Tracing Illinois Bell's big call
In Springfield, some people believe that William Cellini makes money on every big deal in state government whether his name is on the contract or not.
While that is an exaggeration, there is no doubt that Cellini sometimes makes money on other companies' state deals. In those cases, Cellini plays a more indirect role, and his footprints are often difficult to trace.
Take Illinois' state-of-the-art Communications Center, which opened in 1990 just north of the Capitol in Springfield.
The state leases the center from Illinois Bell for $1.6 million annually, but Cellini was the one who built it and still manages it.
Bell was required by the state to build the facility as part of a hotly contested $ 100 million state telecommunications contract.
Instead of building the center on its own, Bell paid one of Cellini's firms $ 12.1 million to acquire the land and handle the construction, land records show.
Although Cellini's profits from the deal are difficult to determine, his companies were supposed to receive $ 1.1 million in developer and consulting fees from the sale in addition to any profit, records show.
And because Cellini was not the landlord, he was able to keep the deal out of the public eye and avoid the publicity that used to dog him when he was the major landlord to the state in Springfield.
Why did the state's largest phone company turn to Cellini to build the state's communication center?
A spokesman for Illinois Bell denied that politics played any role.
"Politics does not build a building," said Dave Pacholczyk, a spokesman for Illinois Bell, which is now known as Ameritech Illinois. "He is a developer. He knows how to build buildings."
He said that Bell does not build its own buildings and that phone company employees in Springfield, not state officials, recommended Cellini.
"The company knew Cellini as a well-regarded developer in the area with a proven track record of doing that kind of work," Pacholczyk said.
Cellini's track record was mainly with the state. All of his major office developments in Springfield were buildings he leased directly to the state. Cellini sold most of the buildings in 1987 but continued to manage them.
Illinois Bell signed a contract in 1988 with Communication Associates, a limited partnership Cellini set up specifically to develop the center. Cellini's group was to acquire the land and build the 86,000-square-foot structure for Bell.
Illinois Bell and U.S. Sprint had just received a $ 100 million, seven-year contract to provide telecommunication services to the state after a yearlong selection process. The two losing companies, MCI and Ameritech/Arthur Andersen, unsuccessfully protested the choice of Bell/Sprint to state officials.
In the spring of 1989, Cellini's partnership Communication Associates began the construction project. A year and a half later, Communication finished the building and was paid $ 12.1 million by Bell.
Records show that three of Cellini's companies were entitled to $ 1.1 million in various consulting fees after other expenses were paid. Communication Associates was entitled to a $ 493,000 owners consulting fee, while another Cellini firm, New Frontier Construction, was to be paid $ 299,479 as a general contractor's fee. A third firm, New Frontier Development, was to receive $ 310,000 for consulting on development. Communication Associates would get any remaining profit.
Illinois Bell (now Ameritech) has been paid $ 11 million in lease payments since the lease began in August, 1990. Bell pays 2.25 percent to another Cellini company, New Frontier Management, to manage the property.
Bell and the state are close to signing another three-year lease for the building. Bell and Sprint received another telecommunications contract this year.
In 1994, the Illinois auditor general's office questioned why the state in 1988 did not a conduct a cost-benefit analysis of building the communications center itself vs. leasing.