Construction underway on Holiday Inn Express and Suites, Marion’s fourth hotel

MARION — The future operator of a new Holiday Inn Express and Suites being built in east Marion on the site of the city’s first large-scale mixed-use development anticipates opening doors to guests by the end of the year.

Cora Lahr, chief operating officer for Omaha-based Hart Family Hotels — the future hotel operator that currently manages six Iowa hotels — said Monday that construction started late last fall at East Town Crossing, formerly named Squaw Creek Crossing, located at Highways 13 and 151. It will be Marion’s fourth hotel.

“We’re grateful for the project because it helps to meet a big need in our city,” Mayor Nick AbouAssaly said in a statement. “Experts have told us that a city the size of Marion can support several more hotels. As our city grows and becomes more of a destination, especially with the developing sports tourism, we need additional hotel space to accommodate visitors and provide them with the opportunity to stay right here in Marion.”

East Town Crossing, which began development in 2017, contains more than 20 acres including retail, commercial, hospitality and residential projects. The development already hosts businesses including Kwik Star, Dupaco Credit Union, Pancheros, Jersey Mike’s Subs, Pizza Ranch, the MAC, Scooter’s Coffee and a Daisy’s Garage restaurant. Some multifamily rentals already are online, with more proposed in a third building.

Hotel will be Marion’s fourth

Lahr said crews are framing the hotel’s fourth floor as much of the exterior is up. She said crews soon will start on stone work outside, and part of the parking lot is poured. Plumbing and electrical work is taking place throughout the property, windows will be installed this week and the roof likely will be added in the next few weeks.

Once complete, the 93-unit hotel will offer a variety of room type with 55-inch TVs and amenities including a swimming pool, fitness room and breakfast.

Hart Family Hotels owner Troy Hart said the hotel’s development is being fueled by overnight guests being drawn by the Prospect Meadows Sports Complex nearby, the East Town Crossing development offering an array of amenities, and the proximity to highways at that location.

“We’re super excited to get open and serve Marion and the guests,” Hart said.

With only three other hotels in Marion, Hart said his company felt Marion was underdeveloped in hotels as most demand goes to northern Cedar Rapids. Several hotels are located on Collins Road NE in Cedar Rapids.

Marion’s other hotels are TownePlace Suites by Marriott and Marion Motel, both on Seventh Avenue, and Microtel Inn & Suites by Wyndham Marion/Cedar Rapids on Dyer Avenue.

A city with Marion’s population typically would have seven to 10 hotels, but it’s “easier for developers to choose Cedar Rapids,” Hart said. His company hopes to potentially build another hotel in Marion in the coming years.

Hotel spurring interest in remaining lots

Last week, Marion Finance Director Lianne Cairy said with the hotel under construction, the overall site’s developer East Town Crossing Inc. brought forth a request to assign a development agreement for the hotel site to Hart Family Hotels. The City Council approved that Thursday.

This comes after the city last year changed its agreement with the developer of East Town Crossing to split one agreement into three, including a separate agreement with the hotel developer.

In 2019, hotel construction was estimated at $11 million, but when the developer applied for public incentives, costs spiked to $17.5 million. With business travel down through 2022 as a result of the pandemic, council documents stated the “short-term reduction in revenue has great impact on our ability to attract qualified equity investors.”

The modified agreement, approved last April by the Marion City Council, removed the hotel lot and three lots with no projects identified. Those unbuilt lots were placed under a memorandum of understanding for possible future action as project plans firm up.

It also extended the new agreement to a maximum of 20 years at a 50 percent tax increment financing rebate if the hotel is built. Marion reduced its incentives from $9.6 million to $7.5 million based on updated estimates for the development.

The new agreement specifically for the hotel, with developer BraveHart Development in partnership with Hart Family Hotels, provided a five-year tax incentive for 90 percent of the increased value the project generates, and another five years at 50 percent — at most a value of $1.5 million.

Under the third agreement for the unbuilt lots at East Town Crossing, terms include a 12-year sliding scale incentive with a maximum incentive of $2.1 million.

Mike Esker, associate real estate broker with Coldwell Banker Hedges, said the recent focus has been on hotel construction. There are no specific plans yet for those unbuilt lots, he said, but “the activity out there has attracted more attention and interest.”

Those lots include a corner lot next to Dupaco, land next to Daisy’s Garage and a lot in front of the hotel.

“There are interested parties and groups that have reached out to us that we are discussing the remaining lots with,” Esker said.

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