Dueling projects

Councilman John Lee reacts as it became apparent there weren't enough votes to pass the Gatehouse downtown development proposal on Nov. 27, 2017.  After an unusual series of events, the City Council voted 5-0 to go with G8 Development over Gatehouse to build the hotel, despite having cast G8 aside twice and having negotiated with Gatehouse for the past several months.  Lee abstained from the vote.

MASON CITY | The Mason City Council's approval Monday night of G8 Development for the downtown hotel project came after a three-hour meeting filled with emotional pleas, podium pounding, two recesses, and in the end, a surprise turn of events.

At one point, Mayor Eric Bookmeyer, who favored the G8 proposal, said, "It is exhausting to hear so many untruths out there, and it has to stop." 

The council deliberated on whether to choose G8 Development or Gatehouse Mason City LLC as the developer. Interim City Administrator Kevin Jacobson gave a presentation in which he pointed out several areas of savings in the G8 plan and recommended approval of it.

The first vote on whether to approve G8 lost by a 4-2 vote with Joshua Masson and Janet Solberg voting in favor and Travis Hickey, John Lee, Paul Adams and Bill Schickel voting against.

When it became apparent that a vote to approve Gatehouse would also lose, Schickel asked that the first vote be brought back to the table for reconsideration.

Schickel said he favored the Gatehouse plan because of its immense public support but thought it was important for one plan to move forward than for both to lose.

The council agreed and voted 5-0 in favor of G8 with Lee abstaining. Lee said he couldn't bring himself to vote in favor of G8 but wanted the vote to be unanimous.

Neither David Rachie of Gatehouse or Philip Chodur returned phone messages for comment Tuesday morning.

At the start of the meeting, Interim City Administrator Kevin Jacobson outlined both proposals, pointed out how G8's represented more savings for the city, and recommended its approval. He also liked the amount of local involvement in the G8 plan.

Rachie was one of 15 people who spoke at the public forum prior to the vote, most of them in favor of Gatehouse.

"You have supported us unanimously with every vote since spring," Rachie told the council. "The state has told the city that Gatehouse is your developer. You're putting a lot of faith in someone who has never built a hotel."

He was referring to the city's application for up to $10 million in state money through the Iowa Reinvestment Act to leverage a $38 million downtown redevelopment plan. The hotel is a key factor in getting the funding.

Several speakers said when 75 percent of voters approved two public issues on Nov. 7, they thought they were supporting Gatehouse.

"A lot of voters thought this was a done deal," said Joseph DeGraw.

Sandy Servantez agreed. "I'm shocked," she said.

Elizabeth Allison, executive director of The Music Man Square, said the 75 percent vote was a mandate and that changing developers was a "bait and switch."

But O. Jay Tomson, president of First Citizens Bank, said the bank supports the project on the basis of risk evaluation and the amount of local involvement. "We try to be local in Mason City as much as we can," he said.

So far, Henkel Construction, WHKS Engineers, First Citizens Bank and HPI Hospitality all support G8.

Steve Noto, president of HPI Hospitality which operates the Historic Park Inn, said the advantages of going with G8 were obvious. There was far less risk with G8, he said. "I'm done with the antics. This is insane. This is the best deal at the least risk," he said, pounding the podium.

Wayne Allison pointed out that G8 had used Gatehouse's renderings in the proposal it submitted to the city. Steven Van Steenhuyse, director of developmental services, said that was true but was not relevant in comparing bids.

Bookmeyer took the unusual step of injecting his opinion into the council discussion, mentioning the number of "mistruths" being spread.

He said the Gatehouse proposal was not its vision but one that started with the Chamber of Commerce. He said Gatehouse wanted to exclude the Mason City Foundation from the process and had to be talked into it.

Bookmeyer said there is no truth that Gatehouse's corporate office in Dallas is supporting the project. "There's no Texas money in it. Not in this deal. It's a Minnesota LLC," he said.

"There's no security in it. The security they have is the Mason City Chamber Foundation, and they can't cover it," he said. "This project cannot have my support," he said.

Bookmeyer said Tuesday a public hearing is required by state law for Dec. 28 but will have no bearing on Monday's vote.

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