We heard those words repeatedly when Wall Street banks were going broke and the federal government swooped in to bail them out – with our money.
The arrangement was a deal with the devil. But both George W. Bush and Barack Obama said we should just hold our noses because so much of the country’s economic success depends on those firms’ viability.
We are hearing a similar argument made here in Springfield. The Wyndham Springfield City Centre – that 348-foot erection in the downtown – has received a $240,000 bailout. The hotel is owned by TowerCapital Group, a Texas-based company controlled by investor Al Rajabi.
Rajabi bought the Wyndham in a foreclosure sale in 2019 but occupancy sagged in 2020 as fewer people traveled during the pandemic. He fell behind on his utility bills.
Mayor Jim Langfelder, with the swipe of a pen, made $243,068 the hotel owed City Water, Light and Power disappear; the city was able to recoup about $1.2 million. He swears up and down the city council gave him the green light to forgive the debt when they met behind closed doors back in November 2021.
Baloney.
In Illinois, a public body can’t make any official decision in secret. All votes have to be done in public. Since there was no public vote, the decision to write off the debt is Langfelder’s alone.
It doesn’t matter how many attaboys he got from city council members behind closed doors or that some encouraged him to cut the best deal he could. They didn’t vote one way or another.
Success has many fathers, but failure is an orphan.
Mayor, it can be lonely at the top – especially when the top is a 348-foot architectural monstrosity that screams 1970s louder than a Farrah Fawcett hairdo or a polyester leisure suit.
If he wanted the city council to share the credit – or blame – he should have asked for a public vote. It didn’t happen, so now he bears sole responsibility.
The mayor says the continued prosperity of the downtown depends on the viability of that building. Its hotel rooms are critical to the city’s convention and tourism trade. Downtown bars and restaurants will suffer if there are fewer guests.
I won’t argue that.
But capitalism is about risk and reward. Rajabi snatched the property up thinking he could make a tidy profit. But when business went south, he sought and got a handout.
Conservatives call that “crony capitalism.” Liberals call it “corporate welfare.” Let’s just call it plain wrong.
When government intervenes like this, it’s unfair to the motels and hotels that have to compete against a subsidized competitor. More importantly, it’s not how the system is supposed to work.
Rajabi chose to take a risk when he bought the building because he believed he could turn a profit. Now that the profit didn’t materialize, he’s found a way through political connections to not pay his debt to the city.
Imagine not liking the size of your utility bill and calling up someone you know at city hall to make it go away. Seem far-fetched? It is if you are an ordinary resident or small business.
But if you own the tallest building in town, you can do just that and say, “I’m too big to fail.”
It is a pretty good deal if you can get it. Rajabi’s profits remain his, and his losses, well, they become ours.
Scott Reeder, a staff writer for Illinois Times, can be reached at sreeder@illinoistimes.com.
This article appears in A push to diversify.
Well stated Scott!
Once again this is a perfect example of government picking winners and losers. Let free enterprise decide that. It is so unfair to other local businesses for this one to be subsidized at taxpayer expense. If the Wyndham would like to have occupancy rates that mirror other local hotels, make the investment in modernization and remodeling and improve the facility.
There are other local business groups who are also severely in arrears on their utility bills with CWLP and there needs to be definition to how far they get carried before being shut off. This avoids the utility getting into the situation where they get backed into a corner and are forced to either negotiate a settlement or lose the principal. These decisions need to be made in the public forum and voted on by council.
Also there is the situation with the 911 system being located on top of a private business and that was used as the reason why the city was forced to carry the Wyndham in arrears. What steps are being taken to avoid the 911 system being in jeopardy again as a result of lack of payment by this group?
Another excuse for carrying the Wyndham so severely in arrears was that it was being considered as a temporary housing unit for Covid patients, yet when asked for details from the current administration, none could be provided.
Mayors decision to waive the large fees was likely politically motivated. He was likely desperate to get that deal done with Good Homes. He stated that hotel deal by Good homes was his pet project. Not too many positives to point to in his administration. I believe it was mistake not to let Good Home buy and renovate the hotel. Fact is that hotel will never be profitable. It should have been built with 15 floors or less. The San Antonio group overpaid greatly. It was not worth $1. The reno needed of $20 million was more than its value after the reno. So they lose almost 200 rooms rooms to apartments.. better than current situation. Conventions are booked so far in advance arrangements could have been made to allow for the apartments to be available to convention guests. How about short term rentals aka airbnb for the 50 apartments the city wouldnt accept? Now you have a big problem on hand. Good luck finding another person to out 20 million into the reno… I would be calling back good homes asap
This another failure of Langfelder trying to be a developer with our tax funds !
Get out and stay out of the way! You are killing our city !
This should have gone back to foreclosure and sold to someone that wants to rehab it as a hotel . Follow the same successful plan from the hotel across the street when it was in foreclosure !
If the attempt at additional apartment were made this would violate city code on minimum square footage .
. Springfield is in such poor shape economically its now attracting nationwide flippers
Very well written article!
I am just baffled by this. At first I was upset with the amount forgiven but as more information came out such as the amount the owner did pay, the audio from the meeting, the 911 tower and now it was released a CWLP tower, it sounds as if the Mayor did what a Mayor would do. The funny thing is is if the Mayor would have listened to Alderman Ralph Hanauer and Chuck Redpath (from the tape) the city would have received 600 to 700 thousand dollars less. Do I think the debt forgiveness is political as the article states? No I do not. Do I think this is being made political because an upcoming election? Yes I do. What scares me is what happens if we don’t help the largest hotel downtown? In a recent debate candidate Buscher spoke about being a sanctuary city for illegal immigrants and how “she will greet the buses”. Is that where they will be heading to? Be glad the city collected 1.2 million dollars and move on.
Terry there is no 911 equipment located at the top of the PP. The fact that Springfield has been dying since the 70’s and is so blighted that visitors laugh when they pass through to only get gas and stop elsewhere to stay.
The executive session happened November 2021. The payment was made in mid October 2022. This was not brought to anyone’s attention until Mayoral candidate Misty Buscher’s WMAY article on January 12, 2022. If no Alderperson leaked private Executive Session discussion, then she would have found out when the payment was made in mid October 2022. She stated she cares about taxpayers and where their money is going. She is 100% about transparency but fails to bring this to light until 3 months closer to election after the holiday season when campaign season heightens? Give me a break. This is completely political.
I think having having set limits on any fee waiving is important to maintain fairness. Set those limits with an ordinance.
Also why not establish a board made up of citizens from each ward to meet each week to have open discussions with citizens around the City who have falling on hard times that need extra help with paying utility bills, violations or fines. People on this board serve only one year and can only serve once under the same administration. Let the people of the communities make these decisions to help fellow citizens so there it’s no claim to political attachment?