E-mails detail past problems in tollway, Wilton partnership

At the same time the Illinois tollway was enforcing tough rules and stiff penalties for toll violators, it tolerated late payments, maintenance lapses and irreverence from the company that once operated its oases, documents show.

E-mails between the tollway and Wilton Partners, which had a 25-year lease to operate and renovate the oases, show problems almost from Day 1, according to correspondence obtained by the Daily Herald through a Freedom of Information Act request.

In addition to shorting the tollway on rent and other fees, there were upkeep issues, empty storefronts and controversy over favorable rents to politically connected vendors.

Wilton, which defaulted on a 2007 loan payment for oases renovations to lender iStar Financial, now is facing foreclosure proceedings. iStar is expected to take over the old lease.

Although the Wilton mess points to a need for more scrutiny, it appears the agency has limited authority over who runs its oases for the next 17 years. Given that reality, how does the tollway turn its troubled rest stops around?

"This was a public-private partnership gone wild," said state Sen. Susan Garrett, who held hearings in 2009 on the oases.

"The tollway was trying to please too many people, the costs were just too high and they didn't have enough oversight," the Lake Forest Democrat said.

Wilton officials did not return calls or an e-mail.

Tollway officials say they're learning from the past and don't plan to repeat it. They've created an oases oversight committee for a more hands-on approach than before.

"I don't look at the lease as an obstacle, that's your bottom line and you can go from there." tollway Director Thomas Canham said. "We can negotiate things. The opportunities are endless. What we've got to decide is what's best for the tollway and its clients and move forward with iStar, given it appears they'll be the owner."

Director and Aurora Mayor Tom Weisner, chairman of the oversight committee, noted that "the upside was that Wilton invested millions in the sites that did not come at a cost to tollway users. The downside was that they could not sustain the business."

Numerous e-mails show the tollway's limited control over and leniency toward its spiraling partner.

The lease with Wilton and the Illinois State Toll Highway Authority to rebuild the oases and operate them was inked in 2002 under Gov. George Ryan, but a year later, a new political player was looming large.

In 2003 and 2004, former Gov. Rod Blagojevich received $85,000 in campaign donations from Wilton, creating a troubling connection between oases contracts and political contributions, the Illinois attorney general's office has stated.

Blagojevich goes on trial this week on corruption charges that he denies, including allegations of trying to shake down a highway contractor for donations in connection with tollway work.

Further pay-to-play issues arose when donations to the ex-governor were made from oases' Subway and Panda Expressway franchises tied to Blagojevich fundraiser Tony Rezko in 2003 and 2004. The restaurants also received rent discounts at the oases.

While Blagojevich may have benefited from oases contractors, the deal seems to have been a disaster for Wilton. The company borrowed $83 million and has spent about $100 million to rebuild the seven glass-walled oases but it soon ran into trouble making monthly rent and payments to the tollway's renewal and replacement maintenance and improvement account, as plaintive e-mails from tollway attorneys to Wilton executives show.

• June 2007: "Wilton is a year behind in its contributions to the R&R account. It has not paid rent to the tollway since January."

• July 2007: "Wilton should understand that is unacceptable from the tollway's perspective for the current regime of no rent payments and an overhang of unpaid R&R account payments to continue."

• January 2008: "Failure to make its R&R payment is not a positive way to start 2008."

While Wilton was getting away with blowing its deadlines, the agency was getting tough on drivers making late violation payments. A backlog in issuing notices occurred because of miscommunication between two contractors, meaning hundreds of motorists in 2007 started receiving unexpected fines that had doubled and tripled during the time lag.

'Thank you sir'Inside the rebuilt glass exteriors of the oases were vacancies and failure. Wilton never exceeded its $743,000 guaranteed annual rent and frequently fell behind in monthly payments. It only made $353,990 from concession revenues in 2004, $594,000 in 2005 and $743,000 each year in 2006, 2007 and 2008. In contrast, Exxon-Mobil, which operates gas stations at the oases always topped its guaranteed rent of $900,250.The tollway tried numerous times to get a look at Wilton's books, but the company denied access. By mid-2008, Wilton owed the agency about $1.4 million.Wilton blamed the tollway's construction program for diminished foot traffic and damage to its new buildings, claiming it lost more than $4 million.When asked about a pending renewal and replacement payment, Wilton executive Scott Mayer responded in July 2007, "The reasons for the lack of payment are well documented. We have worked tirelessly on this project for over six years without making a dollar. We have proposed innovative and legal methods of generating and saving revenue, but have been thwarted at almost every step."Maintenance problems were a constant theme in 2007 and 2008.Tollway spokeswoman Joelle McGinnis said despite Wilton's problems, the oases were and still are functioning "with convenient fuel and food service to customers." The bathrooms work and the pavilions "continue to be safe, convenient places for customers to stop and take a break."But in February and April 2007, inspectors found major potholes, faded crosswalk markings and unpaved walking areas they called potentially hazardous.Wilton officials took offense at e-mails pointing out deficiencies, griping "are we working as a team or not?"A month later, tollway staff put Wilton on notice about graffiti, litter, malfunctioning toilets, weeds, cracked floor tiles, leaking water, clogged drains, dirty facilities and trip hazards."I feel like I am back in grade school," Wilton's Mayer responded in May 2007. "Thank you sir, may I have another?" he added, apparently referencing a fraternity hazing scene from "Animal House."In June 2007, Wilton owed its cleaning company ABM so much money, ABM terminated the contract.A frustrated June 2007 e-mail from tollway attorney Tom Bamonte states, "it's now after 9 p.m. and Wilton has yet to provide the tollway with any reliable assurances - written or otherwise - that it can adequately provide and pay for janitorial services."Yet the tollway kept the dysfunctional relationship going, preferring to negotiate a settlement in which the agency forgave the debt and let Wilton defer unpaid rent. The Illinois attorney general's office in mid-2008 halted the deal stating it was concerned about political interference at the tollway and the terms of the lease that precluded Wilton from public bidding or disclosing conflict of interest.A few months after the attorney general's criticism, the tollway moved to terminate the lease in fall 2008. In April 2009, iStar filed its foreclosure complaint.That month, former Chairman John Mitola summed up the situation."I understand from a number of people that things don't look good ... now that Wilton has lost the project," he wrote. "I have always been scared to death of dealing with some remote lender who is just going to let the thing go to hell."$CLASS=breakhead$What's next?The foreclosure case could wrap up this summer or fall followed by a foreclosure sale that likely will leave iStar owning the lease. U.S. Equities, appointed by a judge in 2009 to carry on in Wilton's place, is expected to be the new oases manager, an attorney representing iStar said.Tollway leadership has changed with a new executive director, chairman and board members.But while different faces may run the agency terms of the lease found problematic by the attorney general stay the same. The leaseholder still evaluates, selects and negotiates rent with vendors.McGinnis said the tollway does have the right to decline whomever iStar picks as oases manager for reasonable cause. "Tollway management will continue to partner with the leaseholder and property manager to explore new or innovative efforts to minimize pavilion vacancies," she said in an e-mail.Weisner and others think the board can improve on the past by taking an active role in oases operations and discussing issues publicly instead of behind closed doors."Whether there were shenanigans or not, I can't tell you for sure," Weisner said. "But I think we have a right to review these (sub) leases."Director Bill Morris added "we need to be more diligent. If we're not able to use the commercial space, we need to insist on seeing alternate plans."Reviving the oases is another challenge with the advent of I-PASS making the rest stops something of an anachronism. Now that it's easy to exit the system, the oases restaurants aren't the only game in town and business reflects that."It's a different world than when they were established," Weisner said. "Interchanges were few and far between."One possible direction is to offer specialty services to truckers - large trucks comprise 37 percent of tollway users. "We may have to look at a mix of services in those locations," Weisner added.iStar executives were unable to provide details of their plans.Garrett worries that the sluggish market could thwart oases revitalization and wants the tollway and iStar to prepare a five-year forecast."I think the tollway is more cognizant of issues people are concerned about and is trying to make adjustments. But there are still a lot of questions about the viability of the oases in the long term. It could be a house of cards," Garrett noted.Since the case is still in court, the agency is limited in its comments, tollway Chairman Paula Wolff said.But, she said that as a rule, she tries not to attempt to "redo the past. To the extent the past can teach you how to go forward, that is useful. I'm a true believer that the more open and transparent things are, the better."OASIS: Ties exist between Blagojevich and oases franchises