Cedar Rapids council pulls plug on two Iowa firms picked just a month ago to manage Convention Complex and hotel

CEDAR RAPIDS - It wasn't even close.

The City Council Tuesday night sided with John Frew, its consultant on the city's Convention Complex and hotel projects, and City Manager Jeff Pomeranz and agreed Tuesday night to end negotiations with two Iowa firms that the council enthusiastically picked just a month ago to manage the complex and hotel.

In recent days, the two firms, Kinseth Hospitality Cos. of North Liberty and VenuWorks of Ames, had written directly to the City Council asking to sit down with council members to try to remedy the impasse in the contract negotiations between the firms and Frew.

Instead, the council, on an 8-0 vote last night, told Pomeranz and Frew to seek a new round of proposals from firms specializing in the management of entertainment venues and hotels.

City Council member Chuck Swore said he personally visited with representatives from both Kinseth and VenuWorks and “stressed to them” that the council had hired Frew's firm, Frew Nations Group, “to guide us through this process.”

“John Frew is point person and that's who you need to satisfy,” Swore said he told Kinseth and VenuWorks.

Even so, Swore said the council had been “excited” just last month when it felt it would contract with the two Iowa firms to run the convention center, arena and hotel.

“I feel very, very bad that we couldn't accomplish that,” Swore said.

Kinseth, with a specialty in hotels, and VenuWorks, with one in entertainment venues, had joined forces as Cedar Rapids Management Associates LLC after the City Council selected them over another entity just on April 12.

Frew on Monday said the negotiations fell apart over what he called an “essential ingredient” of the city's management contract. The city, he said, wanted the management entity to provide one, “seamless, unified management” arrangement to run all three parts of the contract, the convention center, arena and hotel. For years, the arena and hotel have had separate general managers, “who were not in sync, they battled, and in the end, nobody won,” Frew said.

Bruce Kinseth, executive vice president of Kinseth Hospitality Cos., on Monday expressed disbelief that negotiations with Frew had fallen apart before Kinseth said they really had begun to get started.

“All of a sudden, it's just gone,” Kinseth said. “ … So we're beyond disappointed.”

VenuWorks of Ames currently manages the city's U.S. Cellular Center arena as well as the city's Paramount Theatre and Ice Arena. The arena contract will end as the city signs a new management contract for the arena, convention center and hotel.