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Hilton First Stop in Coralville Search
City, hotel talks for new operator begin today
Iowa City Press-Citizen
April 12, 2005
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Marriott and the city parted ways last week, unable to resolve monetary differences in final contract talks.
Bill Boyd, a consultant with the city-formed Coralville Hospitality Corporation, said the process of finding an operator to replace Marriott should take a few weeks. Hyatt also is a contender.
"We are disappointed, but we're not without an alternate," Boyd said.
Hundreds of thousands of dollars generated by conference attendees are at stake should those weeks stretch into months. Construction on the eight-story structure, planned for the east end of Ninth Street near the First Avenue-Interstate 80 interchange, was to begin this month with completion slated for Aug. 1, 2006.
Josh Schamberger, president of the Iowa City/Coralville Convention and Visitor's Bureau, said his understanding from Boyd was that even with a two or three month delay, the hotel and conference center would be ready in time for the first major meeting, the Iowa League of Cities meeting in late September 2006.
Schamberger said he would become concerned if an operator wasn't found by the end of June, though he added that appears unlikely.
"If we push back the opening date much further, we're dangerously close to losing one of the largest conferences to ever come to Iowa City or Coralville," he said. "That's not to say that we can't book it for a future year."
He said the League of Cities conference should attract about 1,000 people, who would bring more than $400,000 in direct spending. No other building in the Iowa City/Coralville area could hold the conference, he said.Dismissing Marriott did not come without a price.
According to city figures, the Coralville Hospitality Corporation, which is overseeing hotel planning and construction, paid $77,515 in consulting fees to Marriott. City Finance Officer Terry Kaeding said those fees went to "pre-construction services" including reviewing plans and designs and approving them as meeting Marriott standards.
Mayor Jim Fausett said that money shouldn't go entirely to waste.
"I think the majority of (the resulting work) is still usable because we understand what we need to do, and we understand many, many facets now of the project," Fausett said, explaining Marriott's standards should be at least on par with those of other potential operators.
City Administrator Kelly Hayworth said contract negotiations with Marriott broke down Thursday over two main sticking points.
First, project developer Mortenson was to set aside $2.4 million into a fund that a consultant could draw upon to pay bills to Marriott. Marriott wanted that money up front, he said. Second, a third-party consultant has been hired to monitor construction, and Mortenson and Coralville officials offered a total of $500,000 to cover expenses should it open past deadline. But Marriott officials wanted the option to pull out at any time without the oversight of a third party, he said.
Marriott officials said they were not prepared to comment Monday.
Hayworth said he didn't know yet whether other operators would have similar concerns.
"That always could be the case," Hayworth said, but added: "My understanding is that would be an unusual situation."
Representatives of Hilton did not return messages left Monday. Hyatt spokeswoman Katie Meyer said she was not aware of any contact from Coralville and would not be willing to comment until an agreement was definite.
Meanwhile, work to find an overall developer for the planned Iowa River Landing district southeast of I-80 and First Avenue continued last week. Consultant Deanna Trumbull, Fausett, Hayworth and Nancy Quellhorst, vice president of the Iowa Environmental Project, visited two Kansas City developers with the site plans.
The $180 million Environmental Project would create a 4.5 acre enclosed rain forest, meant to anchor the Iowa River Landing along with the hotel.
A City Council majority has now called for a clear timeline and benchmarks on that project, which has stalled at $90 million since a $50 million Department of Energy grant in January 2004. Councilor Jean Schnake said those benchmarks ought to be established before the end of May, when Trumbull is set to attend a conference in Las Vegas searching for an overall developer.
Schnake said most developers would want to know exactly what is happening with the rain forest and the hotel, and that the city should have a clear answer.
"I think there's a lot of room for improvement, and I think we need to stop talking about it and get there," she said.