Questionable Warehouse Deal Costing Illinois Taxpayers Millions


The agency designed to catch and prevent wasteful spending in state government failed to even hold a vote that could have saved Illinois taxpayers millions of dollars.

A mostly empty warehouse at 2410 South Grand Avenue East in Springfield now holds neat rows of filing cabinets and pallets of paper records which belong to the Department of Human Services. The lease agreement binds Illinois to fulfill at least the first five years of the deal, which adds up to a minimum of $2.4 million.

Procurement Board Member Ed Bedore, an appointee of House Speaker Michael Madigan, tells WCIA the total cost could clear $11 million before the 10-year deal is over. Bedore estimated Illinois could have purchased the property for $700,000. It’s value is listed at $1.1 million.

The Procurement Policy Board is led by Chairman Frank Vala, a Republican appointee of Governor Bruce Rauner. Vala’s five-member panel had the chance to block the Rauner administration from overspending on an inflexible lease arrangement, but it never held a discussion about the terms of this lease. Rick Morales and former state representative Bill Black are the other two Republican appointees on the board. Larry Ivory was appointed by Senate President John Cullerton, a Democrat.

The board only meets once a month. And if a proposal goes 30 days without an objection from the panel, it is automatically considered approved. The process creates a very small margin for error. In most cases, the Procurement Policy Board will send a letter of no objection to give government agencies a green light for their contract or lease. In this case, it did not send a letter to the Department of Human Services.

DHS has not yet returned our request for job descriptions of the five employees assigned to work in the warehouse. Bedore claims their jobs will be mundane record keeping, retrieving and filing.

The Illinois Department of Central Management Services provided this statement in an email: “The lease was secured through the open, competitive bidding process and was fully reviewed by the Illinois Procurement Board.” WCIA is only aware of one other bid for this particular lease. Those familiar with the Procurement Policy Board’s discussions say the warehouse lease was never even discussed.

The DHS statement also claims the facility owners, Climate Controlled Holdings, LLC, made “additional enhancements” to the warehouse, upgrades the state could not afford to make without a full budget or a specific appropriation.

According to records kept by the Secretary of State’s office, Climate Controlled Holdings is registered to Mr. Thomas Storniolo at 20 North Clark Street in Chicago. The business appears to be a young entity. It was registered with the state in February of last year.

Storniolo’s LinkedIn page also shows him as the Controller of New Frontier Management. That company, registered to the same 20 North Clark Street address, has donated $15,000 to Republican political action committees over several years. It’s first political donation on record was for $3,000 to Friends of Michael Madigan back in 1994. Every one of New Frontier’s political donations since then has been given to Republican associated groups, many of which have ties to Citizens for Rauner, the Illinois Republican Party and Friends of Rodney Davis.

Now, it’s controller, Mr. Storniolo stands to turn an incredibly quick profit on an old building his company bought for a fraction of it’s listing price, and then leased to the state at a significant markup. If the state cancels the lease at the first chance possible in February 2022, Climate Controlled Holdings will clear $1.65 million, a 220 percent return on investment.

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