State claims Honey Creek Resort injunction isn’t in the public interest

The State of Iowa is contesting an injunction issued in a lawsuit brought by the former operator of the state-owned Honey Creek Resort in southern Iowa.

The lawsuit, filed last month in Polk County District Court by Achieva Enterprises, alleges state officials have misled the public into believing the company acted negligently and withdrew from the financially troubled Honey Creek Resort.

Achieva, which was hired by the state several years ago to operate and revitalize the resort at Rathbun Lake, is suing the Iowa Department of Administrative Services and Iowa Department of Natural Resources for the “abrupt and unlawful termination” of its concessionaire agreement with the state.

According to the lawsuit, DAS terminated its contract with Achieva without notice and in direct violation of the contract’s terms. “DAS then took extreme and disruptive actions, including shutting down the resort, firing over 50 employees, evicting guests, confiscating personal property, and making public statements that damaged Achieva’s reputation and business relationships,” Achieva alleges in its lawsuit.

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The DNR, as the legal owner of Honey Creek Resort, “actively participated in the termination and transition process,” the lawsuit claims, adding that the two state agencies’ actions have “caused irreparable damage to Achieva’s business, reputation, and property interests” and now “threatens the continued viability of Honey Creek Resort as a public asset.”

Last month, a judge approved portions of Achieva’s request for an “interim temporary injunction” in the case, pending a hearing on the matter. The injunction temporarily bars the state from either reopening the Honey Creek Resort to the public or hiring a new third-party operator to manage the resort while the lawsuit moves forward in court.

The Iowa Attorney General’s Office has declined to comment on Achieva’s allegations, but has filed a brief with the court arguing an injunction will unduly burden operations at the resort and be against the public interest.

The state says it terminated the contract with Achieva because the company failed to live up its contractual obligations “for significant lengths of time.”

In its brief to the court, the state also notes that the contract specifically allowed DAS to immediately terminate the two parties’ relationship, without any advance notice to Achieva, in the event that the company ended or suspended its business. According to the state, Achieva’s president, Beth Henderson, “directly indicated to DAS that (the company) would do exactly that on October 21, 2025.”

In addition, the state claims, Achieva failed to comply with the contract’s requirements to obtain and maintain insurance, exposing the state to increased liability, and also failed to provide periodic reports of its financial and operational activities.

The state further alleges that an injunction forcing the state to further pause its efforts to hire a new resort operator will result in further damage to “the resort’s operations and viability as an ongoing venue for Iowans to enjoy the state’s natural beauty.”

A court hearing on the temporary-injunction issue was held Nov. 24, but the two parties did not have time to present their closing arguments before the hearing concluded. A second hearing for that purpose is scheduled for Dec. 17, 2025.

Achieva alleges a ‘smear’ campaign by the state

The $60 million Honey Creek Resort opened to the public in 2008, offering a 106-room lodge, 28 cabins, an indoor waterpark, an 18-hole golf course and a marina. The resort struggled financially, and in 2013, the Iowa Legislature authorized a $33 million bailout to pay off the resort’s outstanding bonds.

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In 2016, the DNR entered into a management contract with Delaware North Companies, a private hospitality firm. Under that agreement, Delaware North was to pay the state a portion of profits generated by the resort once annual revenue exceeded $7 million.

Over the next five years, annual revenues never reached the $7 million threshold, and in early 2022, Delaware North exercised an option to terminate its contract with the state. Achieva was then hired by the state to run Honey Creek. In its lawsuit, the company claims it “inherited a resort in disrepair — physically, financially, and reputationally.”

According to the lawsuit, the resort generated significant sales tax revenue for Iowa but operated on “razor-thin” profit margins. In late 2024, Achieva and DAS entered into a contractual amendment to provide the company with some temporary financial relief as the company worked to improve its operating margins.

That amendment temporarily waived Achieva’s obligation to deposit 5 percent of its gross monthly receipts into a state-created fund, enabling Achieva to use that money for operating expenses such as audits and insurance premiums.

In April 2025, following DAS’ failed attempt to give the resort to Appanoose County, DAS “abruptly ceased communication with Achieva,” the lawsuit alleges.

On Oct. 29, 2025, without warning, DAS sent a contract-termination letter to Achieva and then “took extreme and punitive actions” — shutting down the resort, barricading its entrances, and sending home “over 50 employees without notice, destroying livelihoods,” all while falsely claiming Achieva had abandoned the property, the lawsuit alleges.

The lawsuit claims that DAS then launched “a coordinated publicity and outreach campaign to smear Achieva,” issuing press releases and social media posts falsely portraying “Achieva as negligent and unfit” to run the resort.

The lawsuit alleges breach of contract and seeks a judgment declaring that various items Achieva purchased with its own funds — buildings, equipment, vehicles, and taxidermy — should remain with Achieva.

This article was first published by Iowa Capital Dispatch.