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Mason City and Gatehouse have development agreement ready for 95-room hotel; City council to consider at next meeting


This news story was published on June 14, 2019.
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Video image of this morning’s announcement via social media

MASON CITY – Mayor Bill Schickel and City Administrator Aaron Burnett announced this morning that Mason City and Gatehouse have a development agreement ready for a proposed 95-room hotel as part of the downtown Renaissance project and the City council will consider the “long legal document” at its next meeting Tuesday evening.

Watch the following video posted Friday, June 14, 2019

The Mason City council will consider a resolution Tuesday night:

RESOLUTION NO. 19 – 148

RESOLUTION (1) APPROVING THE MINIMUM DEVELOPMENT REQUIREMENTS, COMPETITIVE CRITERIA, AND PROCEDURES FOR DISPOSITION OF CERTAIN PROPERTY LOCATED WITHIN THE URBAN RENEWAL AREA; (2) DETERMINING THAT THE PROPOSAL SUBMITTED BY GATEHOUSE MASON CITY, L.L.C. SATISFIES THE OFFERING REQUIREMENTS AND DECLARING THE INTENT OF THE CITY TO ENTER INTO A PURCHASE, SALE, AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF MASON CITY, IOWA AND GATEHOUSE MASON CITY, L.L.C. IN THE EVENT THAT NO COMPETING PROPOSALS ARE SUBMITTED; AND (3) SOLICITING COMPETING PROPOSALS.

WHEREAS, by Resolution No. 15-238, adopted October 20, 2015, this Council found and determined that certain areas located within the City are eligible and should be designated as an urban renewal area under Iowa law, and approved and adopted the Mason City Downtown Reinvestment Urban Renewal Plan (the “Plan” or “Urban Renewal Plan”) for the Downtown Reinvestment Urban Renewal Area (the “Area” or “Urban Renewal Area”) described therein, which Plan is on file in the office of the Recorder of Cerro Gordo County; and

WHEREAS, the Plan has been amended by Amendment No. 1 as approved by Resolution No. 17-88 on May 11, 2017, by Amendment No. 2 as approved by Resolution No. 19-98 on April 16, 2019, and as proposed to be amended by Amendment No. 3 on July 2, 2019; and

WHEREAS, Gatehouse Mason City, L.L.C. (“Gatehouse”), wishes to purchase from the City certain property located within the Urban Renewal Area (the “Hotel Property”), as defined in a proposed Purchase, Sale, and Development Agreement between the City and Gatehouse (the “Agreement”); and

WHEREAS, the City intends to sell the Hotel Property to Gatehouse in exchange for $1.00 and other consideration under the Agreement, pursuant to the terms of the Agreement; and

WHEREAS, pursuant to the Agreement, Gatehouse would be obligated to, among other things, construct and operate certain Minimum Improvements including the construction of Convention Center Improvements on the Music Man Square Property (as those terms are defined in the Agreement) and a 95 guest room hotel and convention center on the Hotel Property, and in exchange the City would (i) sell the Hotel Property to Gatehouse; (ii) complete the Skywalk Improvements on the Skywalk Property (as those terms are defined in the Agreement); (iii) provide a Grant to Gatehouse in an amount not to exceed $8,700,000, under the terms and following satisfaction of the conditions set forth in the Agreement; and (iv) provide 80 consecutive quarterly Local Hotel Tax Rebates to Gatehouse equal in amount to 50% of the Local Hotel Tax generated by operations on the Hotel Property, under the terms and following satisfaction of the conditions set forth in the Agreement; and

WHEREAS, in order to comply with Iowa Code Section 403.8, the City is establishing reasonably competitive bidding procedures for the disposition of the Hotel Property and all developers interested in submitting a proposal to compete for the sale and redevelopment of the Hotel Property must submit a proposal meeting the requirements set forth herein; and

WHEREAS, to both recognize the firm proposal (in the form of the Agreement) from Gatehouse for the disposition and redevelopment of the Hotel Property already received by the City, and to give full and fair opportunity for other developers interested in submitting a proposal for the sale and redevelopment of the Hotel Property, this Council should by this Resolution:

1. Set the fair market value of the Hotel Property for uses in accordance with the Plan.

2. Approve the minimum requirements for the sale of and redevelopment of the Hotel Property.

3. Approve Gatehouse’s general terms as to form of the Agreement, subject to modifications and revisions as determined appropriate by the Council.

4. Set a date for receipt of competing proposals and the opening thereof; and provide for review of such proposals with recommendations to this Council in accordance with established procedures.

5. Declare that the Agreement submitted by Gatehouse satisfies the requirements of the offering, and that in the event no other qualified proposal is timely submitted that the City intends to accept Gatehouse’s proposal and enter into the Agreement.

6. Declare that any competing proposals must include the redevelopment of the Hotel Property with construction similar to or exceeding the standard proposed in the Agreement.

7. Approve and direct publication of a notice to advise any would-be competitors of the opportunity to compete for the sale of the Hotel Property on the terms and conditions set forth herein.

8. Declare that in the event another qualified proposal is timely submitted, another and future notice will be published of the intent of the City to enter into the resulting contract, as required by law.

WHEREAS, this Council believes it is in the best interest of the City and the Plan to act as expeditiously as possible to offer the Hotel Property for redevelopment as set out herein.

NOW, THEREFORE, BE IT RESOLVED, BY THE CITY COUNCIL OF MASON CITY, IOWA:

The Hotel Property offered for sale and redevelopment in accordance with the terms and conditions contained in this Resolution and the Plan is legally described as follows:

THE EAST-WEST ALLEY LYING NORTH OF AND ADJACENT TO LOT FOUR (4), AND THE SOUTH ONE HUNDRED AND EIGHTY-FOUR FEET (184’) OF LOT THREE (3) AND ALL OF LOTS FOUR (4), FIVE (5), AND SIX (6) OF AUDITOR’S PLAT OF LOTS TEN (10) AND ELEVEN (11) IN AUDITOR’S PLAT OF THE SOUTH ONE-HALF (1/2) OF THE SOUTHWEST ONE-QUARTER (1/4) OF THE NORTHWEST ONE-QUARTER (1/4) AND THE NORTH ONE-HALF (1/2) OF THE NORTHWEST ONE QUARTER (1/4) OF THE SOUTHWEST ONE QUARTER (1/4) IN SECTION 10-96-20, EXCEPTING THEREFROM ALL PORTIONS OF SAID EAST-WEST ALLEY AND SAID LOTS LYING EASTERLY OR SOUTHEASTERLY OF THE WESTERLY RIGHT-OF-WAY LINE OF US HIGHWAY 65; AND

LOTS ONE (1) THROUGH FOURTEEN (14) IN STANBERRY ADDITION TO MASON CITY, IOWA, AND THAT PORTION OF THE NORTH-SOUTH ALLEY LYING EAST OF AND ADJACENT TO SAID LOTS, EXCEPTING THEREFORM THOSE PORTIONS OF SAID NORTH-SOUTH ALLEY AND OF LOTS THIRTEEN (13) AND FOURTEEN (14) LYING SOUTHEASTERLY OF THE WESTERLY RIGHT-OF-WAY LINE OF US HIGHWAY 65; AND

THE SOUTH THIRTY-FIVE (35) FEET OF THE AUDITORS PLAT OF LOTS ONE (1) THROUGH FOURTEEN (14) OF THE SOUTH ONE HALF (1/2) OF THE SOUTHWEST ONE QUARTER (1/4) OF THE NORTHWEST ONE-QUARTER (1/4) AND THE NORTH ONE-HALF (1/2) OF THE NORTHWEST ONE QUARTER (1/4) OF THE SOUTHWEST ONE-QUARTER (1/4) IN SECTION 10-96-20, MASON CITY, IOWA.

2. It is hereby determined that in order to qualify for consideration for selection, each developer must submit a proposal which contains terms no less favorable to the City than those set forth in the Agreement submitted by Gatehouse and which must include and provide for the developer’s purchase of the Hotel Property at not less than the fair value for use in accordance with the Plan.

3. It is hereby determined, based on investigation by the City, that the proposed sale price of the Hotel Property of $1.00, as provided in the Agreement, is equal to or greater than fair value when considering all of the obligations set forth in the Agreement, and is hereby approved. The proposed sale price and the terms of payment as described in the Agreement are hereby approved.

4. It is hereby determined that the Agreement submitted by Gatehouse satisfies the requirements of this offering and is approved as to form, subject to modifications as determined appropriate by the City Council, and in the event that no other qualified proposals are timely submitted, the City intends to enter into the Agreement and sell the Hotel Property to Gatehouse on the terms proposed.

5. It is hereby determined that Gatehouse possesses the qualifications, financial resources and legal ability necessary to purchase and redevelop the Hotel Property in the manner proposed by this offering and in accordance with the Plan.

6. This action of the Council shall be considered to be and does hereby constitute notice to all concerned of the intention of this Council, in the event that no other qualified proposals are timely submitted, to accept the Agreement with Gatehouse for the sale and redevelopment of the Hotel Property, which Agreement is on file for public inspection at the office of the City Clerk, City Hall, 10 First Street NW, Mason City, Iowa 50401.

7. The City Clerk is authorized and directed to secure immediate publication of this Resolution in the Globe Gazette, a newspaper having general circulation in the community, by publication of the text of this Resolution.

8. Written proposals for the purchase of the Hotel Property must be received by the City Clerk at or before 12:00 P.M. (Noon) on July 19, 2019. Said proposals must be received in the City Clerk’s Office, located at City Hall, 10 First Street NW, Mason City, Iowa 50401. Each proposal will then be publicly opened by the Clerk or the Clerk’s designee at the hour of 1:00 P.M. in the City Clerk’s Office, City Hall, 10 First Street NW, Mason City, Iowa 50401, on that same date. The City Clerk, or the Clerk’s designee, is hereby authorized and directed to make a preliminary analysis of each such proposal for compliance with the minimum requirements established by this Council hereinabove and to advise the Council with respect thereto. Said proposals will then be presented to the City Council at 7:00 P.M. on July 23, 2019, at a public hearing to be held in the Council Chambers, City Hall, 10 First Street NW, Mason City, Iowa. The Council shall judge the strength of the proposals meeting the foregoing minimum requirements by the criteria set forth above and shall make the final evaluation and selection of a proposal.

9. The method for transfer of the Hotel Property as set forth herein is in substantial conformance with the provisions of Section 403.8(1) and (2), Code of Iowa, requiring “fair value” and “reasonable competitive bidding procedures.”

10. In the event another qualified proposal is timely submitted, another and further notice shall be published of the intent of the City of Mason City, Iowa to enter into the resulting contract, as required by law.

PASSED AND APPROVED this 18th day of June, 2019.

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20 Responses to Mason City and Gatehouse have development agreement ready for 95-room hotel; City council to consider at next meeting

  1. Avatar

    anonymous Reply Report comment

    August 27, 2019 at 12:34 pm

    It will be a good direction for Mason City. Just watch and see – all will work out well. The city will grow.

  2. Avatar

    Anonymous Reply Report comment

    June 17, 2019 at 1:59 pm

    It just a way of the city to get around the state requirement to show financing. The city knows that gatehouse would never get the bank finance, so let give them mc citizen tax money, because the city council think the citizens are stupid. and in the end it just what the rich and city offcials want and to hell with everyone.

  3. Avatar

    Anonymous Reply Report comment

    June 17, 2019 at 11:14 am

    what happened 4 days ago it was 100 rooms…. classic mason city. losers.

  4. Avatar

    Anonymous Reply Report comment

    June 16, 2019 at 7:23 am

    This project is the biggest farce ever perpetrated on Mason City.

  5. Avatar

    Anonymous Reply Report comment

    June 15, 2019 at 5:04 pm

    This needs a city-wide vote. Hold the board/mayor and city officials accountable.

    • Avatar

      Anonymous Reply Report comment

      June 16, 2019 at 12:28 am

      So you’re saying we need another vote besides the vote we already had for this project (which was OVERWHELMINGLY approved by voters)?!?!!

      This site finds the dumbest of the dumb in north Iowa.

      • Avatar

        Anonymous Reply Report comment

        June 16, 2019 at 11:14 pm

        The vote you refer to for this project which you claim was “OVERWHELMINGLY approved by voter” did not involve “a Grant to Gatehouse in an amount not to exceed $8,700,000” or providing” 80 consecutive quarterly Local Hotel Tax Rebates to Gatehouse equal in amount to 50% of the Local Hotel Tax generated by operations on the Hotel Property”.

        One of the ballot items concerning the River City Renaissance Project asked voters whether to approve a lease agreement to construct a ice arena/multipurpose center, with a total construction and lease cost not to exceed $18 million. The other item asked whether the city should issue urban renewal bonds for construction of The Music Man Square and hotel, skywalk and performing arts pavilion, not to exceed $14 million.

        • Avatar

          IowaBoy Reply Report comment

          June 17, 2019 at 12:12 am

          You’re right, I think about 1,200 people voted and around 800 voted FOR it. Wow! 800 people in control of millions in tax dollars…NOT a mandate!

        • Avatar

          Anonymous Reply Report comment

          June 17, 2019 at 7:14 am

          From day one, the new multi purpose arena was going to be partially funded by this new hotel which was always going to be receiving some sort of city incentives to encourage a developer to participate in the project. This was well advertised and all voters were aware of this. Voters OVERWHELMINGLY approved this project by a margin wider than that time Masson defeated Weaver for a city council seat. That’s what I call a mandate. Not everyone in this town is poor and minimally educated. Some of us are tired of seeing this town decay and slowly wither away, we want to see some city investment in quality of life initiatives.

      • Avatar

        Anonymous Reply Report comment

        June 17, 2019 at 11:22 am

        the problem being that the votes are not well announced to everyone in the city they take place at times that are not really workable for those of us with jobs and families and the whole thing kind of seems like alot of other crap in this town, set up. by design only certain people vote and they are the friends and family of our corrupt local government, man this site finds the dumbest of the dumb in north iowa. trust me if the actual majority knew when and where this shit wouldnt have gotten this far, i tal;k to different people from different walks of life throughout my day or week or month. cant find anyone who sees any of this downtown crap as beneficial. the streets are falling aprt all over town, we have no place for youth to go do anything that isnt jesus or sports oriented, we have crack houses and abandonded buildings that need attention or torn down we have a whole lot of other things going on, things intelligent people would deal with before building a giant hotel skywalk and event center nobody will use. those things generally come after youve improved cleaned out and built up a cities infrastructure. clean up the population by not letting section 8 landlords conduct business maybe try to take care of the detroit vs chicago gang war being fought in our streets and ignored by our cops? you know to stem the flow of powder drugs and make sure you dont have junkies sulking by your fancy empty hotel on their way to crash in your empty ugly apartment building you wanna build. mason city is a mess. it wont be where you want your kids within a decade and itll have a couple shiny new buildings in the heart of its ghetto. mason city is a sewer and its probably not gonna matter much longer cqause nobody wants to try to stop the bad and nobody seems to want to move with caution and common sense with all these dumb projects the city does not need. how about we fire the city engineer and hire one that can be bothered to take care of the traffic lights in town, instead of telling us we are lucky such an old system works as well as it does…. pos lazy mother*ucke*.

        • Avatar

          Anonymous Reply Report comment

          June 17, 2019 at 7:07 pm

          You sound like a real treat. I’m sure Arby’s is very lucky to have you busing their tables.

  6. Avatar

    Anonymous Reply Report comment

    June 15, 2019 at 5:02 pm

    This deal defines to a tee, the blind leading the blind.

  7. Avatar

    Anonymous Reply Report comment

    June 15, 2019 at 5:02 pm

    city giving away their shirt JUST to save face. This is the IRAN deal all over again.

  8. Avatar

    mint Reply Report comment

    June 15, 2019 at 8:10 am

    just another fantasy on stolen funds, the slaves need an “opt out” button, let the rich and who ever else who wants to play in they’re sand box pay for the fantasy another failure in the making, you can’t build wealth off stolen $

  9. Avatar

    mint Reply Report comment

    June 15, 2019 at 8:06 am

    the Renaissance era wasn’t a time to brag about or repeat, https://youtu.be/GOAVRcI6mFU

  10. Avatar

    Anonymous Reply Report comment

    June 15, 2019 at 2:46 am

    let me get this right, gatehouse if going to build a 10 million dollar hotel but the city is going to give them almost all or even more than that to do it. what a deal for taxpayers. don’t put the wallet away yet, there will be more

    • NIT Publisher

      NIT Publisher Reply Report comment

      June 15, 2019 at 8:11 pm

      Ya, but the state tax kickbacks. What a windfall. Thanks Lonnee.

  11. Avatar

    Anonymous Reply Report comment

    June 15, 2019 at 2:36 am

    Grant to Gatehouse in an amount not to exceed $8,700,000, under the terms
    provide 80 consecutive quarterly Local Hotel Tax Rebates to Gatehouse equal in amount to 50%
    based on investigation by the City, that the proposed sale price of the Hotel Property of $1.00

    More taxpayer money down the drain. id like to start a business just need the money, wonder how much the city will give me to do so.

    The mall owner came out smelling like a rose, now its gateways turn, who’s next, maybe me!!!!

    • Avatar

      Anonymous Reply Report comment

      June 16, 2019 at 11:24 am

      If you had a viable business plan that would bring significant employment to the area or if you had private investment that allowed the city to access State funds for quality of life initiatives, then yes, you would absolute get city assistance

      • Avatar

        Anonymous Reply Report comment

        June 17, 2019 at 11:26 am

        yea, we will see how they screw us out of the bushell boy deal. bet it wont take them long to demand to much or try to impose their own will to much and then clear lake or northwood will win out again and get a decent employer. remember when cerro gordo rejected the casino? cuz they are such a smart bunch of people lololololololol now we got rednecks sending their kids to college on full ride scholarships because worth has the money to do so and in mason every three graduates is on meth. if cerro gordo had accepted the casino our pd might have the resources to go ahead and start jailing and sending to prison anyone claiming to be a dboy or chicago gangsta thug wannabe………