MASON CITY | A San Diego developer says he will keep his word to build a hotel in downtown Mason City, with or without being part of the River City Renaissance project.
“As we have always said, we are going to build the Courtyard Hotel,” Philip Chodur said via email to the Globe Gazette late Friday afternoon. “We cannot put our financing at risk while the city plays more political games.”
Chodur, who operates G8 Development, initially proposed a Hilton in 2013, then a Marriott in 2014 to be built adjacent to City Hall.
In 2015, Chodur's hotel became a linchpin as the city sought $36.2 million in Iowa Reinvestment Act funding for its River City Renaissance project, which includes an ice arena/multipurpose center and music pavilion. As a contingency, Mason City is required to secure $10 million in private investment, which a hotel would satisfy.
On Friday, Chodur said he will build the Courtyard by Marriott at an alternative, 1 1/2-acre site -- the South Federal Avenue loop along Willow Creek.
"This site is about 200 feet directly south of Gatehouse's proposed project," Chodur said. Gatehouse Capital has pitched building its hotel in a portion of the Southbridge Mall parking lot.
Chodur has purchased the site on contract from Beck Higley LLC, according to paperwork filed with the county recorder’s office Jan. 31.
Socrates Pappajohn is listed as the registered agent for Beck Higley, according to filings with the Iowa Secretary of State’s Office. Jay Beck is listed as the LLC’s manager.
Chodur says he will build at the alternative site to protect his investment in his hotel project, which he estimated was close to $600,000 in November 2016.
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“We have spent hundreds of thousands of dollars on this project,” he said. “We have not asked for a penny from the city.”
In Gatehouse’s proposal, the city would be required to pay $3 million to $3.5 million in gap financing, or the difference between bank financing and owner equity. It would also put about $4 million toward remodeling The Music Man Square and connecting it to the hotel via skywalk.
The $3 million to $3.5 million in gap financing would be refunded to the city after 20 years, Gatehouse officials have said.
The total city investment of about $7.5 million (prior to the reimbursement) matches what the city investment would be in a parking ramp that is part of the proposal from G8 development, who would own the ramp after 20 years.
Chodur says his most recently proposed hotel, which would border South Federal Avenue, Fifth St. S.E. and South Delaware Avenue, is not in Mason City’s reinvestment district, disqualifying it from state funding the city seeks for the River City Renaissance.
“We will oppose annexation,” Chodur said.
Additionally, Chodur claims he holds exclusive rights to developing a Marriott franchise in Mason City. Gatehouse has also proposed to build a Courtyard by Marriott hotel.
As for The Music Man Square, which Gatehouse has proposed to remodel into a conference center, Chodur says there should be a fundraiser or public subsidy to benefit the nonprofit, “rather than millions spent on a misguided venture with little or no public benefit.”