Iowa audit: Honey Creek resort's financial struggle continues
But resort near Rathbun exceeding last year's performance
Iowa’s only state-run resort failed to meet financial targets last year, but by a smaller margin than past years.
Honey Creek Resort, a $58 million state-owned facility in southern Iowa, had $5.91 million in operating revenue for the year that ended June 30 and $5.72 million in expenses, according to an audit released Thursday by the State Auditor.
The resort's revenue fell $549,766 short of its budgeted revenue of $6.4 million, which was better than fiscal 2011 when Honey Creek missed its goals by nearly $645,071.
“We’re falling short of our goals, but we’re still exceeding last year,” said Chuck Corell, administrator of the Iowa Department of Natural Resources Conservation and Recreation Division.
Honey Creek, which opened in September 2008 on Lake Rathbun, boasts a 105-room lodge, 28 cottages, fine-dining restaurant, water park and 18-hole golf course. The state financed most of the project with $33.5 million in bonds, which have escalating payments through 2036.
Revenue for fiscal 2012 did not cover bond payments and management fees for the resort, which caused the DNR to shift nearly $1.3 million from statewide conservation efforts to Honey Creek. More than $4.9 million in Resource Enhancement and Protection (REAP) funds have gone to Honey Creek since the resort opened.
In recent years, the DNR has asked Iowa Gov. Terry Branstad to budget money to pay off the bonds, which would allow the DNR to stop dipping into conservation funds intended for projects in all 99 counties.
“It would further that mission (conservation) if we had that money to spend on REAP projects rather than bond payments,” Corell said.
The DNR again has requested Branstad put additional funding in his proposed budget for fiscal 2014, which will likely be announced in January.
Honey Creek's fiscal 2012 revenue included $3.15 million from lodging, $1.93 million from restaurant and banquet operations and $645,300 from golf course operations, the audit showed.
Honey Creek is trying to recruit new customers, particularly corporate clients who can use the resort during the week, Corell said. The resort hosted 55 weddings in fiscal 2012, which averages more than one wedding per weekend.
An evening “Undeadathon” in October brought in about 100 runners dressed as zombies and “heroes” who used flashlights to find zombies on Honey Creek’s wooded trails.
Honey Creek finished the year ahead of competitor resorts, according to Smith Travel Research numbers released by the DNR.“As the recession eases more and more nationally, maybe now we can see more businesses spending money on conferences,” Corell said.