Honey Creek resort, relieved from debt, makes small profit

MORAVIA - Iowa's only state-owned resort made a small profit last year, as the state paid off debt for the facility.

Honey Creek Resort, near Moravia, brought in nearly $6.1 million in the year that ended June 30, spending $5.93, for an operating income of $163,930 for the year, according to an audit released Wednesday by the State Auditor's Office.

The resort on the shore of Lake Rathbun boasts a 105-room lodge, 28 cottages, restaurant, water park and 18-hole golf course.

Revenue for fiscal 2014 included $3.43 million from lodging, $1.8 million from restaurant and banquet operations and $697,600 from the golf course, the auditor reported.

The state financed $33.5 million of the $58 million project with bonds that had escalating payments through 2036. In past years, 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.

The DNR would like to develop a request for proposal in 2015 for a new management contract for Honey Creek, DNR Spokesman Kevin Baskins said. The resort is now run by Central Group Companies of St. Cloud, Minn. The new model might pay an operator a percentage of profits or require the firm to pay the state a flat fee to run the resort, Baskins said.

The state was not allowed to have a performance-based contract before the bond was paid.