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City says Prestage hog plant snub causes delay in downtown hotel development

Philip Chodur
Philip Chodur

MASON CITY – In the on-going bizarre saga of a downtown hotel development for Mason City that has dragged on for nearly 3 years, the latest sour twist comes in the form of a delay blamed on the Prestage slaughterhouse snub.

City Hall in Mason City first announced that a hotel would be built in downtown Mason City back in 2013. After many twists and turns that led nowhere, the development most recently became tied to the “Our River City Renaissance” development, a 5-project undertaking that seeks $10 million in state dollars to get off the ground. A developer with ties to Mason City, Phillip Chodur, is the hotel developer seeking to build a Marriott hotel in a parking lot next door to city hall.

Whispers that the development has hit hard times once again seem to possibly be coming true now, as city hall documents show that Chodur has sought approved delays from city hall before breaking ground. The city council on Tuesday night, July 5, will consider amendments to a development agreement already signed with Chodur’s G8 Development company.

According to a memo from City Administrator Brent Trout:

7626 El Cajon Blvd. in La Mesa, California, home of G8 Development and Deluxe Trailer Park (Click graphic to view larger)
7626 El Cajon Blvd. in La Mesa, California, home of G8 Development and Deluxe Trailer Park
(Click graphic to view larger)

In the last couple of weeks Mayor Bookmeyer, Council Member Kuhn and I have had a couple of conversations with Philip Chodur regarding a request from him for an extension on the start date for his projects. He was seeking a six month extension on the start date for both projects but no change in the completion date. We did not feel that we should grant an extension of six months because of the need to begin this project given its connection to the Iowa Reinvestment District Act funding. In the end, we negotiated a three month extension for the hotel project and a four month extension for the mixed-use development for the reasons described below. The new commence construction dates will be October 31, 2016 for both projects if the amendments are approved.

Philip Chodur, G8 Development, decided, that based on the possibility of the Prestage Foods project happening, to change the design of his hotel to add an additional floor of rooms. The additional rooms would increase the revenue received in our reinvestment district and in our hotel/motel tax so this was a supported decision. He instructed his architect to design the hotel with the extra floor and had design and financial paper work done to prepare to meet with the Marriott Corporation to seek approval for the additional floor. In the end when the Prestage project did not move forward he had to have his architect switch the design back to the original design. The loss of time in this process was well over a month. The other issue that has delayed his progress is the decision to move the Generation 6 design for the hotel instead of the Generation 5 design of Marriott Courtyard hotel. The Generation 6 design will be a better design for our downtown area as its appearance will fit better with our existing buildings. The decision to do a Generation 6 design has caused additional redesign time in some areas because all previous design work had been done on the Generation 5 design.

The work was also to begin on the Mixed Use development on 2nd StreetNE and FederalAvenue by June 30, 2016 but he has not startedwork.Mr. Chodur has delayed the start of the project and requested the extension for this project primarily because of his decision to purchase and demolish the building on 2nd Street NE that “Little Chicago” is located in.The decision to add this additional space to the project will increase the square footage of the building and the number of rooms that will be built at this location. He will square off his building instead of having to build around the other building which will make space for more rooms and he also intends to build an additional floor of apartments.He has a contract to purchase the “Little Chicago” building and will execute purchase as soon as he receives the deed on the City property (which is in process). He will then begin demolition and site preparation at this location.

Philip Chodur has signed both of the amended development agreement documents and they are included in the council packet for your information and review. The completion by G8 Development of these projects has the quickest and best chance for moving forward. Mr. Chodur has been progressing on the completion of the requirements and is confident that he can begin the projects by October 31, 2016 and complete it by the deadline in each agreement.

The date October 31, 2016 was agreed to because if work is not commencing by this date, the chance of G8 Development building in this construction season is small. If the commence construction date is not met by G8 Development, then the City would then use the winter months to seek proposals from other developers to complete the projects so that construction could begin in the spring of next year. Approval of the amendment to the development agreement does not require a public hearing be held and may be approved by one vote by City Council.

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