The former American Best Inn & Suites, just south of coming River City Renaissance, has been purchased, according to Mayor Bill Schickel.
The motel will become a 46-bed Econolodge, according to Schickel, and renovations are expected to begin as soon as possible.
"This has to be considered another successful spinoff of the River City Renaissance project," Schickel said in his "Monday Minute" video on Facebook.
Schickel did not reveal the name of the developer in the project.
The news comes just a week after the Mason City Council finalized a deal with Gatehouse Capital to put a multi-million dollar hotel in the vicinity of Southbridge Mall and The Music Man Square.
According to Visit Mason City's Lindsey James, hotel-motel tax revenues have been trending up in Mason City over the prior year and the organization is projecting to end the fiscal year with an increase in revenue from hotel-motel tax.
"This is a result of strong occupancy numbers as well as increases in the average daily rate."
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But, at this time, both James and City Administrator Aaron Burnett were unable to provide tangible, direct data that spoke to whether or not a 46-bed Econolodge and the 96-plus room offering from Gatehouse Capital would be able to exist in such close proximity. Increases in occupancy could make that possible.
American Best Inn & Suites lost its license in 2016 due to alleged health and safety concerns that include fire hazards, mold and uncleanliness.
In 2017, when it went on the market, it was initially offered for $499,000 (a price that based on regular property analysis in the area).
At least one reason offered, in the past, for what it took so long for the property to finally sell is its positioning.
Tricia Sandahl, Mason City's planning and zoning manager, said the motel currently sits in a medium-risk floodplain, and any sort of development would require a floodplain permit.
Perhaps the most complex funding structure goes toward the ice arena, estimated to cost about $12.55 million. This would be paid through private grants, TIF money, Iowa Reinvestment Act funds, a local option sales tax and a $500,000 pledge from Cerro Gordo County.
All of these estimates are “not-to-exceed” figures, and could change based on how much the Iowa Economic Development Authority awards the city. The money is only allocated if the two ballot items pass with at least a 60 percent approval (or “yes” votes).
The city has spent $150,000 on a predevelopment agreement with Gatehouse, the developer of the proposed hotel. That amount will be returned to the city once the project begins. Another $750,000 could be spent on preconstruction funding, and the maximum amount of the loan the city is giving Gatehouse for the hotel at $4.2 million. The Mason City Chamber of Commerce Foundation is guarantor of all city expenses.
The Iowa Economic Development Authority seems poised to award anywhere between $7.1 million to $10 million in tax breaks for the project. That money would be given to the city on an incremental basis – rather than a lump sum, upfront payment – as long as the two ballot items are approved.
The current development agreement requires Gatehouse to invest 10 percent of the hotel cost. About 26 percent comes from the Gatehouse and its investors, 50 percent from the senior bank loan, and the rest from the city’s $4.2 million loan. Eventually, Gatehouse and its investors will pay $13.37 million of the cost of the hotel. It has to re-pay the $4.2 million loan to the city over a 20-year period.
The hotel, which will probably be developed by Gatehouse pending project approval, would be in the southeastern part of the Southbridge Mall parking lot. It would be 106 rooms, and renderings show it would be a Hyatt Place model, although that has not been confirmed by Gatehouse. There have been concerns about how the hotel would impact parking in the area, but city officials claim there is enough throughout Mason City to handle the load.
The current Music Man Square Museum space would be converted into a conference center with a banquet space that would hold 600 people. The streetscape space would be improved, but remain in place. Along with renovation costs, the $3 million projection includes the resources needed to package and move artifacts to the new Meredith Willson Museum.
A new museum would be built to the east of the hotel, and serve as the home to history considering Meredith Willson, along with housing all related artifacts. It would be connected to the new hotel and the skywalk over South Delaware Avenue, linking it to the new conference center. The museum currently inside The Music Man Square will be moved to a separate, adjacent building. The Music Man Square building will remain intact, as the conference center.
This would connect the museum to the conference center. Newly elected city council member Joshua Masson said at a recent council meeting that the skywalk would be an important factor in attracting possible conferences, adding Mason City has been passed over in the past because it doesn’t have one.
The pavilion would primarily serve as a location for the municipal band to perform. It would be located at the north façade of Southbridge and corresponding plaza, and create new entrances for the mall itself. It would improve acoustics and provide more opportunities for free outdoor entertainment in the plaza.
Perhaps the most complex part of the project, the ice arena and multipurpose center would hold up to 4,400 for concerts and similar events. The Mason City Youth Hockey Club has committed $2 million to this part of the project, and would operate the ice rink for six months out of the year. Because of a memorandum of understanding between the city and club, the arena could only be used for multipurpose events for the other six months. That could change, however, according to city officials.
Goes by Mike Kohan and is president of Kohan Investment Group of Great Neck, New York. KIG purchased Southbridge Mall for $1.5 million in September 2016 and is doing business as Southbridge Mall Realty Holding LLC. As of Nov. 1, Kohan owes $210,854 in property taxes, after paying $28,190 in two tax sale properties (the mall sits on four parcels). If the mall is sold, all commitments related to the project will be the responsibility of the new owners.
A representative of Gatehouse Capital, whose company submitted a proposal when the city put out a request for proposals after Chodur defaulted. Gatehouse wants to build a 106-room Hyatt Hotel in the south parking lot of Southbridge Mall, connect it to The Music Man Square via a skywalk, build a conference center/ballroom in The Music Man Square and move the museum to an adjacent building. The city also received a proposal from Chodur but chose the Gatehouse plan.
The interim city administrator who replaced Brent Trout. He now handles many of the responsibilities of the project. As the city’s finance director, he understands much of the funding structures corresponding to each part of the project. But it is unclear when a permanent replacement will start, who will have many responsibilities in executing the project if the ballot items pass.
Mason City resident is one of the organizers of the "Mason City Says Yes" campaign, made up of residents who support the two public issues on the Nov. 7 ballot. The group submitted petitions with enough signatures to require the public vote.
The president of San Diego-based G8 Development first proposed to build a Hilton hotel in the parking lot west of City Hall but could not get Hilton approval. He then proposed to build a Marriott hotel in the same spot but failed to meet city deadlines to start construction and therefore defaulted on the development agreement. Chodur is now suing the city for breach of contract with a trial date set for November 2018.
1) The project has been in the works for several years now, and some citizens have doubts about the funding and execution of it. Initially, a parking ramp was proposed, costing the city hundreds of thousands of dollars. Now, that has been scrapped.
MASON CITY — The developer slated to build a hotel as part of Mason City’s downtown redevelopment project will go before a judge in March for his lawsuit against a city in California where he had another development agreement.
MASON CITY | G8 Development and Phillip Chodur are moving forward with a lawsuit against Mason City for what the plaintiff's attorneys are calling a "breach of contract" in the hotel development deal that's a part of the larger River City Renaissance Project.
MASON CITY | Gatehouse representative Dave Rachie said Monday the planned Music Man Complex & Hotel could add 120 jobs and $60 million for Mason City, but the timeline for that portion of the River City Renaissance Project remains in flux.
MASON CITY | Mason City has filed an answer and counterclaim to a February lawsuit alleging that it was guilty of breach of contract in a hotel development deal as a part of the River City Renaissance Project.
Mayor Bill Schickel announced in a Facebook post last week that Mason City officials had reached a tentative development agreement with Gatehouse Mason City LLC for a downtown hotel project as part of the broader River City Renaissance.