PEORIA — Work on an agreement to refinance the Pere Marquette hotel — and keep its Marriott affiliation — became more difficult last week when officials at Caterpillar Inc. announced the company's headquarters would move to Chicagoland, developer Gary Matthews said Tuesday.
"The news, of course, was not helpful from Caterpillar," Matthews said.
Peoria taxpayers have a stake in the project, both through a multimillion-dollar loan to Matthews and through millions more in bonds issued for the project that are paid for from tax revenue coming from the hotel.
Meanwhile, another hotel that Matthews was involved in developing filed for bankruptcy reorganization in federal court Tuesday morning.
Uncertainty at the Pere
The ultimate success of the Pere's refinancing push that Matthews had hoped to close by month's end still remains in question. Though he indicated that the overseas bank he had been working with had "not completely" withdrawn, the developer said he also has been trying to parley with the banks that currently hold the loans on the project in an effort to "refinance with them at lower interest rates."
Matthews had been grappling with negotiations on a refinancing deal for months prior to Caterpillar's announcement. Those efforts had resulted initially in a Jan. 23 deadline to reach a deal or face the loss of the Marriott flag on the property, and later saw an extension through the end of February.
He said Tuesday that among his work now was "trying to negotiate a longer deadline," indicating that a closing on the refinancing might not be imminent.
"I'm going to do everything I can to pull it through," he said.
As he did last week, Matthews again challenged the notion that the departure of top Caterpillar executives would create problems at the Pere.
"We have not had any cancellations with Caterpillar on group events. As far as we're concerned, the impact is going to be minimal," he said, noting the brisk traffic the facility did with vendors and other business visitors to the industrial giant.
Caterpillar officials confirmed Tuesday evening that in 2016 they hosted nearly 9,000 customers and dealers to the Peoria region on top of other business travelers and employees that came to the region for meetings and work.
"Peoria will remain one of our most important sites, not only because it is home to our largest concentration of employees, but also because it will continue to be an important site for visits from our customers and dealers around the globe. It remains in Caterpillar's best interest to have a respected hotel brand located near so many of our flagship facilities," the company said in a statement.
Peoria City Manager Patrick Urich called the continued uncertainty at the Pere "unfortunate," and said he hoped for a successful resolution.
"We're hopeful still that Mr. Matthews is able to restructure his debts to keep the hotel a growing concern."
In East Peoria
Also on Tuesday a separate company Matthews is involved with, EM Lodgings LLC, filed for Chapter 11 bankruptcy reorganization in federal court.
That company — separate from Matthews' EM Properties that is involved with the Pere — oversaw the Fairfield Inn and Suites at 200 Eastlight Court in East Peoria. That brand is also Marriott affiliated.
The bankruptcy — under which the hotel will continue to operate while legal work with creditors continues — comes after a separate filing in state court for foreclosure on the property by National Cooperative Bank.
Matthews said that he is not behind on payments for that hotel, where he described his role as that of a minority investor. However, he said that several problems together have dogged the facility.
Restructuring at Caterpillar and its consequent staff reductions over the last several years played a part, he said, since the site catered to company vendors.
"Those are our kind of guests," he said, acknowledging that "last year was not a great year, not for hotels."
He said that increased competition from several other new, similarly sized hotels in East Peoria also put a pinch on the facility, as did costs from renovations mandated by Marriott for the property.
This is not the first time that Matthews has faced financial problems in court. In 2014, he and business partner Monte Brannan and their associated companies, including EM Properties, faced foreclosure proceedings on some of his Tazewell County properties for defaulting on several mortgage payments. That included his signature GEM Terrace office building now occupied by Cullinan Properties.
Chris Kaergard covers politics and government. He can be reached at firstname.lastname@example.org and 686-3255. Follow him at twitter.com/ChrisKaergard.