Scenes from the City Council - Gimme Shelter

It was a very special episode of “City Council” last eve.

Big-hearted Cedar Rapids council members moved ahead with efforts to make sure that both the city's convention-goers and stray pets will have comfy publicly-owned accommodations, although both types of wayward guests can be hard on new carpets.

The council approved using $3.5 million in local sales taxes and $1 million from FEMA to build a new animal shelter on the Kirkwood campus, replacing the old flood-damaged facility. Kirkwood is providing the land in exchange for a 900 square-foot classroom at the shelter to make room for programs for veterinary students.

Before that, members heard the terms of an approaching deal with Doubletree by Hilton to slap its good name on a refurbished downtown hotel and manage both the hotel and new, attached $75 million convention complex.

Sheltering strays requires lots of kindness and kibble, but fewer lawyers.

John Frew, whose Frew Nations Group, is overseeing the big convention complex project for the city, walked the council through the complicated terms of a hotel franchise and management deal. Hilton will put its Doubletree brand on the hotel for 15 years while managing it and the convention complex for 10 years, with an option for five more.

While it manages the facilities, Hilton will waive its annual $500,000 franchise fee, saving the city $5 million.

Hilton gets a 3 percent bite of gross revenues annually as a management fee, an "industry standard,' Frew said. Then comes what's called the "waterfall." The city then gets an annual “preference payment” from net revenues equal to 8 percent of its approximately $30 million investment in the hotel. The rest of the revenue gets split 85 percent city, 15 percent Hilton, giving the company an incentive to hold down costs and jack up revenues to boost the size of its share.

Mayor Pro Tem Monica Vernon said the "waterfall frees everybody to go after their own cheese." I'll take her word for it.

The city can sell the hotel, but not for five years. So that settles it. The city is in the hotel business for at least a half-decade. Sort of makes a taxpayer's palms sweat.

And if the city moves to sell after that, Hilton gets the first chance to make an offer.

The city must approve Hilton's annual operating budget, its spending plans for repair and maintenance and any expenditure over $25,000. The city would also have to sign off on major hires.

Hilton also will be in charge of marketing the hotel and plex, although Frew said it will likely hire another firm to handle arena bookings and operations. What the whole shootin' works will be named is unsettled. Doubletree wants its brand all over it, but U.S. Cellular still gets a crack at keeping its name on the arena. The city is counting on bucks from multiple naming deals. Stay tuned.

The council sniffed over the details. Tails wagged.

“We wouldn't be where we're at without Frew Nations,” gushed Council member Don Karr, who tossed one of several rhetorical roses from pleased council members. “I think it's above and beyond what we expected.”

“This is a three-legged stool here, and this is a key component,” said Pat Shey, stealing one of the mayor's favorite metaphors.

"I think, like all of us, this is a big deal," Vernon said.

Council member Kris Gullick pressed pause on the admiration for a moment to ask if Hilton could turn around and sublet its responsibilities to some other company. Not without council approval, was the answer.

The council could be voting on final contracts as soon as early October, Frew said.

Probably the best news in all this is that the city has managed to land a proven, successful company with a long track record to guide the riskiest municipal venture in memory. This grand gamble only pays off if people and events come, and Hilton has experience making that happen. It's a positive sign on a long road.

"These are the pros from Dover," Frew said Wednesday. “They didn't get in to fail."

That's good to know, since failure with so much at stake would leave taxpayers snarling and more than ready to bite. And it's the elected officials that will be seeking shelter.