MASON CITY | The proposed new downtown hotel will be a Hyatt brand, David Rachie of Gatehouse Capital said Wednesday.
Rachie said he has received a letter from the Hyatt corporation expressing interest in Mason City's project. "We will have to design it to their satisfaction," he said.
The proposed 100-room hotel would be built in the south parking lot of Southbridge Mall and would connect with The Music Man Square via skywalk. A conference room/ballroom will be built in The Music Man Square as part of the project.
MASON CITY | Mason City officials are hoping to have a final development agreement approved …
Rachie said Hyatt officials were hesitant at first when he approached them.
"They had been approached by another developer who wanted to build a hotel downtown and had turned him down," he said. "When they learned our project was different and found out more about it, they were interested."
The market feasibility study, paid with $150,000 in refundable city funds, has been completed and was extremely positive, Rachie said.
"You never know what to expect when you ask for a study like that, but when I received the study and looked at it, it was like Christmas morning," he said.
Rachie works out of the Minneapolis office of Gatehouse Capital, which is Dallas-based. The company has built hotels all over the country.
He first became aware of Mason City last year "through a friend of a friend" who thought the city might be a good development site for Gatehouse.
"My first impression wasn't good," he said. "Just from reading newspaper accounts, Mason City seemed like a rough-and-tumble kind of place, hard for a hotelier to fall in love with."
But when he arrived in Mason City, toured the community and met civic leaders, he changed his mind.
"I met city officials but they made it clear they couldn't talk with me about any development because they were under contract with another developer," Rachie said.
That other developer was Philip Chodur of G8 Development, San Diego. His agreement with the city fell through late last year when he failed to meet deadlines for starting construction.
The Globe Gazette left a phone message for Chodur Wednesday seeking comment, but the message wasn't immediately returned.
The city then sought requests from other potential developers, and Gatehouse submitted a proposal that was approved by the City Council.
"The city wanted us to move in and do a project in the same place as the other developer. Well, we didn't think it was the best plan, and most developers have their own ideas and are not interested in doing something another developer wanted to do," Rachie said.
He became intrigued with the idea of building the hotel in the mall parking lot and connecting it with The Music Man Square.
Gatehouse has been working with Dean Snyder Construction of Clear Lake on the plans.
MASON CITY | The city of Marshall, Minnesota, has stopped negotiations with Gatehouse Capita…
"We first learned of Dean Snyder for a project we were doing in Marshall, Minn.," Rachie said. "That project is on hold, by the way. I still think we can work things out."
Marshall city officials stopped negotiations with Gatehouse last month, saying they could not make it work financially.
"We usually use a construction firm out of Dallas for all of our projects but there was some talk about them not being a cold-weather crew. We were put in touch with Dean Snyder and couldn't be happier. They are unbelievably great to work with," Rachie said.
The hotel is included in the River City Renaissance plan in which the city is seeking up to $10 million in state funds through the Iowa Reinvestment Act. That money would leverage a $36 million plan that includes the hotel, an ice arena/multipurpose center and a music pavilion.
The hotel is a critical factor because it fulfills a state requirement of $10 million in private investment in the overall project. The hotel plan is valued at $15 million.
There will be a public vote Nov. 7 on whether to issue up to $18 million in bonds to finance construction of the ice arena. Opponents believe the ice arena can be built for a lot less.
If the bond issue fails, it will kill the River City Renaissance plan.
Rachie said, "I hope people realize that it's all or nothing -- not all or something else."
The city has been pre-approved for $7.2 million in state funding but upped its request to $10 million when more state money became available.
City Administrator Brent Trout has kept state officials aware of all of the changes in the city's plan and is to meet with them in coming weeks to seek their final approval for the funds.