116 3rd St SE
Cedar Rapids, Iowa 52401
The city of Cedar Rapids officially got into the hotel business on Monday when it closed on the sale of the downtown Five Seasons Hotel for a purchase price of $3.2 million, although it remains to be seen how long it will last.
The hotel, which opened in 1979, shut its door on Feb. 11, and will remain closed until late 2012 while it is undergoes renovation, the cost of which could reach $25 million, the city has said.
Mayor Ron Corbett - who said last week in his State of the City Address that the purchase took him “out of my comfort zone” - said last night that the city continues to look for private-sector partners to buy or help renovate the hotel.
“We're exploring every avenue that's available to us,” he said.
In recent weeks he's said the city has looked at ownership options that include a public-private partnership; the creation of a non-profit corporation to take on debt to renovate the hotel; or an outright sale to a local group of investors. The hotel once was owned by local investors, he noted.
Corbett said the city also is focusing on securing a new brand or flag for the hotel, which in recent years has carried the name Crowne Plaza Five Seasons Hotel. Sometimes the brand brings with it access to capital to make improvements, the mayor said.
Corbett emphasized that the city's purchase came because no one in the private sector was willing to buy the hotel from its creditors. Without the city's intervention, the hotel may have closed without any plans for renovation, he said.
“Something needed to be done,” he said.
The city decided to intervene as construction of the city's new Convention Complex, which consists of a new convention center and renovated U.S. Cellular Center arena, occurs around it.
The arena is slated to close in August and reopen with the hotel in late 2012 while the convention center opening will come in early 2013.
The total project also calls for a $10 million parking ramp across First Avenue East from the hotel and a skywalk connecting the hotel and Convention Complex to the new ramp and the rest of the city's skywalk system.
Demolition will start later this month to clear the way for the new convention center.
Craig Hanson, the city's public works maintenance manager, said the city now expects to permanently close the one-block Third Street NE between First and A avenues NE on March 21, the day that demolition is expected to begin.
Demolition crews will take down the hotel's ballroom above what is now Third Street NE, along with the parking garages and office buildings in the block between Second and Third streets NE and First and A avenues NE.
By August, only The Roosevelt, the former hotel and now an apartment complex, will be left standing in the block.