Corbett says insurance settlement from 2009 Sinclair fire can buy the Crowne Plaza

CEDAR RAPIDS - Happenstance will buy the city a hotel if Mayor Ron Corbett gets his way.

A day after announcing that the city would bid to buy and refurbish the long-struggling downtown Crowne Plaza Five Seasons Hotel, Corbett on Friday said he will ask the City Council to make the purchase with the more than $3 million now sitting in a City Hall account from an insurance payout stemming from a 2009 fire at the city-owned, former Sinclair meatpacking plant.

The fire-insurance payout should be enough or more than enough to buy the hotel if the city gets its way on the deal.

It turns out that the former Sinclair plant shares something of a kinship with the Crowne Plaza Five Seasons Hotel. Both ended up in bankruptcy court. After that, both ended up in a buyer's hands for little or nothing. And now both may end up being purchased by the city.

At Thursday's news conference announcing the city's intent to buy the hotel, council member Chuck Swore made note that the City Council took some public ribbing when it spent $2 million - the Hall-Perrine Foundation also donated $2 million - to buy the Sinclair eyesore just south of downtown in early 2007, a purchase which now has the city smiling all the way to the bank.

Of course, the council never foresaw that the Sinclair plant would be hit both by fire and flood, which now has sent the $3.5-million insurance payment the city's way and which will give the city another $18 million more in federal disaster money because the Sinclair plant, of little use at the time of the flood, can't be used again. Federal disaster dollars also are paying to demolish the place.

Corbett on Friday said some of the $18 million that the city gets because it can't reuse the Sinclair plant could potentially be used to help renovate the hotel if the city succeeds in buying it.

The mayor said he was confident that the city could purchase and renovate the 275-room hotel without “saddling” local taxpayers with an additional tax burden.

The Crowne Plaza, the downtown's only hotel, is now owned by CWCapital Asset Management, the creditor who bought it at a sheriff's sale in December 2009.

The sale of the hotel is being handled by the Chicago office of real estate firm, Jones Lang LaSalle, and a picture of the hotel is on the firm's Web page.

City officials have said the firm has tried to sell the hotel without luck. A unique set of agreements with the city on air rights, parking, a ballroom and other issues make the property hard to sell, city officials have added.

Corbett, council members Swore and Justin Shields and city consultant John Frew on Thursday said it makes sense for the city to buy the hotel now and refurbish it because it sits in the midst of the city's $67-million Event Center project, which will upgrade the U.S. Cellular Center arena and add a convention center beside it on what is now Third Street NE.

On Friday, Corbett said city leaders for years have been lamenting and at the same time ignoring the decline of the downtown hotel, which he emphasized is linked like “Siamese twins” to the arena and coming convention center.

“Everybody keeps kicking the can down the road, hoping that somebody else in the future will take care of it,” he said. “It would be a shame to kick it another three or four years. Now is the time to address the issue. And I think we can do it without raising taxes on the citizens.”

“I'm not afraid to go out and discuss and debate this issue with people,” Corbett continued. He and council members will be at the Hy-Vee Food Store on Wilson Avenue SW from 8 to 10 this morning, he pointed out.

“If I can't get the general public's support for this, then council's support may wane,” he said. “So I'm going to take this on. This is what mayors are supposed to do.

“I can cut some ribbons and do some things like that. But in the end, citizens want results and they want their community moving forward. When all is said and done, 30 to 34 months from now, when the projects are complete, people will be proud to drive by this facility on First Avenue and on Interstate 380.”