One of the two developers on trial for misuse of funds tied to the troubled Pere Marquette Hotel redevelopment project has changed his plea on some of the charges against him.
Monte Brannan on Friday entered guilty pleas in Peoria federal court on three felony counts of concealment of bankruptcy assets.
Brannan, 70, admitted that his Chapter 11 filing in 2018 did not disclose ownership of a convertible, $80,000 in cash that he had transferred to his ex-wife, and payments received on a $100,000 loan to a boutique.
The charges were part of the ongoing federal case charging Brannan and co-defendant Gary Matthews with fraud, money laundering, and conspiracy in connection with the financing agreements with the City of Peoria to redevelop the Pere Marquette and build the Courtyard by Marriott on adjacent downtown properties.
Each concealment of bankruptcy charge carries a potential sentence of up to five years in prison and a $250,000 fine, along with a year of supervised release and a $100 assessment charge.
Brannan’s attorney, Peter Lynch, told Judge Sara Darrow he anticipates an advisory pre-sentencing report would recommend no more than 26 months of incarceration. Darrow explained to Brannan that she has discretion to impose a sentence longer or shorter than the pre-sentencing recommendation.
Brannan and Matthews both still face 18 counts of fraud, money laundering and conspiracy in connection with the project's financing troubles. Prosecutors allege the two directed $13 million from a hotel management company to a bank account they controlled.
Peoria City Manager Patrick Urich spent four hours on the witness stand Friday, detailing the redevelopment project's timeline and efforts to secure financing.
Urich said the original 2008 proposal for the project, predating his employment with the city, called for a $36 million grant from Peoria to the developers. He said that over the next three years, the $96 million project encountered difficulty securing financing.
In an effort to see the project come to fruition, an amended development agreement altered the structure to a $29 million grant coupled with a $7 million loan from the city, with the total project cost increasing to $102 million. Urich said the change was intended to protect the city’s interest as the project encountered numerous delays.
Urich testified that as one of the conditions for the city to agree to that change was for Matthews and Brannan to not take any payment until the city's loan was repaid in full.
After the developers’ attempts to refinance their funding failed, the properties were eventually placed into receivership. Urich testified that the city lost its entire $7 million loan.
He said the city never forced the developers into any agreements they did not willingly enter, and that the city always hoped the project would succeed.
“It’s still very important to us, and we want to make sure it stays,” he said.
The trial is scheduled to resume Monday and is expected to continue through the rest of next week.
