When The Gazette posted to Facebook its story about Honey Creek Resort, Iowa’s only state-owned resort, struggling to lure visitors, more than 40 people commented and asked questions.
We decided to pose some of those questions (and a few others) to the Iowa Department of Natural Resources and Delaware North Companies Parks & Resorts, a Buffalo, N.Y.-company hired in 2016 to manage the southern Iowa resort opened in 2008. Below are the answers.
Statements in quotes came from DNR and Delaware North, while The Gazette added additional answers not in quotes.
1. Mark Tiedemann: Why does the state own this?
“The Iowa Legislature, under Governor Tom Vilsack, used vision Iowa funds and bonds to fund the development of a destination resort on Lake Rathbun. See Iowa Code Section 463C for further details.”
2. Has the state ever considered selling it?
“There is a restriction on selling the property because it is situated on federal property owned by the Army Corps of Engineers.” Iowa Sen. Mark Chelgren, R-Ottumwa, proposed selling the resort in 2011, but other lawmakers have supported the state’s ownership of the resort.
3. Janet Kesl Vorwald: The only time I ever hear of this place is once a year around this time when it hits the news that it’s not making money. How much of our tax payers money are we paying this company to supposedly run it?
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The state financed $33.5 million of the $58 million project with bonds that had escalating payments through 2036. Before fiscal 2014, the resort’s income was not enough to make debt payments, and the Iowa Department of Natural Resources (DNR) used statewide conservation funds to cover the shortfalls.
During fiscal 2014, the state paid off nearly $32 million left on the revenue bonds.
Under the new contract with Delaware North, Iowa pays for some deferred maintenance, but is not on the hook if the resort fails to meet budget expectations.
Under a 15-year contract signed in March 2016, Delaware North is required to pay Iowa 7 percent of gross monthly receipts. Using the gross annual revenue number provided in the report, the share provided to the DNR would be about $436,000. If the resort’s annual gross receipts exceed $7 million, Delaware North will pay the state an extra .5 percent, and if gross receipts surpass $8 million, an extra five percent will be paid to the state.
4. Cody Meyer: I’m planning a trip there, but I had to search for quite a while to find out it existed. Their marketing definitely needs work.
“Last year, most regional awareness marketing efforts focused on creating awareness in the Des Moines area, as well as expanding internet advertising; for example, using behavior networks that target ads to potential travelers with a high propensity to travel in Iowa.”
5. Do you have any market analysis about the costs of staying at Honey Creek versus other resorts?
“Yes, but because of the size of our cottages, some with four bedrooms it’s hard to compare our overall prices. The average price of our lodge rooms was lower than the average of our competitor’s last year.”
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6. Mary Spangler: It seems very expensive for common people!
“This time of year, we offer affordable prices for lodge rooms, especially for anyone who can travel midweek. Now through March 31, you can book two nights in a cottage and get a third night free. On select nights through spring, rooms rates can be found for as low as $89 per night. Throughout the year we offer many specials, and anyone interested can sign up on our website to receive emails regarding the specials that we run throughout the year as well as property updates. https://www.honeycreekresort.com/signup.”
7. How many weddings did Honey Creek host in 2017?
“Honey Creek hosted 35 weddings in 2017. For 2018, we are adding a new gazebo overlooking the lake that will be a perfect scenic spot for couples to get married.”
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