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* When Gov. Jim Thompson decided the state should lease buildings instead of building or buying them, Bill Cellini made a bundle…
June 1979: State legislators approve a plan to lease the vacant Concordia Seminary from New Frontiers, a Cellini-owned company, for $985,000 a year and use it as a state prison training facility. The proposal came with an option to buy, and legislators talked about purchasing within five years, but the state is still leasing the building. The project was controversial from the start. “I don’t think anybody would be jumping all over this if Bill Cellini were not involved,” then Department of Corrections director Gayle Franzen said. “It just so happens that he knows more politicians than the governor or I put together.” Cellini closes several more leasing deals with the state in ensuing years, and by 1984, New Frontiers is leasing more square footage to the state than any other landlord in Springfield, collecting $175,300 a month in rent.
* When Thompson moved from concrete to asphalt roads, Cellini and his friends made out nicely. When the Republican-controlled General Assembly allowed for the commercial and residential development around UIC, Bill Cellini expanded his reach to Chicago and built University Village. We all know about the hotel, financed with a $15.5 million state loan before it was finally foreclosed upon after its loan balance topped $30 million. And then there was the TRS investment business, which ended up leading to his downfall.
* But Cellini made his really big cash on a casino…
Cellini paid $50,000 for a state gambling license to open a casino in Alton in 1990. Three years later, Cellini and his partners took Argosy public, with Cellini selling $4.9 million in stock and keeping shares worth an estimated $50 million. When Argosy was sold in 2004, Cellini received an estimated $63 million for his remaining shares, according to State Journal-Register archives.
It’s impossible to run a government without making some people a bunch of cash. And while not condoning his behavior, there’s no doubt that Cellini was a genius. Wherever there was money to be made off the government, he was there, like an Illinois Zelig. Actually, he probably came up with most of those ideas, which is all the more amazing.
If he’s lucky, a person will have one good moneymaking idea in a lifetime. Cellini had too many to count. I just don’t think there will ever be another one like him. Not only is he a unique person, but laws and times have changed too much to do what he did now.
posted by Rich Miller
Thursday, Nov 3, 11 @ 7:52 am
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He’s a throwback to the turn of the 20th century, where being involved in government was ABOUT making money. Believe Plunkett called this “honest graft”. Cellini was a genius financially. Should have left the extortion (okay, conspiracy to commit) to others, though.
Comment by beserkr29 Thursday, Nov 3, 11 @ 8:05 am
It’s not just the fact that Cellini leased the most property to the State, but that property was leased at inflated rates. At one point when someone complained to CMS that the rate they agreed to pay on a Cellini owned building was significantly above the market price in downtown Springfield, CMS justified the agreement by showing the rate was in line with the amount being paid for leases at two other buildings in downtown Springfield. Of course, both of those buildings were also owned by Cellini.
Comment by Anon 1 Thursday, Nov 3, 11 @ 8:09 am
I guess you can call it genius when you have enough power to force IDOT to change their pavement design formulas so that every analysis concludes that asphalt is more desirable than concrete, even though most engineers would prefer concrete for high-volume pavement locations. Genius isn’t the word I’d use for that scenario.
Comment by Stooges Thursday, Nov 3, 11 @ 8:12 am
Of course the guy nows more politicians than anyone else. He’s been around since Lincoln. I saw a painting of him whispering in Lincoln’s ear
Comment by PublicServant Thursday, Nov 3, 11 @ 9:16 am
err, knows
Comment by PublicServant Thursday, Nov 3, 11 @ 9:16 am
IMO, the real problem is that what might be called “The Bill Cellini Approach” to doing business now exists all throughout government. Cellini may have been a pioneer and done well at it, but he has a ton of followers these days.
Instead of having the best product, it’s a very corrupted version of relationship marketing, where the most critical point is “who you know” (actually, first, second, and third), and everything else is way down the list.
I just saw a high value contract get let for an internet backbone for a local government. Competence didn’t even play into the final decision.
Not that the approach is unworkable, but it creates vast amounts of inefficiencies all throughout government, and it’s literally become almost accepted practice. You are never going to get rid of most of the corrupt relationship marketing, but the problem is that with the looming financial cutbacks (and it’s just starting to impact) at the local levels, such practices become literally unaffordable.
And with local property tax rates at easily over $8.00 per hundred in value, and going up, a lot of the “good olde boy/girl network” relationships are just not going to continue to be workable or affordable.
Comment by Judgment Day Thursday, Nov 3, 11 @ 9:19 am
We oughtta have a law against “insider trading” on government information not yet available to the public.
It is the biggest source of unfair practices leading to inefficient government. It is the ultimate and biggest corruption of good government. It is as rife among those close to local governments as it is at the state level, and as common downstate as around Chicago. It has led to a privileged few of wealthy insiders connected to both parties.
It will be tricky, but the SEC rules are analogous, and a start.
Comment by walkinfool Thursday, Nov 3, 11 @ 9:32 am
When Cellini sold AGY to PENN, part of the deal was to expand the BOD of PENN to include a seat at the table for Cellini so that he could cash out of AGY and still not cut off the benefits of ownership per se through PENN.
The Gaming Board was required to approve the sale and license transfers within Illinois. PENN was advised that this particular arrangement would not be advisable.
The Gaming Board had insight into what was coming down the pipeline far before the US Attorney lowered the boom. At that point they decided that as far as gaming was concerned; the party was over.
Comment by Quinn T. Sential Thursday, Nov 3, 11 @ 9:32 am
{“I don’t think anybody would be jumping all over this if Bill Cellini were not involved,” then Department of Corrections director Gayle Franzen said. “It just so happens that he knows more politicians than the governor or I put together.”}
LOL, and this genius was selected as an original owner of the Empress, from which ABSOLUTELY GINORMOUS RETURNS were paid out for years, before they decided to monetize the asset and sell out to……….
BILL CELLINI
Comment by Quinn T. Sential Thursday, Nov 3, 11 @ 9:36 am
While all of us Repubs would like to think the Big Jim Thompson was a great gov, let’s face it. his decisions then, and now, where sometime not in the best interest of the taxpayers of Illinois.
Comment by tr Thursday, Nov 3, 11 @ 9:38 am
Cellini sure could get along with people in Springfield. That’s a virtue, as I understand it.
Comment by wordslinger Thursday, Nov 3, 11 @ 9:50 am
I was told back in 1970 by a prominent State Senator to “stay away from this young guy Cellini”, that he was trouble and was only interested in making money. It took forty years for the chickens to come home to roost. So the few honest politicos back then were already on to him!
Comment by Ace Matson Thursday, Nov 3, 11 @ 10:03 am
How can you talk about the “virtues” of a man that has clearly been manipulating politicians to steal money from the taxpayers. While Cellini may have had some good ideas, he has always overcharged the State and gotten away with it. How many millions does he have stocked away somewhere? He’s still collecting even while he’s being convicted.
Comment by tr Thursday, Nov 3, 11 @ 10:12 am
there are things that are discussed on this blog that sound outragous and are used for political stunts but which in reality are necessary for government, buying paper clips, congressmen going to war torn countries and yes if a state government spends tens of billions of $ a year not ever dime is going to go to your daughter’s kindergarten teacher and someone is going to make $. No one complains when Boeing gets a deal from a foreign country to make airplanes, but the problem here was a)this guy broke the law b)there’s a public perception, irritated by the tough times and bad government we’ve had that guys like cellini are what Illinois government is ALL about.
Comment by Shore Thursday, Nov 3, 11 @ 10:24 am
Is this the same Jim Thompson who wants George Ryan out of jail? I thought so. Stand up guy, huh?
Comment by Borealis Thursday, Nov 3, 11 @ 10:24 am
BTW, the abuses in leasing of State office space have not slowed down much @ CMS. I was keenly aware of it during the Blago years, and Quinn done nothing to clean it up since his tenure began.
I hope the feds keep diggin’ around CMS. There’s a bounty there, and it would be nice to know who is present at the trough.
Comment by Borealis Thursday, Nov 3, 11 @ 10:29 am
There has been concern and discussion for as long as I can remember that some property leases in Springfield are overpriced. One of the things that I saw at CMS was that at least in some cases this perception resulted from lack of competition.
When the state needed to lease a large office building (let’s say 100,000 sq ft) there were few properties that met that need, and finding one vacant so you could lease the whole property was unheard of.
So, someone who owned or controlled(option) an existing building had an advantage (think Sears, think EPA). They could remodel that building, recapture their remodeling in the then 5 years allowed on the typical state lease (and/or a heavy recapture penalty if the lease wasn’t renewed) and still price it lower than the competition who had to bid a build to suit. Remember, there weren’t 100,000 sq ft spec office buildings sitting around.
So, you are paying a hefty, and arguably above market price, and it was still the lowest bid you received or could have gotten. The best you could do was attempt to negotiate down. Same thing when a lease expired. Ok, if you don’t come down, we’re going to move. Where? Get someone to build a new building and pay $4 a sq ft more than I’m asking?
Comment by steve schnorf Thursday, Nov 3, 11 @ 10:31 am
I wish I could remember the details or have the time to do more research but I remember the Concordia and Riverboat examples as having even more sleaze associated with them.
If I remember correctly Concordia closed in part because it was a dangerous location and a women had just been raped on campus. Cellini bought the property and turned around and leased it within a week or two for significantly more than he paid for it. And I don’t think there were major capital improvements involved.
My memory of the Riverboats is they were created in response to Iowa’s riverboats which were required to go out in the river for a couple of hours. This limited people’s ability to come and go and was meant to create a tourist attraction. The Illinois boats were originally also suppose to go out in the river for a cruise. My memory is after it passed the legislature, Gov. Thompson used his line item veto power to allow the boats to remained docked.
One other project to throw in the mix is his Chicago Maxwell Street development required the cooperation of U of I.
Comment by Objective Dem Thursday, Nov 3, 11 @ 10:40 am
I may have missed a prior post on this but I think a tip of the hat is due to former IL US Senator Peter Fitzgerald. He started this ball rolling with the appointment of us atty Patrick Fitzgerald. As for Cellini, I think he may have been one of the originals in Fitzgerald’s sights way back when.
Comment by Bitterman Thursday, Nov 3, 11 @ 10:46 am
It’s kind of amazing how Jim Thompson went from a prosecutor to a facilitator of political favors for people who could help him politically. If only there were more transparency back then.
Comment by New Era Thursday, Nov 3, 11 @ 10:47 am
– but laws and times have changed too much to do what he did now. –
Extortion has been frowned upon since the crust cooled.
Anytime that our small government, alleged “conservative” friends want to chime in with an explanation as to why this guy was entitled to treat state government like a piggie bank for forty years, I’d be much obliged.
Switching from concrete to asphalt. Ka-ching. Alton Belle. Ka-ching. The deadbeat hotels. Ka-ching. Pension boards. Ka-ching. Bad lease deals. Ka-ching.
Why was he so special? What did he bring to the party? Big Jim? Little Jim? Anytime, please.
Comment by wordslinger Thursday, Nov 3, 11 @ 10:50 am
As time goes on, “Big Jim” gets smaller by the day.
Comment by GMatts Thursday, Nov 3, 11 @ 10:54 am
Since Bill was “Mr Republican,” his conviction should remind our Republican friends that Democrats have no monopoly on corruption in this state.
Comment by reformer Thursday, Nov 3, 11 @ 10:55 am
Steve,
I agree with your assessment on why the rental costs are higher in Springfield. But you must admit that politics has traditionally played a role in the leases.
Additionally, I think the state leasing property from the private sector makes sense in a place like Chicago where there is a lot of competition. Likewise for small facilities, such as local offices, it makes sense. But I don’t think it makes sense for the State of Illinois in Springfield. Part of my antagonism towards Cellini is the fact that Springfield has been transformed in a negative manner by all the office buildings scattered throughout town. I also think it makes it harder for state employees to work together, meet casually, etc. The lack of a core state office complex makes it harder to have buses bring people from nearby small towns or use mass transit. My honest sense is the policy to lease from private sector firms rather than build government buildings was driven more by politics than public policy.
Additionally in contrast, at the time that state office space was being outsourced in Springfield, the State built the Thompson center in Chicago to move away from leases. Its possible it made sense economically in Chicago but not in Springfield, but I doubt it for the reasons you cited about competition.
Comment by Objective Dem Thursday, Nov 3, 11 @ 10:55 am
Yes he made a lot of money for himself and his partners, but he did not create value like an honest, successful business. Every dollar he got was extracted from someone else’s pocket via the government, directly or indirectly; he created nothing.
Comment by Marty Thursday, Nov 3, 11 @ 11:05 am
i keep telling people that the state has all this land in peotone, well within the chicago media market — and closer to a LOT more of its elected representatives (imagine the money illinois could save!) — that is perfect for a new state capitol! that would certainly solve the high office costs in springfield…
Comment by bored now Thursday, Nov 3, 11 @ 11:06 am
Bill Cellini was a gentleman and a genius.
Comment by Anonymous Thursday, Nov 3, 11 @ 11:10 am
Cellini has been a crook for years and his conviction is warranted and justified.
Comment by Louie Thursday, Nov 3, 11 @ 11:37 am
The smartest guy in the room stands convicted of two felonies..
He is my friend, i benefitted from knowing him. Having said that, i feel the verdict just those who feel satisfaction in the verdict share the anger that the Occupy movement is testament to. A feeling that those on the inside are making huge profits while following the rules.
The movement can’t clarify their complaints nor have they expressed clear goals. But patrick fitzgerald is part of the solution they seek. It took many years and hard work but the system reacted and said ” enough
Taht’s what the bankers and hedge fund guys should have said. It is what cellini should have said. Everyone wants to believe that everyone can get rich in this country. But filthy rich? That bring the protestor to the parks
Cellinin should have said enough after the 50 million dollar casino sale, or when he hit seventy or when blago got elected. But he chose to stay and play with those whose geed knew no bounds, who had no sense of proportion or subtlty.
Will things change? For awile at least. Boss custer in galesburg had his hotel and lived well and profited by making the city buy his bricks. Someone else will be along. But for now, at least, the jury said what the Occupiers are saying, enough!
Comment by Publius Thursday, Nov 3, 11 @ 11:45 am
Bitterman -
When Peter appointed Patrick (no relation), I thought there were 2 targets: Cellini and Daley. Not sure why Daley chose not to run for re-election - the personal family issues alone are sufficient - but both have, for now, been removed from the Illinois political scene.
I would imagine somewhere Peter is smiling … .
Comment by Really? Thursday, Nov 3, 11 @ 11:55 am
–When Peter appointed Patrick (no relation),–
Just to be clear…
Patrick Fitzgerald was nominated for his post by Pres. Bush and confirmed by the Senate.
Sen. Peter Fitzgerald recommended Fitz to Bush, who made the nomination despite the thunderous objection of Illinois GOP establishment, who were used to the Big Jim Kiddie Corps going after dumb aldermen like so many fish in a barrel.
Comment by wordslinger Thursday, Nov 3, 11 @ 12:03 pm
===My memory is after it passed the legislature, Gov. Thompson used his line item veto power to allow the boats to remained docked.===
The Illinois boats actually had to go out on cruises the first couple of years. They didnt get to stay dockside until, I believe, 1999. That legislation also started the saga of moving the 10th license, which is now finally in Des Plaines.
Comment by Been There Thursday, Nov 3, 11 @ 12:12 pm
Here is one of the many ways I am different from Bill Cellini.
If I made a 50 million dollar payday on the casino, I could stop everything, cash out, and walk away from it ALL, content to kick back and retire with that money, leaving the rest of it on the table for someone else. Go count the sand grains on the richest beaches of the world or something. Build churches or something. Anything, really.
Apparently, the money was just his way of keeping score, and he was addicted to the power and influence. Much good may it do him now.
Orson Welles once said: Whether the story has a happy ending or not, rather depends on where in the tale you decide to stop telling it”.
Comment by Newsclown Thursday, Nov 3, 11 @ 12:33 pm
Steve and Ob Dem — I believe CMS has renegotiated a bunch of those leases, with some serious savings. Rich, can you weigh in?
Comment by soccermom Thursday, Nov 3, 11 @ 12:52 pm
The leases were more profitable than you might imagine. Someone I knew (not BC) had a lease where they made all their money back, including remodeling costs, in 3 years … and it was dollars cheaper than the typical State lease in Springfield.
Comment by Retired Non-Union Guy Thursday, Nov 3, 11 @ 12:53 pm
Yep real genius. Especially the getting convicted on felony charges part.
Blago is a piker compared to this slime. Good riddance to him and his absurd rug.
Comment by just sayin' Thursday, Nov 3, 11 @ 1:01 pm
===One other project to throw in the mix is his Chicago Maxwell Street development required the cooperation of U of I. ===
Correct. And then they put Mike Tristano at UIC.
Comment by Rich Miller Thursday, Nov 3, 11 @ 1:07 pm
“So, someone who owned or controlled(option) an existing building had an advantage (think Sears, think EPA).” The owners of the Sears building tried to lease it to the State for several years, but the State wasn’t interested. Then the owners wised up and cut Cellini in on the deal. They got a lease the next year.
Comment by Anon 1 Thursday, Nov 3, 11 @ 1:15 pm
@ Publius
Did I miss the memo about Happy Hour starting before noon today?
That was an unusually incoherent rant for you here today.
Comment by Quinn T. Sential Thursday, Nov 3, 11 @ 1:28 pm
Cellini being called a “Republican” cracks me up. Cellini was NEVER affiliated with any particular political party - his party was whoever happened to be in power at any given time. He was all about making money - party politics were only a concern if they affected his ability to make money.
Comment by Hunterdon Thursday, Nov 3, 11 @ 1:49 pm
===Cellini was NEVER affiliated with any particular political party===
That would be big news to the Sangamon County GOP. He served as treasurer for many years.
Comment by Rich Miller Thursday, Nov 3, 11 @ 1:50 pm
Word, right you are…nominated by Fitzgerald.
I think he had the whole corrupt “cabal” in his sights actually. I recall that he made majorenemies of Hastert, LaHood, Ryan and others in the Republican establishment. And let’s see, he did not run again due to, some might say, overwhelming opposition from the Illinois Republicans (his party?). And then, oh right, Barack Obama won that seat and the rest is still history in the making….
Comment by Bitterman Thursday, Nov 3, 11 @ 2:10 pm
Rich- Cellini seemed to switch parties whenever working in Chicago- how do you explain all of his deals with Richie Stein and Daley pal Marchesi- On top of that when ISBE was looking for a real estate advisor in 2005- what a shock that they hired Cellini’s firm
Comment by sweetness Thursday, Nov 3, 11 @ 2:43 pm
===Cellini seemed to switch parties===
Despite his work with Democrats, there was never any doubt that he was a Republican. There’s no getting away from that. The simple truth is that Illinois Republicans have to work with Democrats if they want to get something done, even when the GOP had complete control.
Comment by Rich Miller Thursday, Nov 3, 11 @ 2:55 pm
Cellini did not start out wanting to lease Concordia to the State. After obtaining exclusive rights to market it from the Missouri Synod, he tried to get the State to buy it.
I was one who opposed it strenuously. I still remember Bill calling me out of the House chamber, asking, “Cal, are we having a fight?”
More memories of Bill written before the verdict, including the 1971 Springfield mayoral campaign at http://mchenrycountyblog.com/2011/11/01/bill-cellini-verdict-at-noon/
You can hear his laugh at a Crystal Lake City Council meeting right before the council gave his group a $20 million-plus Tax Increment Financing deal three days before he showed up in the Rezko indictment can be found here:
http://mchenrycountyblog.com/2011/10/15/bill-cellinis-laugh/
Comment by Cal Skinner Thursday, Nov 3, 11 @ 2:59 pm
Word -
===Just to be clear…
Patrick Fitzgerald was nominated for his post by Pres. Bush and confirmed by the Senate.===
Technically, you are correct. However, by the arcane rules of the Senate, once a senator announces his / her choice for US Attorney, barring a snowstorm on the 4th of July sort of occurrence, that person becomes the US Attorney.
It was for that very reason Karl Rove tried to limit Peter Fitzgerald to someone inside Illinois
http://articles.chicagotribune.com/2007-03-14/news/0703140213_1_rove-patrick-fitzgerald-white-house
Rove knew once Peter announced his choice, that person would become US Attorney.
And the rest is history.
Comment by Really? Thursday, Nov 3, 11 @ 4:15 pm
There was $50M put into appropriation specifically to buy office building space in Springfield. Unfortunately it was cut out of the budget by John Filan and the legislature in 2003 or 2004. Too bad, some of these leased buildings could have been paid for several times over by now.
Comment by Scottish Thursday, Nov 3, 11 @ 4:51 pm
I can’t compete with all of the anonymous posters who have secret decoder rings and know all these sinister things. I sign my name, so I have to believe what I say since I can and will be called on it. I take it you guys reported all this nasty stuff you knew to the proper authorities at the time. Sign your names and we can all make at least educated guesses to whether you really know anything or not.
Comment by steve schnorf Thursday, Nov 3, 11 @ 5:07 pm
Have we discussed the portrait of Lincoln and Cellini in the Illinois State Museum? Is it really Cellini? People certainly seem to think so. Anyone know more?
Comment by Ann Thursday, Nov 3, 11 @ 5:27 pm
The portrait certainly resembles Cellini. I would love to find out more about the portrait’s background. If Cellini was the model it should be taken down. If he was involved that is the absolute height of arrogance.
Comment by Springfield Resident Thursday, Nov 3, 11 @ 7:46 pm
I worked under Mike Tristano, CMS’s director at one time, he was a “gift” of the Cellini system. What a piece of work THAT guy was. Single best advertisement for patronage out of control, and the textbook definition of a martinet. Yes, I celebrated his well-earned jail time, and I’m not sorry.
Comment by See A Mess Thursday, Nov 3, 11 @ 8:11 pm
“Scottish,” you may have done the impossible. You brought John Filan into a discussion of Bill Cellini. Never woulda seen that coming.
BTW, Scottish, that is ISBI (Il St Board of Investment) not ISBE (Il State Board of Ed) that hired the Cellini-linked investment management firm. Perhaps they were hired because they were doing a good job at the same task over at TRS? That piece of trial testimony was not refuted if I recall correctly from all the dueling charts.
As far as Tristano, “martinet” may be on of the kinder words I’ve heard used to describe him. AA has first-hand knowledge as well. Rich, he may have been clouted into the UI system, but it didn’t help him at all once he got there, and his tenure was mercifully brief.
Schnorf is spot-on in his analysis of the Springfield leases. One could make the same allegation about the late Frank Mason and the Lottery Building (one of the first State leases done by RFP - the most expensive proposal won.)
The available properties are few and the State’s requirements are usually complicated.
Cars are more expensive at Isringhausen because they have decided to take the business risk of buying and holding makes and models you can’t get anywhere else in the area. Real estate works the same way, and it’s no crime to ask the market price. I don’t think Rich offers a government rate for the Fax and wouldn’t if I were he.
Comment by Arthur Andersen Thursday, Nov 3, 11 @ 8:37 pm
Obj Dem: Iowa was first to go dockside. We followed in 1999 with the law that also let the failed Galena boat move to suburban cook.
There was the fun bit about whether or not there was a loss limit in the Illinois law. But that was Giorgi, not Thompson, pulling a fast one.
Comment by Michelle Flaherty Thursday, Nov 3, 11 @ 9:09 pm
Ooops, make that “sweetness”, not “Scottis,” in graf 1.
Also, AA will eat his hat if someone can make a convincing case that the $80 million cost overrun, gluttineuous (sp?) Thompson Center was a “success” and or “saved money.”
Comment by Arthur Andersen Thursday, Nov 3, 11 @ 9:22 pm
===I don’t think Rich offers a government rate for the Fax===
I used to have a legislator discount. But then Lee Daniels passed the “fax tax,” so I discontinued it.
Comment by Rich Miller Thursday, Nov 3, 11 @ 10:15 pm
As “Plunkett of Tammany Hall” said: “I seen my opportunities and I took ‘em.”
Comment by QBRNST Friday, Nov 4, 11 @ 9:37 am