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Aerials Mason City Southbridge

Mason City Southbridge

MASON CITY | G8 Development President Philip Chodur in an email Thursday night claimed G8 is in full compliance with the development agreement for the downtown hotel, and that the city and state are not.

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Philip Chodur

Chodur

He also blasted three community leaders who supported the Gatehouse Mason City LLC proposal and questioned why they still hold their jobs.

The email, in response to a question from Councilman Joshua Masson about finalizing financing for the project, was sent to council members, key city officials, stakeholders, a state economic development official and the Globe Gazette.

"The state and the city need to do what is required under the PSDA (Purchase, Sale and Development Agreement)," Chodur wrote at 11:02 p.m. "Robin Anderson, Delena Barz and Elizabeth Allison need to be benched. Their underhanded self-serving dealing have put this project in jeopardy for far too long. Why they still hold the positions they do is beyond comprehension."

Anderson heads the Mason City Chamber of Commerce. Barz is a member of the Mason City Foundation Board. Allison is the executive director of The Music Man Square.

Anderson deferred comment Thursday to Kelly Hansen, chairman of the Chamber of Commerce's board. Hansen defended Anderson via email Thursday afternoon.

"Robin Anderson is a savvy businesswoman and visionary who has spent her career making North Iowa a better place," he said. "We’re proud to have her lead our organization."

In a follow-up call, he said that although Anderson and others have criticized G8 in the past, it's important to keep the project moving forward for the good of Mason City.

"These are City Council decisions, and you know this project revolves around that," Hansen said. "The Council has a responsibility to move this forward and because of the importance of it ... we’re relying on the Council and the city to make the right decisions."

Barz said via email she is "100 percent committed" to the River City Renaissance Project, and she is "looking out for the best interests of The Music Man Square."

She noted the board is working with G8 to put together a memorandum of understanding, an agreement between parties outlining requirements and responsibilities. 

Allison also said via email she is behind the project, and she is working with  on a memorandum of understanding between G8 and the Music Man Square.

"I have been and continue to be a strong supporter of the River City Renaissance Project and believe it has great potential for the benefit of Mason City," she wrote, later adding: "We look forward to the progress of this project.”

G8, a San Diego-based development company owned by Chodur, was chosen to build a hotel in the Southbridge Mall parking lot, connect it to The Music Man Square via a skywalk, and build a conference center inside The Music Man Square.

The hotel is a key component in the city's River City Renaissance project that also includes a performing arts pavilion and an ice arena/multipurpose center. One of the requirements is $10 million in private investment. The hotel is valued at $15 million. 

The total project is estimated at more than $38 million. The city has applied for up to $10 million in state money through the Iowa Reinvestment Act to help leverage the project. 

The Iowa Economic Development Authority, which oversees the Iowa Reinvestment Act, is scheduled to discuss the project Friday in Des Moines. No vote is expected.

Earlier this week, Interim City Administrator Kevin Jacobson said the city was two-thirds of the way toward meeting IEDA requirements for state funding help with its downtown redevelopment project.

Jacobson said the development agreement with G8 has been signed and G8 has dropped a lawsuit against the city. The remaining requirement is proof of appropriate financing from G8.

But Chodur, responding to the email from Masson, said, "The city has not done the things required under section 3.1 (of the development agreement).

"We are out signing contracts for services which, at this point, the city has not done its part to make sure the service providers get paid for their services," Chodur said.

"Development requires that a certain order is followed in the completion of tasks. Until plans are to the construction document stage, where all costs are calculated, underwriters can't underwrite and they certainly can't underwrite when the city and state have not fulfilled their obligations within the PSDA.

Jacobson said Thursday, "According to Section 3.1 of the development agreement, the two items that need to take place are the IEDA board approval and a memorandum of understanding between G8 and the Mason City Foundation (operator of The Music Man Square).

"We are working on the board approval, and G8 and the foundation are working on the memorandum of understanding," Jacobson said.

Chodur originally planned to build a hotel next to City Hall. When he failed to meet several construction deadlines, the city found him in default and the deal fell through. City officials said at the time that Chodur could not get financing.

But in his email to Masson, Chodur wrote, "The last time, we had loan approval for the project and a USDA guarantee. There is no reason to believe that Live Oak (bank) will not again approve the project.

"They (bank) were assured by Brent Trout (former city administrator) that the project would be given back to G8. Based on the assurance, they brought their whole team on their corporate jet to Mason City. Everyone spent a great deal of time and money. Here we are a year later trying to move forward again in an orderly manner."

Trout said via email Thursday evening that city council members, not he, had the authority to select the hotel developer—and thus, he didn't believe he would have presented it as an assurance to Live Oak Bank. He added Live Oak is a "quality and experienced bank," given its past projects with the USDA.

"They were very interested in supporting Mr. Chodur and his project," Trout wrote about Live Oak, adding: "Which was evident by their decision to provide a letter committing to financing of the project at the time that we were considering a selection at the end of the RFQ (request for quotation) process."

Chodur is apparently referring to the circumstances after he defaulted. The city put out requests for new bidders. G8 and Gatehouse responded. The City Council approved the Gatehouse proposal.

The council negotiated with Gatehouse for about six months. Because of substantive changes during the negotiations, the city was required by state law to put the project out for bids once again. G8 submitted a bid that Council found more favorable than Gatehouse's and voted to go with G8.

In his email, Chodur said, "We are 5-6 months ahead of where Gatehouse would have been at this point. With the $150,000 they received, they should have had a franchise and schematic design approval from Hyatt. At the very most, the costs incurred for what was done should have been around $30,000, not $150,000.

"Everyone needs to do their job. We know how to do our job and we have great local partners for the construction and hotel management. We are receiving none of the state grant money."

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