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Smoke continues to billow, but is there a real fire?

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Illinois

* I’m still not convinced that there’s a real fire here, but the story completely plays right into the public’s notions about how state government has always worked. WCIA TV’s Mark Maxwell continues to pursue the story about the old Barney’s Furniture store lease…

Business owner and Republican Procurement Board Chairman Frank Vala knew when he allowed a $2.4 million lease agreement to be approved that it would benefit the daughter and son-in-law of his longtime friend [and neighbor] Bill Cellini.

“I’ve known Mr. Cellini all of my life,” Vala said. […]

State documents filed in February 2017 list Claudia as the sole President of New Frontier Developments, even though she has lived in Dubai for several years. It remains unclear whether she plays an active role in directing the business. William Jr. is no longer listed as an executive.

WCIA has learned Claudia Cellini’s husband, Raffi Vartanian, is separately listed as a one-third owner of Climate Controlled Holdings, LLC. The company just opened for business in February of 2016. In 14 months, the infant corporation has managed to purchase a 62,000 square foot warehouse and immediately lease it to the state of Illinois at a remarkable premium. State documents reveal the privately held company began with a mere $15,000 cash on hand.

Climate Controlled Holdings bought the old Barney’s Furniture Warehouse for $575,000 on January 3rd, 2017. State documents were already being prepared to obtain a government lease five months prior — in September of 2016 — before the warehouse sale was even completed. Less than one month later, the state of Illinois had entered into a binding agreement to pay a minimum of $2.42 million to the upstart company in exchange for a 5-year lease of the facility. […]

Asked how long he’s known Claudia Cellini, Vala answered, “Since she was a little kid.” Vala confirmed he also knows about Cellini’s husband, Raffi, and says he’s even met him in person.

Go read the whole thing and watch the video.

There was no formal vote to approve or disapprove, but the procurement board could’ve voted if it wanted to. According to the story, the board has never stopped a request during Rauner’s term.

* To be super clear here, none of this is illegal on its face. Bill Cellini did his time and he’s no longer involved with the company and there’s zero hard evidence that his kid or his son-in-law did anything at all improper here. The lease was put out for bids and the state chose the lower bid. Yeah, the lease price is high, but lease prices are rising for the state because it isn’t paying its bills. It couldn’t buy the property because it has no appropriation authority to do so. Everything can be logically and reasonably explained.

But, man, this story has almost everything to make it appear to be a perfect “Illinois way” saga.

posted by Rich Miller
Friday, Apr 7, 17 @ 10:09 am

Comments

Not only does it play into the popular mindset, it reinforces previous stories. Heck, I could tell a story or two myself about bids from different companies who all had the same partner. Even though one person was going to benefit regardless, it actually made rating the bids easier because the clout factor could be ignored.

But I think part of the reason this has caught fire is it is a good distraction from the budget fight.

FWIW, Rich is right that the State in it’s current situation is going to have to overpay; that’s the premium for the Rauner self-induced debt.

Comment by RNUG Friday, Apr 7, 17 @ 10:23 am
Who owns the other 2/3’s of the company?

Comment by Doubter Friday, Apr 7, 17 @ 10:24 am
It still does not absolve them of their irresponsible decision. Especially considering the state was already holding the files in a building that was FREE. It is this type of irresponsible spending of tax payer money that needs to have punishment. There is absolutely ZERO accountability for irresponsible handling of state funds. I have seen agencies spend millions on applications that go nowhere. ERP will most likely be one of those very instances someday soon.

Comment by OpenYourEyes Friday, Apr 7, 17 @ 10:28 am
Beyond the insider possibility, what’s infuriating is the ridiculously high cost, because the State hasn’t been able to pass any capital appropriations, even for emergencies or small needs like this.

As the Donald would say, sad.

Comment by Sir Reel Friday, Apr 7, 17 @ 10:29 am
Dubai?

Mr. Vartanian doesn’t appear to be your typical Springfield landlord.

If you go samuelhall.org, an international consulting firm where Vartanian is named as an advisor, he lists business interests including shipping out of Djibouti and “fruits and nuts” exports out of Afghanistan.

I think my last Springfield landlord had a piece of a tavern in Lincoln.

Comment by wordslinger Friday, Apr 7, 17 @ 10:32 am
This makes the SUV look like chicken feed.

Comment by Norseman Friday, Apr 7, 17 @ 10:34 am
Whatever it is, it’s Madigan’s fault!

Comment by Anonymous Friday, Apr 7, 17 @ 10:35 am
== this story has almost everything to make it appear to be a perfect “Illinois way” saga. ==

Yep. The attack ad writes itself: “He promised to ’shake up Springfield’, instead Bruce Rauner helped the family of a convicted political fixer ’shake down Springfield’…”

I also think paying state employee bonuses will be weaponized and turned into a “shake down Springfield” meme for whomever the Dem candidate is next year. You can bet there are more than a few GOP Precinct Committeemen receiving bonus checks.

Comment by Roman Friday, Apr 7, 17 @ 10:37 am
To add to this story someone should check out the Lease of the old Social Security Building on West Monroe in Spfld. It is now housing the State of Illinois Juvenile Justice Dept. wonder how much this lease cost and who owns that building? It has sat empty for years and now all of a sudden the State of Illinois moves in when we have no budget! Just asking!

Comment by Anon Friday, Apr 7, 17 @ 10:42 am
===Everything can be logically and reasonably explained.===

Everything except the fact that the State has gone 2+ years without a budget putting us in this situation in the first place.

Comment by Sox Fan Friday, Apr 7, 17 @ 10:54 am
Sorry, you’ll never make me believe there wasn’t a single space in all of the state of Illinois that these papers couldn’t be stored in until we were in a place to make a cost effective deal for tax payers! This is just more wheeling and dealing in Illinois…very sad!!

Comment by justpeachy Friday, Apr 7, 17 @ 10:54 am
The same Frank Vala senior care extraordinaire who has been taking shots at the Comptroller about aging payments at Rauner’s bidding?

The same Frank Vala who lives in a mansion, but was making snarky remarks in Finke’s column about “maybe” being able to afford a McDonald’s cheeseburger because he’s so down on his luck?

Poor “Burgers” Vala.

Comment by P. Friday, Apr 7, 17 @ 10:59 am
“…the board has never stopped a request during Rauner’s term.”

Pardon my ignorance but is this ‘normal’? Were the current board members appointed by Rauner?

Comment by Cubs in '16 Friday, Apr 7, 17 @ 11:14 am
If the Dwight location was so dilapidated, why was it good enough for female inmates?

Comment by Anonymous Friday, Apr 7, 17 @ 11:15 am
Cubs in ‘16 -
Gov appoints Chair, Four Tops each appoint 1 person. Under Quinn Bedore torpedoed leases quite regularly.

Comment by Smitty Irving Friday, Apr 7, 17 @ 11:24 am
Tipsters say the Dwight had been rehabbed for this type of storage — T or F?

Comment by Annonin' Friday, Apr 7, 17 @ 11:33 am
“I Seen My Opportunities and I Took ’Em.” ~ George Washington Plunkett

Comment by HonestGraft Friday, Apr 7, 17 @ 11:36 am
False

Comment by Power House Prowler Friday, Apr 7, 17 @ 11:37 am
Thank you Smitty.

Comment by Cubs in '16 Friday, Apr 7, 17 @ 11:38 am
What is the urgency of contracting for a warehouse for old manila folders, given the current fiscal meltdown? How does that rate as a priority today?

Dilapidated? So what, given the times? As long as the old facility was safe for those working there, what’s the rush?

For crying out loud, read the scorecards from the United Way and Responsible Budget Coalitition on the distress and danger to citizens the state is causing by reneging on its contracts.

Under the circumstances, this deal and the extraordinary measures taken to ensure that IT consultants get paid first stink to high heaven of corrupt old Springfield clout.

It would look the same no matter the name of the governor.

Comment by wordslinger Friday, Apr 7, 17 @ 11:39 am
===If the Dwight location was so dilapidated, why was it good enough for female inmates?===

Because inmates are more durable than paper and cardboard.

Comment by Anonymous Friday, Apr 7, 17 @ 11:40 am
Though this will be played (perhaps effectively) as a political issue, my thoughts go more to missed opportunity. Had Rauner chosen to improve the state and not destroy, he could have used his skills to improve how things are done.

It may be cheaper to build than to buy or rent–with a budget and some process change that could have been addressed. I’m supportive of IT enhancements for the state to go paperless. I’m not saying I agree with how it’s being done at present, and I also know it isn’t necessarily less expensive, especially at the outset.

He could have successfully locked in some reform had he approached his first budget in a honeymoon period state of politics. Independent of the destruction he has wreaked on the lives so many, I am saddened by the opportunities to improve the state that he has passed on.

Comment by Earnest Friday, Apr 7, 17 @ 11:40 am
Everything Rauner has done up to this point shows this lease story is not even on his radar. He’s just campainin’ and stoppin’ compromises, stating alternative facts, bustin’ unions and you know, helping grow jobs and stuff.

Comment by don the legend Friday, Apr 7, 17 @ 11:49 am
Chairman has the power to set or cancel meetings. Chairman sets agenda for meetings. If a Chairman doesn’t want something on the agenda, he/she can refuse to put it on the agenda and POOF- the meeting will be cancelled for ‘lack of agenda items’.
It’s intentional and destructive.
And it’s happening on many boards.

Comment by northsider (the original) Friday, Apr 7, 17 @ 11:52 am
===Had Rauner chosen to improve the state and not destroy, he could have used his skills to improve how things are done.===

Rauner’s a finance guy … not a management/operations guy … his expertise/experience is not in “running things.”

For a glaring private sector (and local!) example take a look at Mike Ferro (a la ‘tronc’) … a former biz parter of Rauner.

Comment by Anonymous Friday, Apr 7, 17 @ 12:00 pm
Working for the state for as long as I have, I’ve yet to see us get a good deal. Outlandish rent built in because of our deadbeat status and better than market rate interest as the cherry on top. If you have a good cash position, being a state vendor pays in the end. Taxpayers not so much- thought that was who he was fighting for.

Comment by Sense of a Goose Friday, Apr 7, 17 @ 12:29 pm
Rauner publicly rejected the Cellini endorsement during the election. But he did not drain the swamp.
There’s all kinds of examples that Democrats could point out, but they don’t have the tendency or resources to create third party groups like IPI to fund and report on such research.
Heck, Senate Democrats rarely even question Rauner’s appointments.

Comment by Winnin' Friday, Apr 7, 17 @ 2:01 pm
Yesterday Wordslinger wrote how it appeared the RFP was constructed, tailored to zero in one one particular bidder. Ahem…. I believe that is very likely, and it’s been done for many years.. The process -when corrupted - gives the appearance of an honest win, but behind the scenes they can be manipulated to ensure who the winner will be. It’s the Illinois Way

Comment by Anonymous Friday, Apr 7, 17 @ 3:17 pm
Shakin up Springfield = Business as usual…. for the next generation.

Comment by Baloneymous Friday, Apr 7, 17 @ 3:22 pm
Word, does that make Mr.Vartainian an exporter, or an importer/exporter? Seems like he deserves to be in this deal as much as George Costanza’s beloved alter ego, Art Vandelay.

The thing that is bugging me about this deal is that all involved are getting away with a total Sgt.Schultz act about the other two guys involved in the deal and how they got to the table. If it takes somebody with subpoena power to get that answer, I’m seeing enough flame to say it’s time to get them involved.

Moreover, why, if DHS/CMS were in such a rush to grab this spot and sign a lousy deal, why is it standing empty over two months after the lease started? DHS has now wasted three months’ rent at over 20 grand a month by this inactivity.

Heckuva job, Frankie.

Comment by Arthur Andersen Friday, Apr 7, 17 @ 4:07 pm
Is the state actually making payments on theis property? Is this kind of bill given priority over other vendors or social service programs?

Comment by Seymourkid Friday, Apr 7, 17 @ 4:19 pm
I personally know both the Cellini Family and Mr. Vala they are all honorable individuals who have given much back to the Springfield community.

Comment by Springfield Watcher Friday, Apr 7, 17 @ 4:21 pm
This is why we need freeze property tax

Comment by Rabid Friday, Apr 7, 17 @ 4:57 pm