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CHICAGO-One day before a mortgage deal was set to close, Illinois Attorney General Lisa Madigan issued an opinion killing a plan to finance the James R. Thompson Center for $216.8 million. Although Madigan agrees the state department of central management services has the authority to mortgage the Downtown glass-and-steel office building as well as the Elgin Mental Health Center, she notes the state constitution requires 60% support from the state legislature on the deals.

The department of central management services arranged a 20-year loan with Societe General’s New York City branch on the one-million-sf curved, atrium building at 100 W. Randolph St., which Gov. Rod Blagojevich originally planned to sell for as much as $230 million. Central management services argued the mortgage did not create additional state debt, as an insurance policy covered payment in case of default.

However, Madigan disagreed. The state constitution requires state debt to be approved by a 60% vote in both houses, and the measure fell three votes shy of the required three-fifths supermajority in the senate.

“We have carefully reviewed the structure of the transaction and the provisions intended to avoid the creation of state debt,” Madigan says in her opinion. “Notwithstanding these provisions, this transaction will nonetheless create an indebtedness which will be ‘required to be repaid, directly or indirectly, from tax revenue,’ whether through satisfaction of the current obligations through appropriations or other means, or through foreclosure on the collateral.”

Although Madigan’s opinion was in response to an inquiry from Senate Republican whip Peter J. Roskam, she is the daughter of House Speaker Michael Madigan. Despite being fellow Chicago Democrats, a feud between the elder Madigan and Blagojevich precedes the governor’s primary battle.

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