City’s hotel/convention center plan has potential

By R Lee Belfield

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Recently, I read Moody's report on the creditworthiness of our city. No doubt, my reaction was fairly typical. I'm relieved that our City Council and administration have somehow succeeded in maintaining our top Aaa rating despite the significant challenges our community has faced in recent years.

At the same time, I'm also concerned over the “negative outlook” for Cedar Rapids, based on investing in the hotel and convention center. While I'm not an accountant, let alone Moody's, I do have a perspective I'd like to share.

Some will recall that The Five Seasons Hotel was operated briefly in 1996-1997 by Wyndham Hotels. The majority owner asked Wyndham to prepare the property for sale. I had the privilege of being the general manager through the conversion to a Wyndham up until the hotel was successfully sold.

One of the comments I hear is that this hotel “has never made money.” That's not so. While I cannot speak for profit other than that from operations, I can tell you that The Wyndham Five Seasons Hotel generated positive gross operating profit. Although this begs the question whether our new venture will generate sufficient such profit to retire the debt, given the product we had to sell 15 years ago versus the product we're creating today, I submit the previous performance is encouraging.

Beyond that, as a member of the hospitality industry here in Cedar Rapids (including downtown), I'm someone who is obliged to follow industry trends. Looking at the pipeline of new hotel construction, now is an ideal time to be building a hotel.

While none can predict with certainty the economy in the next few years, when measured against historical patterns, our facility will go online with near-perfect timing. It could very well hit the market just as demand is really rising.

If this proves to be true, the additional rooms in total Cedar Rapids sleeping-room inventory will have the effect of making our city more attractive to outside visitors. With the new convention center, this will be especially true for large groups. This will be good for the entire local hotel industry and the hotel/motel tax it generates.

Additionally, Doubletree strikes me as an excellent fit for the amount of meeting space and the market it will attract. Given the strength of the Hilton Doubletree brand, it's reasonable to expect the hotel will generate revenues at least similar to the conservative projections reflected in Moody's report.

Given the Hilton Doubletree reputation as an operator, it's similarly reasonable to expect the operation to be efficiently run.

The remaining controllable threat is parking, and this issue may require more attention.

As a fellow citizen, I'm convinced that the health of our city is directly proportional to the health of our downtown. I've witnessed this personally in each of the cities across the country where I've worked. The hotel and convention complex is key, but it is only a part of downtown renewal.

Most of us know the list of post-flood construction projects. We've already begun to enjoy some the venues of which we all are proud. If all we realize is the sum of the parts, it's not hard to predict a bright future. Once again, the timing seems right.

Others disagree, but I believe the City Council made a tough decision that had to be made. To do otherwise would have been tantamount to abandoning our downtown and would have led to the negative effects of such a decision that I've witnessed elsewhere.

This was a bold but correct move, and there are reasons to be confident in the outcome!

R Lee Belfield is general manager of The Hotel at Kirkwood Center in Cedar Rapids. Comments: Lee.Belfield@kirkwood.edu