Plan to cover resort debt with conservation funds draws fire

While the federal government bails out financially troubled private businesses, the state is bailing out its own troubled enterprise at Honey Creek State Resort Park.

Intended as a self-sustaining facility, the state's only destination park will rely on taxpayers to make all or part of its debt payments for at least the next five years.

“Clearly, it is a bailout,” said Deborah Thornton, a research analyst at the Public Interest Institute in Mount Pleasant, which advocates for free enterprise and limited government.

Rather than putting taxpayers on the hook for an “upscale resort out in the boondocks, it would have been better to do something low-budget for campers, anglers and boaters - people who want to get away from it all,” Thornton said .

Larry Wilson, who served as director of the Department of Natural Resources from 1981 to 2002, said he has long suspected that taxpayers would have to foot the bill for a substantial part of the resort's debt.

Wilson and others have sharply criticized the DNR's plan to divert between $550,000 and $750,000 from the popular Resource Enhancement and Protection, or REAP, conservation program to make this year's $1.5 million payment on the

$33.5 million in bonds sold to finance part of the project's construction.

“Obviously, we would rather not have to take money from REAP,” DNR Director Rich Leopold said.

Nevertheless, paying debt expenses for a state park is a “perfectly appropriate” use of REAP funds, DNR Deputy Director Pat Boddy said.

The money, she said, will come from the

28 percent of REAP funds allocated to the DNR for open spaces acquisition and development.

Sold in 2006, the bonds paid most of the cost of the $58 million resort, which includes a lodge, water park, golf course, rental cabins and access to the 11,000-acre Rathbun Lake.

After cost overruns left the cabins unfunded, the Legislature appropriated $8 million in 2008 to build the 28 rental cottages, which were completed last year.

Wilson - who was replaced as DNR director by former Gov. Tom Vilsack, a leading proponent of Honey Creek - said the state needs to quit looking at the park as the DNR's baby.

The Legislature - which approved the sale of bonds for the park and subsequent supplemental appropriations - “needs to set aside money for bond payments and quit raiding REAP, the most popular and successful conservation program ever undertaken by the state,” Wilson said.

Wilson and Thornton said the state, in an effort to create jobs and stimulate tourism, stepped in where private investors feared to tread.

After the construction of Rathbun Lake in the 1960s, the state offered incentives for private investors to build a resort on the shore of the flood-control impoundment, Wilson said. Privately backed projects did not materialize, he said, because the south-central Iowa site is so remote.

Construction delays pushed back its opening until September 2008, just in time for the tourist off-season. Then the economy tanked, hurting the hospitality industry more than most.

Resort general manager Andy Woodrick, a 20-year veteran of the hospitality industry, said current economic conditions are the worst he's seen, with a full recovery unlikely before 2012. Still, he said, weekend and summer reservations at the lodge and cottages suggest a much improved 2010.

“Until the economy improves or until the state supports the shortfall in other ways, we are stuck using REAP dollars” to make the bond payments, which will peak at $2.2 million a year, the DNR's Boddy said.