Downtown's Crowne Plaza Five Seasons Hotel no jewel right now, says consultant; city has bid to buy the place

CEDAR RAPIDS - The glory days of the city's only remaining downtown hotel may have passed for good unless a new owner - whether its the city or a private firm - substantially reinvests in the facility and secures new deals with the city on parking and meeting-room space.

For now, the 31-year-old Crowne Plaza Five Seasons Hotel is no jewel, a Chicago hotel appraisal consultant says in its report for the city of Cedar Rapids.

The report, by HVS Consulting and Valuation Services, Chicago, defines the hotel's 275 guest rooms as in “fair to good” condition and it states that the hotel is confronted by some functional obsolescence and “significant” deferred maintenance.

Overall, the hotel offers a “reasonably functional layout” and its size and location are “strengths,” the HVS report states. However, “significant weaknesses” include a poorly designed entrance, inconsistencies in quality, a dated exterior and no on-site parking and no grand ballroom inside the hotel.

The report says the hotel's concrete and glass exterior is only in “fair condition,” and it notes that “significant leaking” has occurred on certain floors due to inadequate window sealing.

The guest rooms need new TVs, better furniture and new bathtubs, the report says.

HVS envisions a downgrading of the hotel to a “mid-scale, limited-service” brand unless there is significant reinvestment and new deals on parking and meeting space with the city.

The HVS report was commissioned by the city as a prelude to its announcement this month that it was bidding to buy the hotel from its creditors, who purchased it in December 2009 in a sheriff's sale after foreclosing on the previous owner. The seller has its own report with its own story of the hotel, Patrick DePalma, chairman of the city's Five Seasons Facilities Commission, noted on Monday.

In the city-commissioned report, HVS concludes that the “as is” market value of the hotel is $2.2 million, or $8,000 per guest room.

The hotel's previous owner, Kronos Hotels and Resorts, bought the hotel for $5.8 million in June 2007, according to the HVS 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, a challenge 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 occupancy 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 says most “full-service” hotels with “upscale” branding like Crowne Plaza own parking facilities and convention space as part of the hotel. Cedar Rapids' Crowne Plaza has operated with lease agreements with the city for both parking and a ballroom, agreements which may not exist for the new owner of the hotel, the report states.

The Facilities Commission's DePalma said on Monday that the city is committed to making sure that no downgrading of the hotel takes place.

The city currently owns the parking ramp next to the hotel and will own the new convention space next to it, and both will come with hotel agreements so the hotel can continue to function with the branding status it now carries, DePalma said.

He predicted that the hotel will carry the Crowne Plaza flag into the future or one comparable to it - Doubletree is one he noted - or a brand one step up, like Hilton, he said.

The hotel is 15 stories tall. It has a 16th floor, but no 13th floor, the report notes.

As for hotel competition, the report defines the Cedar Rapids Marriott on Collins Road NE as an “upper-upscale” brand, and it notes that its estimated 2009 occupancy rate was 72 percent compared to 39.6 percent at the Crowne Plaza Five Seasons Hotel. Two other “full-service” hotels in the Cedar Rapids market, the Clarion Hotel and Convention Center and the Longbranch Hotel and Convention Center had estimated occupancy rates of 57 and 56 percent in 2009.