Council to vote on hotel accords

CEDAR RAPIDS - The proposal that has emerged between City Hall and Hilton Worldwide Inc. will have Hilton manage the city's downtown hotel for 10 years with an option for five additional years and will allow the city to use the DoubleTree by Hilton name on the facility for 15 years.

The hotel is attached to the city's U.S. Cellular Center arena and is next door to the city's coming new convention center. Hilton Worldwide proposes to call it the DoubleTree by Hilton Hotel and Convention Center, according to a City Council memorandum.

The council will vote at its meeting Tuesday on authorizing the city manager to complete negotiations on the franchise and management agreements with Hilton, which have been in the works for two months.

Mayor Ron Corbett said the City Council has found a quality management company that is willing to make a long-term commitment to Cedar Rapids.

“They're willing to sign a 15-year deal with us,” the mayor said. “It's been one of the challenges of the hotel. It has had multiple owners and multiple management companies. This is going to provide some stability. And that's a good thing.”

Corbett said the proposed management agreement with Hilton gives the city the ability to sell the hotel, which had been the privately owned Crowne Plaza Five Seasons Hotel, after five years and gives Hilton the right to buy it at the price someone else is willing to pay for it.

The city purchased the rundown 32-year-old hotel from its creditors earlier this year. Corbett said the city has made clear since then that it has no interest in owning the hotel forever.

“This is an asset, and we're trying to fix this asset up. And at some time in the future, at least the current City Council, doesn't see holding on to this asset long-term,” Corbett said.

The hotel and the arena are closed for renovation as construction is starting on the new convention center next door. The hotel and arena are slated to reopen in the fall of 2012 with the convention center opening expected in early 2013.

The city paid $3.2 million for the hotel and the renovation is expected to cost more than $20 million.

A first piece of the hotel renovation involves the upgrade of the hotel's exterior. The city's project manager, Frew Nations Group, is recommending that the council approve a contract with Miron Construction Co., which has an office in Cedar Rapids, for that work.

Miron submitted the lowest of three bids for the exterior work, though the firm's base bid of $4.175 million is 12.8 percent higher than the project manager's pre-bid estimate of $3.7 million.

Frew Nations Group is recommending that the council also approve two project add-ons that bring the contract for Miron to $4.465 million.

In a memorandum to the council, Frew Nations Group said that total is $240,626 - or 5.7 percent - higher than its pre-bid estimate, which was $4.225 million for the base bid plus the two add-ons.