Former Eagle Creek lessee sues state

Former Eagle Creek lessee sues state

DECATUR — The onetime lessee of the Eagle Creek Resort at Lake Shelbyville has filed a three-count lawsuit against the state of Illinois, and is seeking $100,000.

The rules of the Illinois Court of Claims — where the three-count suit was filed by Michael Ballinger of Decatur, president of BMDD Resorts — cap most claims against the state at $100,000.

Four years ago this month, Ballinger was awarded the lease to take over the resort complex near Findlay, about 70 miles southwest of Champaign-Urbana.

The latest suit continues a mostly legal odyssey that began five years ago this month, when a judge shut down the mold-infested conference center and 138-room lodge.

A year later, on July 7, 2010, the state Department of Natural Resources formally awarded to BMDD a 21-year lease to operate the lodge, conference center and golf course. The 18-hole golf course reopened almost immediately but none of the other facilities has opened for business.

And four months ago, BMDD sent a letter of termination to the DNR after the agency and state and local officials had indicated their displeasure with the lack of progress on reopening the resort. In the meantime, the golf course remains open, although it has another operator, and the remainder of the 27-year-old complex is still shuttered.

In his lawsuit, filed last month by Decatur attorney Mark Morthland, Ballinger made three claims against the DNR.

— First was that the state committed fraud by refusing to disclose to potential leaseholders that in addition to the mold problem, Eagle Creek also had a defective sewage system.

"The plaintiff was informed, after execution of the Lease, that the Defendants contracted to have the raw sewage removed from the Resort on a nightly basis. The sewer system that was in place was unable to pump the raw sewage," the suit says. "On or about one year after the execution of the Lease a representative of the (DNR) informed the plaintiff that the entire sewer system needed to be replaced at a cost of nearly $1 million, however they did not intend to correct or replace the sewer system."

BMDD said it had invested $3.1 million over the last four years for improvements to the golf course, plus mold remediation and architectural and engineering costs.

— The second count charges that state failed to defend BMDD when it was included in a lawsuit by the Marine Bank of Springfield related to the earlier owners of the resort.

— The third count alleges that the DNR used "false, fraudulent and misleading statements" when in April it drained a $100,000 line of credit that BMDD had established in 2012 at Busey Bank to secure its performance at Eagle Creek.

In its letter to Busey, the DNR claimed BMDD had breached its contract "in multiple ways," and that it owed the state more than $2 million.

The agency said that BMDD owed at least $1.12 million in rental payments, and at least $238,000 for repairs to the Eagle's Landing portion of the resort complex, "a building that was in a good state of repair when turned over to BMDD, but that was subject to complete neglect by BMDD and never opened."

The state also claims that BMDD owes an estimated $587,240 in "emergency groundskeeping and staff contracts" to keep the golf course open this summer; about $15,000 for sewage lift station repairs; $47,000 to reclaim a gravel haul road installed by BMDD; and at least $12,000 to repair "an inadequate roof patch" at the Eagle Creek Lodge that the DNR says is "further exacerbating pre-existing mold and water damage."

BMDD is seeking the return of the $100,000 line of credit.

"This has been a lifetime horrible experience," Ballinger said Monday. "It's really disappointing. We put a lot of time, effort and money into that place."

Morthland said he hoped for a decision from the court of claims in six to nine months.