Smiles filled the faces of those involved in Clear Lake’s multimillion-dollar hotel and event center project Monday morning as 11 gold shovels dug into the dirt of its future site.
Nearly 20 individuals, including the general contractor, developer, landowners, Clear Lake staff and council and community members, attended a brief groundbreaking ceremony in Courtway Park east of Interstate 35 to celebrate the project’s start despite the economic instability caused by the COVID-19 pandemic.
“How special and important this day is to our city as well as North Iowa,” Clear Lake Mayor Nelson Crabb said opening the ceremony.
The ceremony was held two weeks after the Clear Lake City Council unanimously approved a development agreement with JSM Investment LLC, of Johnston, including the annual appropriation of tax-increment payments not to exceed $1.5 million.
Councilmen Dana Brant, Mike Callanan, Gary Hugi and Bennett Smith showed their support for the project by attending the ceremony Monday.
“I think it’s a transformational project for Clear Lake. I think it’s a fantastic investment and I think it’s going to catalyze further development out here in upcoming years,” Smith said. “We’re really excited about the project and what it’s going to lead to.”
The project features an 85-room Marriott-brand hotel and an attached conference center and event space that accommodates about 450 people.
The building will be positioned on the southern four acres of Lot 4 in the Courtway Park subdivision with one entrance from Bayou Road.
The new hotel will be the city’s first in at least 20 years, Crabb said.
“We are excited about our partnership with the developer and the opportunity to bring Clear Lake a very modern and 21st-century hotel and meeting center,” he said, noting the hotel will be convenient for I-35 business travelers as well as leisure travelers.
Kalpesh Patel, CEO at VKB Management LLC, of West Des Moines, and Ryan Huegerick, CEO at HCI Hotel Supply, of Omaha, Nebraska, are the development team behind the hotel and event center project.
Both men attended the groundbreaking ceremony.
“This is going to be great,” Huegerick said. “We’re so excited.”
Patel and Huegerick described their companies as a packaged development team. HCI Hotel Supply, of Omaha, Nebraska, builds hotels and VKB Management, of West Des Moines, owns and operates them.
As part of the development agreement, the city plans to offer a forgivable loan to JSM Investment not to exceed $1.2 million funded by incremental property tax revenues, a 10-year incremental property tax rebate agreement not to exceed $1.5 million with payments subject to annual appropriation by the council, and an additional $300,000 in construction incentives from incremental property taxes.
Clear Lake has agreed to pay the developer $150,000 if construction of the project, including at a minimum the excavation of utilities or footings, begins before June 30. Another $150,000 will be paid to the developer if the hotel is operational by June 30, 2021.
Charleson Excavating Company Inc., of Clear Lake, received the contract for excavation work at the site, which was scheduled to begin after the ceremony.
Erick Molestad, Charleson president, said it was his goal to get the “little dirt work” done by the end of the week, weather permitting.
Clear Lake City Administrator Scott Flory said the work started Monday qualifies the developer for the first $150,000 incentive.
The city has also agreed to reimburse JSM Investment up to $50,000 to cover a portion of the franchise application fee to Marriott International, which was reviewed — and approved — in early April.
The Fairfield by Marriott hotel in Clear Lake will be among nearly 20 in Iowa, and it’s the only one along Interstate 35 between Ames and Burnsville, Minnesota, which Flory said speaks volumes about the developer’s — and Marriott’s — confidence in the community.
“I don’t think any industry has been hit harder during this pandemic than the hospitality and lodging industry, so to be able to be here today and celebrate a groundbreaking on a new hotel that will represent a more than $13 million investment in our community is really, really awesome,” Flory said.
The Courtway Park subdivision comprises 11 lots — six highway commercial and five light industrial — and two roadways and curb and gutter on nearly 64 acres east of Interstate 35 and north of Highway 122.
TDFUEL LLC, or Lorri and Todd Hall of Sheffield, own the land and were in attendance at the groundbreaking ceremony and received praise from Crabb and Flory for their investment in Clear Lake.
“We’re looking forward to it getting done,” Todd Hall said.
Crabb and Smith attributed the project’s launch to Flory’s leadership, the Halls’ investment and the developer’s confidence in Clear Lake.
“There have been many highs and many lows, but here we are today no longer a thought but a dream become a reality,” Crabb said to Flory. “I’d like to thank you for your time, your expertise and energy in bringing this to this point.”
The City Council approved a memorandum of understanding with JSM Investment LLC in April, which enabled Clear Lake and the developer to take the necessary steps to formally consider a development agreement.
The memorandum came about a month after the City Council approved a preliminary economic development incentive agreement with the developer in March.
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Ashley Stewart covers Clear Lake and arts and entertainment in North Iowa for the Globe Gazette. You can reach her at email@example.com or by phone at 641-421-0533. Follow Ashley on Twitter at GGastewart.