Crowne Plaza hotel's value has plummeted, appraisal says

The Crowne Plaza Five Seasons Hotel in downtown Cedar Rapids is no jewel these days.

That's the conclusion of an appraisal report on the Crowne Plaza Five Seasons Hotel conducted by a Chicago hotel consultant for the city of Cedar Rapids.

The city has made a bid to buy the 275-room, 31-year-old hotel from its creditors, which purchased it in December 2009 in a sheriff's sale after foreclosing on the previous owner.

The appraisal firm, HVS Consulting and Valuation Services, Chicago, concludes that the “as is” market value of the hotel is $2.2 million, or $8,000 per guest room.

The previous owner, Kronos Hotels and Resorts, bought the hotel for $5.8 million in June 2007, according to the report. CWCapital LLC now owns it and has had the hotel, which is open and being managed by a hotel-management firm, on the sale block.

HVS says the nationwide economic downtown in recent years, which was not helped by local criticism of Kronos' management of the hotel, hurt the hotel's performance in the years following Kronos' purchase of the hotel. The report states that the hotel's occupany rate in 2007 was 65.7 percent, a rate which dropped to 48.1 percent in 2008 and 39.6 percent in 2009. Under new management, the hotel now is expected to see an occupancy rate of 45.7 percent in 2010, with the rate increasing to 51.2 percent in 2013 and 54.1 percent by 2015. By late 2012, the city's $67-million Event Center project, which will add a new convention center and upgrade the U.S. Cellular Center arena next to the hotel, will be complete, the report notes.

The report states that the hotel's guest rooms are in “fair to good” condition and that the hotel is confronted by some functional obsolescence and “significant” deferred maintenance.

“We assume substantial renovations, repairs and upgrades would be required” to retain the current Crowne Plaza branding or to upgrade the hotel to an “upper-upscale” designation like Marriott, the report states.