I’ve got the date on my calendar circled. July 23.
That’s the date the City Council will hold a public hearing on the development agreement between Gatehouse Mason City LLC and the city of Mason City on the hotel/conference center that is the kingpin of the River City Renaissance Project.
If things go according to what usually takes place, the council will then formally approve the agreement and it will be a giant step toward the renaissance that has been talked about for almost six years.
The key phrase here is “what usually takes place” because almost nothing about this project has been what usually takes place.
And there is still a “what if” nightmare scenario that could take place.
No need to go into elaborate detail on the history of this project. Well, maybe just a little.
Philip Chodur of G8 Development of San Diego first approached the council on Oct. 1, 2013, with the idea of building a hotel in the parking lot adjacent to the west side of City Hall. The council gave him the exclusive rights to try to develop the property. Chodur approached the Hilton hotel people about giving him the franchise. Hilton turned him down.
Chodur came back to the council a few months later with a new proposal, this time to build a Marriott hotel on the same site. A development agreement was reached, but when Chodur repeatedly failed to meet deadlines to start construction, the city severed ties with G8 and sought new bidders for the project. Two companies responded, Gatehouse Capital of Dallas – and G8.
Not surprisingly given the recent past history, the council chose Gatehouse. G8 filed suit against the city for breach of contract from its previous dealings. The site for the proposed hotel had been moved to the south parking lot of Southbridge Mall.
The city negotiated back and forth with Gatehouse. In the meantime, voters approved two ballot issues to move the project forward with the knowledge that Gatehouse was the developer.
But there had been so many changes in the proposed project that the city was obligated by state law to provide a 30-day period for any other developer to come up with a competitive bid. And guess what. G8 did. And, not surprisingly, G8 said it would drop its lawsuit against the city if the city awarded the contract to G8.
A “bid off” was held in which Gatehouse and G8 were invited to submit bids on each individual piece of the project. Gatehouse had already submitted what it called its final bid to the city – so to change anything in the “bid off” would have been dishonest on their part, so they didn’t.
So G8, knowing what Gatehouse’s figures were, was able to come in with a lower bid than Gatehouse and won approval for the project. Many voters who had approved the two ballot issues when Gatehouse was the presumed developer accused the council of a “bait and switch” tactic.
Earlier this year, when the city claimed that G8 once again was not living up to its end of the bargain, it dropped them from the project and renewed its relationship with Gatehouse.
Like sands through the hour glass, these are the days of our lives.
So Gatehouse is in, G8 is out and G8 once again is suing the city.
As mentioned earlier, the public hearing on the Renaissance project is set for July 23.
Oh, there’s just one other thing. As was the case earlier, any developer that wants to offer a competitive bid to Gatehouse’s final proposal may do so between now and the date of the hearing.
Remember, I mentioned a possible nightmare scenario?
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The hotel should cost about $17.57 million. This would be paid with a combination of private loans/equity and tax increment finance, or TIF, funds.
This would be about $3 million. It would be paid with TIF funds, along with tax breaks through the Iowa Reinvestment Act.
The new Music Man Square Museum would cost $1.5 million. It would be funded completely with Iowa Reinvestment Act funds.
The skywalk which would connect the Music Man Square Museum to the conference center would cost $2.5 million. It would be paid with TIF money.
The new pavilion is estimated to cost $1.65 million. This would be funded through private grants and Iowa Reinvestment Act money.
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 Mason City mayor has championed the project from the beginning and made presentations in Des Moines that led to the city's pre-application for state funding to be approved.
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.
The former Mason City city administrator, now in Topeka, Kansas, was the city's chief negotiator and made numerous trips to Des Moines in support of the project, including his last day on the job.
The late City Council member accompanied Bookmeyer to Des Moines and helped with the presentations to state officials.
If the ballot items do pass, how much money will the IEDA award to Mason City?
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.
1) The city's population has declined since 2000, and supporters claim this project would help bring people back to town, especially younger people as the working population continues to age.
The first ballot issue asks whether the city should enter into a lease agreement to construct an ice arena/multipurpose center with a total construction and lease cost not to exceed $18 million.
MASON CITY | The clock is ticking for Philip Chodur, who is developing a downtown hotel for the River City Renaissance Project.
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 | Mason City is moving forward with the downtown River City Renaissance Project and it’s leaving Philip Chodur behind — again.
DES MOINES -- A familiar name is back in the picture as Mason City attempts to move forward with its downtown River City Renaissance Project.
MASON CITY | The Mason City Council in a special meeting Tuesday will consider approving two items related to the River City Renaissance Project – the downtown hotel and ice arena.
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.
After months of negotiations, it appears downtown Mason City is one step closer to getting its hotel and conference center.
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.
Tuesday night's Mason City Council meeting marked a seemingly small but significant first.
John Skipper retired from the Globe Gazette in February 2018 after 52 years in newspapers, most of that in Mason City covering North Iowa government and politics.