Hotel important to project success

By The Gazette Editorial

A lot of hope and expectations are riding on the city of Cedar Rapids' $67 million Event Center project.

“It's got to be the showpiece of downtown,” as this community continues its rebuilding and revitalization efforts, interim City Manager Allan Thoms told us recently.

“This facility can put us back near the head of the arena arms race,” Project Manager John Frew said, referring to competition from newer facilities in the region.

And if you agree with them, then it follows that the adjacent Crowne Plaza Hotel must complement the Event Center project, which will update the city's U.S. Cellular Center and build a convention center next door.

We agree that maximizing potential for success - and the ripple economic benefits for the downtown - won't happen unless all three components are included.

The biggest challenge is the hotel. It's been for sale since December. Private-sector interest has lagged, in part because they are leery of city ownership of the land, air rights and ballroom. It also needs renovation to regain upscale status.

A city-hired consultant assessed the hotel at $2.2 million - the current owner, Kronos, bought it for $5.8 million a year before the 2008 flood. Last week, the city offered $1.5 million. City officials want to buy it at a bargain price, oversee its renovation, hire a management firm

to operate it and eventually

sell it.

Even if the city gets a good deal on the hotel, challenges and risks loom. Where will the money for renovation come from, especially now that a once-anticipated FEMA windfall is unlikely? What's the local taxpayer risk, especially if the hotel doesn't succeed and can't be sold for at least a break-even price?

Nonetheless, we believe that city ownership of the hotel is important to success of the Event Center project and downtown. So does the federal Economic Development Administration, which approved a $35 million grant for the Event Center. The state is kicking in $15 million, and the city will cover $17 million, through bonding.

Frew said the hotel's success will depend more on the convention center's draw. He expects a “dramatic” new look for the arena and says the hotel needs the same.

His assessment carries weight. Frew has extensive experience and success in complex real estate development projects nationwide.

Among his challenges here is to see completion of the Event Center while minimizing “dark (closed) time” when the arena can't be booked. Getting the hotel on board within a similar timeline is vital. Putting all the pieces together will be a big test for Frew and city leaders.