Developer Gary Matthews filed for bankruptcy over the weekend.
That put a foreclosure sale on hold for the Pere Marquette Hotel.
Peoria City Manager Patrick Urich says filing for Chapter 11 protection clearly will give Matthews’ company a chance to restructure its debt, and possibly retain control of the hotel.
Senior lending group INDURE Build-to-Core Fund, the real estate arm of the Electrical Workers Pension Fund, filed a foreclosure judgement against Matthews’ company in February for failure to make payments. The City of Peoria, which held the second mortgage on the Pere Marquette property before approving unsecuring the debt, is owed over $8 million.
“Obviously the city in our second position and the senior lending group in the first position are going to be very interested in what’s going on. And, we’ll probably party to the proceeding in some point in time,” said Urich.
Urich tells WMBD’s Greg and Dan that if a foreclosure sale had happened Monday as planned, the city would likely have lost second position as INDURE was expected to bid nearly $34 million to take control of the hotel.
Urich says the Pere Marquette Hotel and the Courtyard by Marriott properties will remain open for business throughout bankruptcy proceedings and the foreclosure sale process.