Government

Cedar Rapids council candidates favor selling DoubleTree Hotel but are in no hurry

Venue helps the downtown, makes a profit, but private ownership favored

The candidates for Cedar Rapids City Council would, at some point, like to see the city sell the DoubleTree by Hilton Hotel it has owned since 2010. The hotel, with $40 million in renovations, helped the post-flood recovery of downtown. (The Gazette)
The candidates for Cedar Rapids City Council would, at some point, like to see the city sell the DoubleTree by Hilton Hotel it has owned since 2010. The hotel, with $40 million in renovations, helped the post-flood recovery of downtown. (The Gazette)
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CEDAR RAPIDS — The city of Cedar Rapids should not be in the hotel business, candidates competing for seats on the City Council in the Nov. 5 election say, but most are in no rush to sell the DoubleTree Hotel by Hilton.

“I don’t think any of us want to be in the hotel business, so I don’t think we plan on owning it forever,” said Ann Poe, 67, an incumbent and most recently executive director of Hawkeye Downs, one of three candidates vying for two at-large council seats. “We haven’t lost any money, to my knowledge, over it. ... I think we are getting into a position where people will feel more comfortable in the next few years selling it.”

The city of Cedar Rapids bought the rundown, 275-room, once privately owned Crowne Plaza Five Seasons Hotel from a creditor in 2010 for $3.5 million and spent more than $40 million renovating it as a modernized companion for a new adjoining Convention Center and renovated U.S. Cellular Center.

The hotel/convention center arena complex reopened in 2013, and officials have praised it as a post-flood catalyst for the downtown.

City ownership was intended to be temporary, but the hotel has proved profitable, which has helped subsidize losses in other city-owned properties, such as the convention center and Cedar Rapids Ice Arena.

And the $38.1 million in remaining debt on the hotel (as of 2018) also has made it impractical to sell, officials have said.

Poe and some other candidates were leery of what impact the hotel sale could have on other properties relying on hotel profits.

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“I’d like to see us sell it,” said Jorel Robinson, 32, a GoDaddy employee and advocate for at-risk youth who is challenging for an at-large seat. “I don’t think that we should be in the business of running a hotel, and basically, they’re using the hotel to run other things and pay for those other things. ... So, until they can get these things even, I don’t see them selling this because it pays for the other things that they want to do.”

Pat Loeffler, 53, a union leader, business owner and candidate for an at-large seat, said he didn’t feel a city should own such a property but said he needed more information.

“I wouldn’t mind seeing the city get rid of the building itself,” Loeffler said. “If that’s an opportunity, that could be great revenue for the city to sell that and cash in.”

While not unprecedented, cities don’t typically own hotels, and Cedar Rapids has faced criticism. Moody’s Investor Service called Cedar Rapids’ ownership of the hotel and convention center a “risk” in a report downgrading the city’s bond rating a notch from Aaa to Aa1 in 2014 and has repeated the assessment in more recent evaluations.

In 2011, the city signed a 10-year contract with an option for 15 years with Hilton Worldwide Inc. to run the DoubleTree.

Under the contract, Cedar Rapids could sell the hotel after five years, which was later extended by two years. Under the contract, Hilton Worldwide would have the first right to match any offer on the hotel.

DISTRICT 2

In the only other competitive City Council race, Sofia Mehaffey, 35, director of Meals on Wheels at Horizons, is challenging incumbent Scott Overland, 56, a financial services executive, in District 2, which includes parts of the southeast and northeast quadrants.

Mehaffey said the city rightfully stepped up to take over the hotel at a time no one else would, but she would like to see the city find a private owner.

“It’s great that we’ve had that as a venue, as a resource, as a nice place for our presidential candidates to come stay,” she said. “That’s been great, but it would be ideal to find someone to take control.”

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Overland, who is chairman of the city’s finance committee, said the hotel is doing “extremely well, it’s never lost money and is continuing to pay down upon debt” at around $2 million per year as well as create savings for future renovations. At “some point in time, it should be sold” back to the private sector, but the city “shouldn’t take a hit on it,” he said.

“When that should happen is kind of an open question,” Overland said. “It’s not costing the taxpayers a nickel. And it’s been because we have that hotel, and it’s in such great shape, and it’s maintained really well. It’s been a huge asset to the downtown, to the conventions and the other things that are going on downtown. So we shouldn’t be hasty and selling it. At the same time, at some point in time, maybe in the next three to five years, it may become very obvious that we should sell it.”

DISTRICT 4

Scott Olson, 73, a commercial real estate broker, is running unopposed in District 4, which encompasses much of the northwest quadrant and a portion of the southwest quadrant.

All council seats carry four-year terms.

TO VOTE

Residents can vote in person at the Linn County Auditor’s Office, 935 Second St. SW, through 5 p.m. Nov. 4.

More about the candidates: At-Large

Pat Loeffler: The co-owner of Corner Store Apothecary & More, 1612 C St. SW, said public safety, flood protection completion, supporting local laborers and businesses are his top interests. He described a “gang problem in Cedar Rapids that must be addressed” and the need to “buy local and build local” to support local workers instead of out-of-state workers.

Ann Poe: The two-term council member said she is trying to “keep the momentum going” in the post-flood era of Cedar Rapids. As chairwoman of the City Council’s development committee, she has helped guide redevelopment of underused downtown land, the allocation of tax subsidies and building priorities, including in Kingston Village and the NewBo District. She aims to push for flood protection on the west side, continue progress on street repairs, particularly in older neighborhoods, grow affordable housing and a trained workforce, and bring to life 8 acres of prime downtown real estate once reserved for a casino.

Jorel Robinson: A leader in a group dedicated to helping at-risk youth called Big Bang Foundation, Robinson said he is listening to the people of Cedar Rapids “openly and honestly, with the goal of creating a more exciting, safe and economically thriving community.” The 2017 mayoral candidate said he hopes to help youth, the elderly and veterans. He described himself as having the shared experience of too many people who’ve experienced “real-life, everyday struggle,” as the son of a single mother and father who spent time in prison.

More about the candidates: District 2

Sofia Mehaffey: Described as a nonprofit professional and activist, Mehaffey said she hopes to inspire meaningful conversations and explore new solutions to the problems the people of Cedar Rapids face, such as affordable housing, infrastructure built to last and bold conversations about our future. Mehaffey is director of community health and nutrition for the social services organization Horizons, A Family Service Alliance in Cedar Rapids, and a board member for the Academy for Scholastic and Personal Success, Family Promise and NewBo City Market.

Scott Overland: The vice president of investments at Cedar Rapids Bank & Trust is prioritizing equity in housing for renters and buyers, completing flood protection in as few years as possible and becoming a national leader in urban stormwater mitigation through better design practices in urban infrastructure and private development. Overland, who is serving his first term, cited the creation of the Neighborhood Finance Corporation, a neighborhood revitalization lending program, and implementation of topsoil requirements for developers as his biggest accomplishments.

More about the candidates: District 4

Scott Olson: The two-term council member has focused on safe neighborhoods, affordable housing and street repairs. He had been vocal in reinstating the Affordable Housing Commission and installing a pedestrian safety ordinance to deter panhandling along Interstate 380 exits. Among his top priorities, he said, are creating a year-round homeless shelter and establishing a senior center. Olson also twice ran for mayor, coming up short in 2005 and 2017.

Comments: (319) 398-8310; brian.morelli@thegazette.com

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