Judy Baar Topinka had always been a favorite with the voters and the media. Her frankness and quotability helped her move up from state senator to state treasurer in the 1994 Republican sweep, and “Governor Topinka” didn’t seem out of the question someday. But on April 26 she suddenly found herself alone in a cross fire of words.
Topinka battled back. She pointed out that Quinn had settled a similar hotel loan at a loss in 1992 when he was treasurer. She called the U. of I. professors’ report “armchair speculation from Monday-morning quarterbacks” and asked sarcastically that they refer any $13 million bidders to her. She still insists $10 million was the most she could get.
On August 11, 1982, Thompson and Democratic state treasurer Jerome Cosentino announced the formation of the Illinois Insured Mortgage Pilot Program, which (1) was bipartisan, (2) was perfectly legal, and (3) had a fashionable public-policy cover story. Thompson and Cosentino complained that investors were irrationally deserting Illinois for the sun belt. “Dollars earned in the state of Illinois are placed in the hands of banks, insurance companies and pension funds and continue to be used to create jobs and strengthen the economic base elsewhere in the country,” they declared. “As a result, many prudent and worthy development projects [here] are left without adequate available financing resources.” Under IIMPP taxpayers were to help out these developers by making the sort of loans the private sector wouldn’t.
The loans weren’t intended to be long-term, and most of them weren’t. Five years later, in July 1987, the state had over half of its money back. But $50 million–over a third of the original amount–was still outstanding, most of it in three big loans for hotels that had quickly got into deep trouble:
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$15.5 million to a partnership headed by longtime Republican fund-raiser and insider William Cellini for the Ramada Renaissance, a luxury hotel six blocks from the state capitol in downtown Springfield. (The taxpayers wound up sinking even more into this hotel, because the city of Springfield took a $3.1 million grant from HUD and loaned it to the venture–a loan that’s still outstanding. This summer the city’s budget director told the Illinois Times that payments on it haven’t even kept up with the accruing interest charges.)
The fathers of IIMPP had a choice–a choice that they and their successors would face again and again in the next few years: They could act, or they could postpone the day of reckoning. They could foreclose on the loans, take title to the hotels, and sell them, probably at a loss. Or they could renegotiate (“restructure”) the loans, let the borrowers keep the hotels going, and hope for better times.
