Collinsville Holiday Inn Served Foreclosure Notice

As per releases by the Illinois state treasury’s office, The Holiday Inn in Collinsville has been served a notice of foreclosure. The hotel is next to the Gateway Center in Collinsville and has a steak house.

The auction date has been set on October 18th at 1 pm. Originally the hotel had been built from funds borrowed from the state. A foreclosure suit has been filed against the owners for failing to meet mortgage commitments in Madison County Court. The ruling was that in spring the authorities could enforce sale of the unit.

The foreclosure consists of four steps of which the judicial sale is the last measure. The owners are politically well connected consisting of local businesspersons. The foreclosure will deprive them of their title to the hotel. The debt amounts to nearly $31.2 million and has been hanging unpaid since 1998.

The state representatives are doubtful if a satisfactory bidder will be found to meet the minimum requirements of the property trustee, Park National Bank of Oak Park, Illinois. In such a situation the norm is that that bank takes on the title. It is up to the state to sit at the same table with the bank to talk about options for another wider commercial or public auction. Treasury official Giannoulias hopes that a private hotel management firm will come forward and show interest in the matter.

The loan was taken by the present owners of the hotel, against the background of a economic development programme launched by the government in 1982. Originally it amounted to $13.4 million. The owners have renegotiated terms repeatedly and do not seem serious about repayment. On their part the owners are grumbling that the project has never brought in profits. Government investigators report that the management has been lackadaisical. Moreover the accounts have raised suspicions of federal prosecutors. One of the owners is B.C. Gitcho based in Granite City. He is crying himself hoarse in strongly denying the charges that he has either stolen of made wrong use of the property of the hotel or its funds.

At the time of initiating foreclosure action by the state during the first part of this year, the court appointed a management company to take over the running of the administration. Subsequently a profit exceeding $5000,000 has been reported during the first six months of this year.

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