The city of Peoria will not be repaid for $7-million dollars it loaned to Gary Matthews as he renovated the Pere Marquette Hotel.
No one offered a bid on the purchase of the hotel yesterday. Indure Build-to-Core therefore becomes the owner as the senior lender after loaning Matthews $39-million.
City manager Patrick Urich says the city was in a second position with its loan.
"The inherent risk of being in a second position is if something like this happens, you end on the wrong side of the ledger, and that’s the case where we are today. So we aren’t going to be able to recover that seven-million dollars," says Urich.
Indure Build-to-Core is the real estate division of the International Brotherhood of Electrical Workers. In an earlier conversation, Indure officials told Urich they would operate the hotel until it is stable and then try to sell it.
The city also issued $29-million in bonds for the project, which will be repaid through taxes generated by the hotel.