MARION — During Monday’s City Council meeting, Marion city officials voted to begin the process of filing a lien against the owners of the Illinois Star Centre mall for not paying its taxes to the city.
“Actually what propagated a lot of this was we ended up having to pay an individual back over $700,000 after they filed for bankruptcy,” Mayor Anthony Rinella said Wednesday.
He said the individual had purchased tax debt on the mall, but later filed a sale in error against the county. He did this because the mall filed for bankruptcy.
MARION — Wanted: A buyer for Illinois Star Centre Mall.
The county then said they had already given the money from his debt purchase to the city — so the court ordered the city pay out.
“We’ve been pushed into a corner way too far way too long over this mall,” Rinella said.
The city is currently embroiled in a complicated lawsuit with the owners of the mall. City attorney Steve Green explained that the owners take issue with the special service assessment tax the city collects from the mall.
He said when the mall property was in development decades ago, the city sold bonds to help pay for infrastructure costs to build the mall. The cost of these bonds were passed on in the form of a tax on the mall property. Green said the money is collected by the county and put in a segregated city bank account used only to pay out the purchasers of the bonds.
Green said the mall owners take issue with the SSA tax at large, believing the agreement to be improper. That aside, he said they also believe that whatever bond debt the mall owed the city has since been paid and they, in fact, have overpaid — Green said the owners contend the city collected this overpayment and used it to pay for other things in the city.
Companies associated with the Rochman family have purchased the delinquent taxes of the Marion mall and the Grand Tower power plant, both of w…
“They believe that the bonds were paid years ago and that the city just continued to collect this money,” he said. He added that he knows with certainty this is not true.
“I know that the money went to pay the bondholders,” Green said.
Green represented the city in the federal suit until a judge granted a plaintiff motion requesting that he step aside because of conflict of interest — he was involved in the initial SSA agreement in question.
Green said the court dismissed the mall’s initial complaint in the case in May and, according to PACER, the mall has until Aug. 9 to file an amended complaint, which Green suspects they will do.
The vote Monday does not put the lien in place, Green said, but starts the process. He said the matter will have to go before the mall’s bankruptcy judge who will rule if the lien can be put in place or not — Green said there are laws in place that say undue burden should not be put on an entity in bankruptcy.
However, Green said the lien is well within the city’s right to request.
Rinella said while the city does not want to be in the mall management business, he said it would not be a bad thing to take ownership long enough to set the terms for the new buyer. He said there have been many flighty buyers in the past with “owner after owner not doing anything with it.”
“We don’t want to have this thing any longer than we have to,” Rinella said.
Councilman Angelo Hightower was the only dissenting vote against the lien Monday. He said he wanted the city to pump the breaks.
“I just think it’s premature to do that,” he said, adding that he believes the city should wait out the current litigation before making such a decision.
Hightower disagreed with Rinella’s idea that it would be worthwhile for the city to own the mall long enough to find a good buyer.
“How is that working out for the Circuit City building? That thing’s been sitting vacant for over a decade,” Hightower said.
He said simply put, he just does not think the city should be in charge in any way of that property.
“I’d rather someone else have to deal with the headache,” he said.
According to his sources, Hightower said there are several parties still interested in purchasing the mall. However, he said the lawsuit is already off-putting to a buyer but adding a lien to it could make this worse.
“I wonder if we kind of shot ourselves in the foot,” he said.
To Hightower, it is unlikely that the mall will ever “be restored to its former glory.” He said it might be wiser to find some way of repurposing the space.
Representatives for the mall did not return a request for comment.