response to the state’s RFP issued last December.
“We are working hard to gather all of the information bidders will need to effectively evaluate the hotel’s tremendous potential,” said Alan Kravets, president of Sheldon Good & Company. “We anticipate the timing of the auction sale will be perfect for the new owner to take advantage of the busy summer months.”
Prior to the auction, Sheldon Good plans to use its own money to advertise and market the hotel property on a national and international level to attract as many potential buyers as possible. Since gaining title to the property, the Treasurer’s Office has sought to make improvements to the hotel in an effort to enhance its value prior to sale. The improvements have included renovations to 30 rooms and the installation of a new heating and air conditioning system in the hotel’s main ballroom.
Cindy Warke, executive director of the Gateway Center, which is located next to the hotel, believes the hotel’s proximity to the 105,000 square-foot convention center, Gateway International Raceway and downtown St. Louis makes this property a viable business and a sound investment for a hotel operator.
“The center’s ability to attract and retain regional, national and international conventions and special events largely depends on having convention quality accommodations and especially a convention-worthy hotel,” Warke said. “The hotel is virtually situated in a hospitality business district comprised of numerous restaurants and attractions.”
Warke added that the Illinois State Treasurer’s Office has done an “exceptional job” of keeping representatives of the City of Collinsville and Gateway Center abreast of their plans to auction the hotel.
In Springfield, the Treasurer’s Office has taken similar steps to auction the President Abraham Lincoln Hotel. Giannoulias effectively gained title of the Lincoln Hotel through a judicial sale conducted on March 5 and plans to hold an auction to sell the property within the next six months.