Council votes 6-1 to try to buy Crowne Plaza with plans to fix it up as part of Event Center project

CEDAR RAPIDS - On a 6-1 vote, the City Council last night agreed to make a bid to buy the city's only downtown hotel, the Crowne Plaza Five Seasons Hotel, which a creditor is now stuck with following a bankruptcy and subsequent sheriff's sale in December.

Mayor Ron Corbett, who pushed for the city's purchase of the hotel last week, said last night that a hotel consultant hired by the city in January has concluded that the hotel is worth $2.2 million. Corbett has suggested that the city will offer less for the hotel -- which will continue to be operated by a management firm if the city buys it -- because of flood-related work that has yet to be done at the site.

Council members Chuck Wieneke cast the lone no vote against the purchase because he said the council advocates for the hotel purchase know the city will need to spend considerably more than the purchase price to refurbish the hotel, but nobody knows how much more, Wieneke said.

How much is it going to cost to upgrade the hotel so the city can convince a private investor to buy it in the future? Wieneke asked.

Council members Chuck Swore and Tom Podzimek both argued that now was the opportune time to buy the 31-year-old, 275-room, 16-story hotel as the city embarks on a $67-million Event Center project around the hotel. The city has secured a $35-million federal grant and a $15-million state I-JOBS grant to pay the majority of the Event Center project cost.

Podzimek said construction efficiencies will make it less costly to refurbish the hotel because contractors will be at the site to work on building a new, two-story convention center on what is now Third Street NE next to the hotel and on upgrading the U.S. Cellular Center arena, which is already joined at the hip with the hotel.

Swore said the city does not want to be in the hotel business long term, but he said that doesn't mean that the city shouldn't invest in the hotel, which he called “a critical part of the (Event Center) complex that is the center of our community,” he said.

Podzimek said the hotel will be worth considerably more once the Event Center project is complete, which should be in December 2012, said John Frew, the city's consultant on the Event Center project.

Corbett has said the city will use revenue from the hotel-motel tax over time to pay the city's $17 million piece of the Event Center project, and he has suggested using about $3 million from an insurance settlement from a 2009 fire at the city-owned Sinclair plant to buy the hotel. Where money to refurbish the hotel will come from is still to be identified.

Frew - a partner in event-center consulting firm Frew Nations Group and, until April, Gov. Chet Culver's chief of staff - told the council last night that the hotel now is an unattractive investment for a private buyer because it comes with entangled agreements over air rights, parking, use of the ballroom and other matters.

Podzimek said it made sense for the city to purchase the hotel now if for no other reason than to clean up “administrative mistakes” that seemed like they made sense back in 1979 when the hotel and U.S. Cellular Center Center were built and opened.

Frew said incorporating the hotel into the arena and convention center planning, design and construction will make changes so the hotel doesn't have to depend on the arena's loading dock and the arena and convention center don't have to depend on the hotel's kitchen. Should the hotel have to use the arena's steam system? Frew wondered.

Podzimek asked Frew how he was going to make sure he understood just where the Event Center fit into the marketplace, and Frew said VenuWorks of Ames, Iowa, the city's current manager of the city's entertainment venues, and the city's Five Seasons Facilities Commission are studying that question. Frew then said his firm will “chew” over the study's results.

Council member Monica Vernon said putting the city in position to oversee the upgrade of the hotel would make sure the Event Center complex did not turn out to be “half-baked.”

Frew said the city put out a request nationwide on Tuesday to architects to present their qualifications to work on the Event Center project.

Frew said the upgrade at the arena needed to include nicer facilities for stars performing at the arena, and he showed a photograph of cafeteria-style table and chairs at the U.S. Cellular Center that are now used by acts performing at the arena. The likes of country pop singer Taylor Swift won't come back to town after sitting there, he said.

Frew also said he will work to change out the orange seats in the arena. He said he'll put them on sale if he succeeds in replacing them.