MASON CITY – The Mason City City Council will consider an option agreement with a developer at its next regular meeting for a possible hotel to be built in a city-owned parking lot west of City Hall.
According to a City Hall memo, G8 Development and its owner, Philip Chodur, who has Mason City ties, have shown an interest in bringing a major chain hotel to downtown Mason City. The City entered into an exclusive negotiation agreement with G8 in June and since then have taken financial information from G8, which shows the company is “financially capable of completing downtown development projects” and “has experience with large scale hotels.”
There is no formal site development agreement in place. The exclusive negotiation agreement expires on November 25th but may be extended.
The memo claims that G8 “has been working with a major hotel chain” to develop a full-service hotel with restaurant and conference facilities and retail stores on an existing parking lot at Enterprise Alley between st Street NW and 2nd Street NW.
Mr. Chodur and G8 Development are seeking an option that extends property control to G8 so that Mr. Chodur can “formalize his arrangement with the hotel company. He wants to move forward with with design and initial financing, but is unable to do so unless he can show the hotel company that he has control of the property.”
The option “allows G8 to prove property control to the hotel company, but still allows the City and G8 time to negotiate the details of a site development agreement.”
The option agreement would expire six months after it is signed.
I’m guessing on the amount here…but I suspect a project as described could be in the ten million dollar range. You guys need to understand that it doesn’t matter what any of us percieve to be the need for a hotel downtown or whether we think its a good location. supply and demand decides that. and as a previous poster said–a company like Hilton is very good at making that determination. The city will be looking at it as an opportunity to expand the tax base. To encourage the project it may take some city assistance. I know you guys like to think thats the “great giveaway”. but think about it logically for a second. what does the city(ie taxpayers) recieve currently in property taxes on that location? the answer is zero(or very close). what is the likelyhood of ever recieving increased tax revenue on this location short of a project like this. the answer is zero. so, if the developer requests rebates for a few years-how is that costing anyone anything? after the rebate period ends all of the new tax revenue flows through to the city(ie tax payers). I don’t know why this concept is so hard for everyone to grasp or why it is demonized. The rebates or tif or what ever program they use is generally a drop in the bucket compared to the resources the developer will invest in the project–however its generally whats needed to keep our city competative with the other locations the developer may be looking at.
@jvs-here is a concept for you. We give them a million dollars in incentive and then we give them the downtown property for nothing, and then we give them zero taxes for eight years and they come in and build their business and then after not making any money for five years they write it off and leave town and we are still paying of the bonds, Oh. I forgot, we also have to move and upgrade all of the infastructure and roads and of course shut down the roads for 6 months while we do that and the existing business shut down because they have lost everything they had worked for. Now that is a concept that happens over and over in this town,
LVS, I would guess that you are fairly close when you say they wont pay taxes for eight years. however after that time we/city will recieve 100% of the taxes-which will be substantial and permanent. Do you really think Hilton would make that kind of investment and be gone in five years? perhaps they sell the property to another party…but the tax revenue doesnt go away. even if it werent occupied the owner would have to make tax payments. It’s not the great giveaway-its how its done. and in the longrun the tax payers benefit from the tax base expansion. Of course it would be great if no rebates/incentives were necessary. but if given the option of mega-project with incentives or no project at all–I think it should be a very easy decision for the council. of course they can call the bluff on the need for incentives–but they would do that at the risk of losing the project.
@jvs-what I am saying is negotiate. Don’t just give away everything. If they really think it is a good deal they will give a little. There was a hotel chain that was going to buy some property from the fair grounds a couple of years ago but backed down when Holiday Inn built their new motel. They didn’t come here because they said the market was saturated. If that was true then it is true now. Makes you wonder what they are really up to.
I agree, negotiate…..I do remember just a few years ago clear lake called the bluff on someone wanting to build a hotel on the east side of the interstate by the airport. They said no to assiting with some of the infrastructure improvements. I don’t believe they ever heard from that developer again…
I doubt they are “up to something”. perhaps the investments in downtown are beginning to pay off? I really doubt any hotel would have given any consideration to downtown mason city five years ago.
That same hotel group has a very old Clarion Inn. mr Chodur has ties to the community.I think this has lots of merit.
Seriously? Here is what the council is talking about. The Hilton would pay No taxes for several years, maybe up to 10. Plus, giving away the property. For nothing, Zilch. There was a gentleman who did speak up at a council meeting in October 2013 that wanted to PURCHASE this property and build. All I heard in response from the council was “sorry about that? Huh?? Do any of you listen to more than one side of this, and then make up your minds? WHY, does G8 get anything? NO other hotel in town (besides the Park Inn, a tourist & historical attraction) received any assistance. IF, they believe a Hilton hotel would be a big success in Mason City, let them do it with their own resources like all the other hotels, Hy-Vee, fareway and most every other businesses in town have done. Now, the other hotels have to compete against another subsidized hotel? In an already saturated market?? In 2012, the occupancy % in Mason City was 52%. Generally, break even for a hotel is 50%. Follow me? If this hotel gets subsidized and built (because they obviously can’t do it on their own) at LEAST one hotel will close, possible two. Now, not only does that city have two less business to tax, the city will not receive any revenue from this Hilton for several years as per agreement. What? How does that make fiscal sense? In this scenario, we collect LESS tax dollars for the general fund. Would any of you build a home you couldn’t afford? Would you go to the city for assistance? No. This whole Hilton/council situation is absurd.
@bob-great post. It makes very good sense what you are telling us. However, the elitist that are on our council probably will not listen. They are much smarter than everyone else you know.
Exactly. It is absurd. Kind of like the council holding a meeting this week in a greasy bar known for power drinking. Somethin smells bad at city hall again, but no one cares. They deserve everything they get now.
Oh, and by the way, G8 has been told by a Hilton representative named Susan (I will post her full name in a couple of days here I don’t have it at home) HAS informed them Mason City is not ready for another 96 hotel rooms. Folks, Hilton gets paid no matter what. They won’t tell anyone with enough money they can’t build a hotel where they want. Even if a hotel loses money, they still pay fees to the hotel franchise. Wow. How can you make statements like that when you have not even done your due diligence? Come on folks! Think a little…
The Hilton corp. has been around a long time and have always been a profitable company. If they want to build here and establish a presence, they have done their homework. They already know how many hotel rooms are available, how many are filled nightly, and how many people are traveling into Mason City. Believe me they would not build here if there was not a need, or a way to make a profit.
My only concern would be our city leaders doing the “great giveaway” again of tax abatements, free land, and other incentives. The Hilton corp. has got plenty of money they don’t need our tax dollars to build a hotel.
Looks to me as if this Chodur fella has had little discussion with Hilton. How far along he is, really, is anyone’s guess. I think he wants the agreement so he can START a serious dialogue, which has obviously NOT happened yet. I don’t see this going anywhere. Just more fluff and bs during an election.
Going to be a Hilton.
thats as stupid as it gets not enough room there for a building and parking it would just create a major congestion of traffic keep it on the edge of town there is our brain damaged city council at work again
Maybe they are planning to put a parking ramp under the hotel. We don’t know all the plans.
@Anonymous-And that is the problem. They just love to sneak in stuff that cost the taxpayers more money.
great idea. I would love to spend money in an establishment that is self sufficient and in no way related to steve noto. its a shame he gets any money out of this city
I don’t have to much of a issue with this although I think it will be the end of the Park Inn that we have so much money in. There will be no need for it at all once this new hotel opens. It was a specialty hotel and the newness is now wearing off. As long as the city doesn’t do the great give away again and the investor is willing to put up his own money to buy the property and develop it on his own. At the very least it will provide some low level jobs such as house cleaning and kitchen help. Again, IF the city does not give away our property. I did think that parking lot was for the overflow from the old whore house. What ever happened to that need?
@peter L.-I have known that for a long, long time. When we had Don, Jeff and Max an even Leonard at least we had someone who would listen to the lowly common person.
Don’t you live in Clear Lake?
If you build it, they will come.
How many of you have stayed in a hotel lately? Have you looked at some of the hotels in town. Several are in tough shape. There is a real shortage of places to hold wedding receptions and not much for meeting places either. Let’s not rush to judgement before all the facts are available to review. The hotel motel tax has been a big revenue producer for the city and the city has seen considerable growth in this revenue source since the hotel opened downtown. Most hotels look at around 65% occupancy for profitability. A 96 room hotel with a 60% occupancy and an average rate of $100 a night would produce about $5,800 a night, approximately $175.000 a month or about $2,000,000 a year. That brings in around an additional $130,000 a year in hotel motel tax. That’s all before you even begin to factor in construction costs and the jobs created in building the hotel. Right now the one parking lot generates some revenue(doubt if its even 10,000 a year) and the vacant lot is an eyesore at best. As far as city employees parking there is lots of parking behind Brick Furniture and Central Park Dentistry. Church goers to the church in the old Elks building could easily park in the county parking lot on weekends or on the streets. Many years ago Kingland wanted to buy the current city hall and the parking lot. Didn’t happen and they went to Clear Lake. Those were good jobs too. Let’s not get trapped into being only being naysayers..
I think it’s a great idea. Might help the downtown businesses & there realy is no hotels in town that can hold conventions & have large meetings. I also like the suggestion of a water park. Let’s think positive for a change.
Why? We have the Park Inn and we paid enough for that.
Maybe it can be have murder mysteries on the weekends. It’s worked for other places and, heck, its a stones throw from “Murder Mansion”. That might bring in some good money.
I don’t see anything wrong with what is stated in this article about the plans, it actually sounds good. Mason City needs a good conference center and this sounds like it with fit the bill and bring in retail business to the downtown area as well. There was no mention of City funds for this deal.
Attach a water park to it!
I like the idea myself… but what about parking? I don’t see this thing fitting in that space, and providing enough parking for patrons. The lot there is always full on week days, and the streets around it as well.
@John Colombo-you don’t live here so you don’t get a vote.
Hilarious!!!!! We thought the Park hotel was what you only needed?!!! There goes that one. Let’s all go to MC and have a good time, action packed…restaurants, shops, clubs oh ya we’ve arrived now! Not even a puddle of water to feast your eyes on. D U M B
There are business people that do stay in Mason City for business needs not only specific to this town. I think this hotel might have a chance, as many travelers prefer to stay in a hotel that is familiar and offers perks to make their stay more pleasant.
Now, do I think the average Mason City resident will think in these terms…probably not. What you have to remember is that many residents of this town have never left and are very narrow-minded. Not meant to be an insult, just really what I have observed and experienced first-hand.
This hotel may never happen at all, sounds like it’s all in embryo stage and being hyped. Seems like the newspaper wrote that it was a for sure thing, now we know it’s all BS. Just more lies from the Glob.