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Mason City to bring back Gatehouse to build hotel


This news story was published on November 21, 2018.
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David Rachie, who invented Gatehouse Mason City, LLC, is back in the game with a fresh pen to sign off on checks from taxpayers.

MASON CITY – America is the land of second chances, and nowhere is that monicker more firmly displayed than Mason City, Iowa, where the City Council will consider giving Gatehouse Mason City, LLC a second shot at trying to build a hotel in the downtown area to help the befuddled Renaissance Project survive.

A Special City Council Meeting has been scheduled for Tuesday, November 27, 2018 at 4:00 PM in the Mason City Public Library. At this meeting, the council will consider a proposal from Gatehouse Mason City, LLC, to build a hotel in the city’s downtown area. Ironically, it was almost exactly a year ago that the city council ousted Gatehouse for G8 Development to try to build a hotel for a second time.  It was said at that November council meeting that taxes would go up in Mason City if Gatehouse were to be the developer.  As NIT readers know, recently, the council fired G8 Devlopment for a second time.  The city has spent hundreds of thousands of dollars on the Renaissance Project since its conception in 2013.  The project has morphed over the years, but supposedly now includes a hotel, arena, pavillion, skywalk, a 100-story skyscraper, a water park, a 1,000 car parking ramp, a 6-lane freeway to Manly, and … oh wait, what does it matter, the project will probably change again anyway.

City Administrator Aaron Burnett is recommending the council approve an agreement with Gatehouse.  His review reads:

The River City Renaissance (RCR) project has been stalled as the contract with G8 was terminated and a new path forward was considered. After this termination, Gatehouse expressed interest in returning to this project to complete the project. City staff and the partners in the project considered several factors and determined that timeframe and ability are the two most relevant considerations with respect to the developer that is chosen to complete the RCR project. Gatehouse is the recommendation for the path forward with this project due to their familiarity with the project and partners, their history of completing projects of similar scope, and their ability to start quickly on the RCR. The Gatehouse proposal has $100,000 in payment included to complete a list of activities to bring the project forward to an agreement. These include such things as updating the plan due to changes in status of land around Music Man Square, updating the market study, providing drawings, term sheets, pro-forma and budgets for the development. This payment along with the previous $150,000 would be refunded to the City 45 days after the project is funded. While the City could consider more time consuming approaches such as a Request for Qualifications or Proposals and potentially have more options, it is doubtful that any such proposals would be substantially different with respect to incentives requested and would certainly carry longer timeframes. Any further delays will likely result in the loss of partners and/or, the loss of the Reinvestment District through the Iowa Economic Development Authority.

Could Gatehouse and Mason City end up in court over their plan to build a hotel? The venue would be set ahead of time if council approves a deal Tuesday night.

City Hall must pony up $100,000 to Gatehouse by December 4. There is an alleged chance that if things work out, the city would recover the $100,000 plus $150,000 the city already paid to Gatehouse in the past. Gatehouse – perhaps ominously – makes clear in a letter to the city that should things go bad again, “The parties agree that the sole and exclusive venue for any and all disputes regarding or arising out of this agreement shall be in the state district court located in Cerro Gordo County, Iowa, and further agree that this venue is convenient and will not seek a change of venue or seek to dismiss an action.”

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45 Responses to Mason City to bring back Gatehouse to build hotel

  1. Avatar

    Anonymous Reply Report comment

    November 26, 2018 at 4:21 pm

    The owner of the malls property tax checks bounced. Hahahahahahaha sorry city council, if he defaults on his taxes, this is a dead deal for everyone. Good job getting the scum of the earth involved. Awesome job! You are all fired!

    • Avatar

      Anonymous Reply Report comment

      November 26, 2018 at 4:35 pm

      They are pushing forward with everything but the hotel, because they think things will fall into place. Real life shows they will give gatehouse the money again, just for everything to fall in on itself, and then gatehouse keeps the money, scott free.

      • Avatar

        Anonymous Reply Report comment

        November 26, 2018 at 6:28 pm

        I have so little respect for our city government, but I just can’t believe they are stupid enough to try to do business with a lying creep like the guy who owns the mall.

  2. Avatar

    Anonymous Reply Report comment

    November 26, 2018 at 12:05 pm

    and playing Robin Andersooon with be Maxine Waters in this MC Soap Opera.

  3. Avatar

    Anonymous Reply Report comment

    November 26, 2018 at 11:44 am

    ..so let me get this right, we went with a hotel builder that couldn’t find financing, then we went with a hotel builder that took our money and ran, then we went back to the original hotel builder that couldn’t find financing again, now we want to go back to the hotel builder that burned through our money gift, and needs some more. IS THAT ABOUT THE JESS? when no business minds sit on our council, the city suffers. This needs a re vote for sure.

    • Avatar

      Anonymous Reply Report comment

      November 27, 2018 at 11:09 am

      The city counsel and it’s crony friends are lining their pockets and getti g what they want! You really think they give a f**k about YOU the taxpayers? Think again!

  4. Avatar

    Anonymous Reply Report comment

    November 26, 2018 at 1:13 am

    the city hall baffoons have changed their strategy, new one is “we don’t care who builds it or what it costs, just build it” 34 million is gunna turn into 43 million, mark my word on it.

    • Avatar

      Anonymous Reply Report comment

      November 26, 2018 at 4:18 pm

      The public library is a prime example. What was agreed upon ended up being doubled. The cost to remodel that building was insane. You could have ripped it down, and built new for half the price.

  5. Avatar

    Registered Voter Reply Report comment

    November 24, 2018 at 11:15 am

    Thank goodness this is moving forward and the city is not giving up on it. They are dong what the people that took the time to vote want and, in a democracy, that is alway a good thing.

  6. Avatar

    Anonymous Reply Report comment

    November 22, 2018 at 11:29 pm

    Definition of Insanity : Doing the same thing over and over, getting the same fesult !!

  7. Avatar

    Rukidding Reply Report comment

    November 22, 2018 at 6:05 pm

    Hopefully we don’t fork over anymore money until there is some proof this thing is going forward. Not sure if this guy is anymore trustworthy then the last.

    • Avatar

      Doctorcy80 Reply Report comment

      November 23, 2018 at 6:18 am

      Thanks for the web page! For those who haven’t gone there, here’s what you would have been informed: Taxpayers across America shelled out at least $4.8 million last year to fund government-run ice rinks, and some city governments are running deficits in the tens of millions of dollars, all in an effort to subsidize ice skating and hockey playing.

      The Washington Times analyzed 16 government-funded rinks — from Niagara Falls, New York, to Cheyenne, Wyoming, and found all were costing taxpayers more than the revenue they were bringing in. Maintenance fees, low ticket sales and high equipment costs, such as the ice resurfacer Zamboni, all contributed to the deficit, according to the analysis.

      “This is such a ludicrous waste of taxpayer money. I would say to all politicians ‘Let it go’ and not spend any more money on ice rinks,” said David Williams, president of the Taxpayers Protection Alliance, a government spending watchdog. “Ice rinks are not a priority for most citizens. Fixing the streets, making sure the people are protected, those are government’s jobs. Ice rinks are a luxury, a vanity project, and should be privately funded.”

      For using taxpayer money and issuing debt, all in the effort to appease figure skaters and ice hockey players, government-run ice rinks wins the Golden Hammer, a weekly distinction given by The Times that highlights examples of wasteful spending.

      Niagara Falls, where frigid temperatures allow for outside rinks in the winter, has subsidized two indoor regulation-size hockey rinks. The rinks are generally rented by the hour by local and out-of-town hockey players for leagues, tournaments and pickup games, but the money those patrons pay for its use falls incredibly short of the cost of maintaining the facility.

      • Avatar

        Anonymous Reply Report comment

        November 23, 2018 at 8:37 am

        Good thing we’re not building a ice hockey arena. We’re building a multi purpose arena that can also generate revenue from shows, concerts, and other sporting events.

        • Avatar

          Anonymous Reply Report comment

          November 23, 2018 at 3:06 pm

          Are you really that ignorant?
          The hockey group wants total control of the “arena” from September though April.

          • Avatar

            Anonymous

            November 23, 2018 at 4:22 pm

            That’s 6 months out of the year that other shows, concerts, and sporting events can generate revenue in the multi purpose facility plus all the revenue from concesstions. And this facility already has a guaranteed rent paying tenant in place from September through April?!?! Thats fantastic!!!

          • Avatar

            Anonymous

            November 23, 2018 at 4:47 pm

            Paying rent that does not cover their cost, not even close. You don’t build things in hopes of people wanting to use them, you build them because there is a need, and nowhere else to do it. There is NOT a need, nor has there been an issue with finding venues for events.

          • Avatar

            Anonymous

            November 23, 2018 at 6:23 pm

            @ Anonymous November 23, 2018 at 4:22 pm
            It’s official, you’re an idiot.

        • Avatar

          N.E.MCMAN Reply Report comment

          November 24, 2018 at 12:51 pm

          At 1st I was a big supporter of the “multi-purpose” facility. My kids were involved in Parks & Rec. sports and there is/was a shortage of indoor space for basketball, volleyball, etc… in the winter.

          Found out that this space WOULD NOT be available for those activities during the winter. Hockey only. Then heard that the hockey people agreed to the term “multi-purpose” to get this passed but in reality in a few years it will be hockey only, all year, ALL THE TIME!!! as it will be too much hassle/cost to convert it from ice to a place for shows concerts, etc.. so it will stay ice ALL THE TIME.

          • Avatar

            Anonymous

            November 26, 2018 at 4:16 pm

            I really hope this is true. I have been waiting on an opening to sue the city over this ordeal.

        • Avatar

          Anonymous Reply Report comment

          November 26, 2018 at 11:47 am

          ……………..due to concert rider demands, this facility WILL spend thousands more just to fulfill the rider from staged talent.

        • Avatar

          Anonymous Reply Report comment

          November 26, 2018 at 11:52 am

          IS IT TIME TO BLACK BALL ALL HOCKEY ASSOCIATIONS AND ELEMENTS IN THE TOWN AND COUNTY, AND SEND A MESSAGE.
          This is not what we voted on.

  8. Avatar

    Anonymous Reply Report comment

    November 22, 2018 at 8:57 am

    Man that shyster hasn’t missed any meals !

  9. Avatar

    Anonymous Reply Report comment

    November 22, 2018 at 8:55 am

    Don’t walk away ! RUN ! KOOL AID for free ! Okay! being serious – What ? Tom Hanks – STUPID IS AS STUPID DOES – or keep making the same mistakes expecting a different result ? liberalism/socialism/stupidity ? Or follow the money trail – yes your hard earned money from YOU to THEM ! $$$$$$$$$$$$

  10. Avatar

    front desk Reply Report comment

    November 21, 2018 at 10:33 pm

    really nice of the city to build hotels to compete with the hotels that are already here paying taxes

    • Avatar

      Anonymous Reply Report comment

      November 22, 2018 at 2:52 am

      The city isn’t building a hotel. The hotel is private investment. Every new hotel built on in this town for at least the past 15 years has received some sort of tax incentive, so this RCR hotel is at no more of an advantage than any other hotel

      • Avatar

        Anonymous Reply Report comment

        November 22, 2018 at 12:20 pm

        Are you dumb, or did you just not read the original comment? Competing hotels….. Meaning hotels that are already here, will lose business due to not having enough customers to fill the rooms. How hard is it to understand this? Are you not taught economics in school anymore? This is wrong in so many ways.

        • Avatar

          Anonymous Reply Report comment

          November 22, 2018 at 12:38 pm

          What’s wrong with private investors adding anything to any market??? Seems like competition is good for everyone; markets operate efficiently and consumers reap value in competitive marketplaces.

          I read the original comment, you clearly have not. The author is erroneously thinking the city is developing a hotel. This couldn’t be farther from the truth as it is a private investor developing the hotel.

          • Avatar

            Anonymous

            November 22, 2018 at 1:08 pm

            Uhm… what? Like I said before, you lack economic understanding. There is already competition in town. Places will close down due to our city leaders allowing an over population of certain types of businesses. Im done trying to explain this to people like you whom feel they know better, when they really have no clue. There has to be a balance between demand and competition. Without the demand, there is no logical explanation for adding more competition. Just like ashley furniture had no business coming into town.

          • Avatar

            Anonymous

            November 22, 2018 at 2:25 pm

            You seem to be suggesting that the government should manage all markets. That’s a bad economic model, in my opinion.

            If a private investor wants to build a hotel in this town , let them. If the addition of another hotel puts another hotel out of business, so be it. Survival of the fittest.

          • Avatar

            Anonymous

            November 22, 2018 at 3:32 pm

            City planning commitees……. or do they not exist in your world?

          • Avatar

            Anonymous

            November 22, 2018 at 4:18 pm

            The role of community planning committees is not to regulate commerce. They ensure a communities development pattern is in alignment with the communities vision. In no way should they be dictating how many hotels a community is allowed to have.

            Many of you seem to really be confusing and his hotel as a city sponsored development. The hotel is private investment. No different than any other hotel in this community.

          • Avatar

            Anonymous

            November 22, 2018 at 6:43 pm

            And where does this guy proclaim to have received an advanced education on economics?!?! Demand vs Competition?!?! Do you mean supply vs demand? No room for competition in your economic model?? Governments role is to define market size??? Please tell me you flunked out of a Minnesota Junior College with your amazing grasp of economic principals.

          • Avatar

            Anonymous

            November 23, 2018 at 4:52 pm

            The city planning committee is responsible for feasibility studies. Id like to see a legit study showing this area is even able to fill one events center “north iowa events center” let alone two. Id like to see the impact on other businesses ect. That is their job, and if you can’t understand that, you need to shut the f up. You are doing more harm than good.

          • Avatar

            Anonymous

            November 23, 2018 at 5:49 pm

            Totally FALSE. Community planning committees do not carry out feasibility studies. Whether or not a business is viable is completely within the domain of the private sector.

          • Avatar

            Anonymous

            November 23, 2018 at 7:25 pm

            Okay, so was there a study done by anyone at all? If the planning committee is not responsible for such things, who is? No one? If there was a study done, who did it? Id like to see what they came up with. Does the north iowa events center get help, or are they able to cover their costs on their own? Can downtown even handle somethjng like this? Can the events center stay open, or will they have to close? Why is no one worried about having another huge area sit empty? We are trading one bandage, for another much bigger bandage. When really we need surgery, and stitches.

          • Avatar

            Anonymous

            November 23, 2018 at 10:54 pm

            No study is needed. Why do you think it necessary to pay a consultant to tell us what we already know. The North Iowa Events Center is not a viable facility for sports, shows, and concerts. There is opportunity cost in not replacing that badly outdated, Inadequate pole barn.

          • Avatar

            Anonymous

            November 24, 2018 at 3:17 pm

            What you already know? That this is an obvious tax burden? Or that other cities have shown this type of facility doesnt make money? Not hard to see this is a horrible idea. You are correct, we don’t need a consultant, we need an unbias company to come in and audit the city and city workers personal properties. Get these criminals into black and white stripes where they belong. If you can’t account for where or how you got something, good chance it was illegal.

          • Avatar

            Anonymous

            November 25, 2018 at 10:57 am

            What other cities are you referencing that show ‘these things’ don’t make money?!?!? How has the quality of life been impacted in cities where additional recreational opportunities are available??? What is the opportunity cost to Mason City by continuing to rely upon an ancient metal pole barn that sits on the edge of town for convention and event space and has this cost been factored into your assessment??

    • Avatar

      Anonymous Reply Report comment

      November 22, 2018 at 1:13 pm

      The city is technically forking over millions to subsidize this, so the original comment is not far off. It will take several decades to get back the bonds sold to finance this pipe dream. There is no profit involved in this idea. None at all, take a nice hard look at other citys that have tried to do the same thing. They were stuck with millions in expenses after accounting money made from events and hockey.

      • Avatar

        Anonymous Reply Report comment

        November 22, 2018 at 4:23 pm

        We forked over millions in incentives for the Hampton inn. Millions in incentives for the holiday inn. It’s only fair we do the same for this private investor who would actually be doing this City a much bigger favor than these two by unlocking access to tens of millions in state dollars to use towards a multi purpose arena that a overwhelming majority of the voting public indicated they wanted

    • Avatar

      Anonymous Reply Report comment

      November 22, 2018 at 1:17 pm

      A good deal comes with many whom want to reap from said good deal. The two investors that are interested have made their money not by good business practices, but by using legal action to safe guard their thefts.

      • Avatar

        Anonymous Reply Report comment

        November 22, 2018 at 1:28 pm

        This moron doesn’t understand predatory pricing. Wal mart, amazon, ect used predatory pricing in order to gain legal monopolies.

      • Avatar

        Anonymous Reply Report comment

        November 22, 2018 at 1:30 pm

        You can start an LLC in iowa for 50 bucks.

  11. Avatar

    Anonymous Reply Report comment

    November 21, 2018 at 7:17 pm

    What is wrong with our town? Seriously if they build another hotel downtown ( which we dont need) they will put there lovely park inn out of business