SIOUX CITY | The City of Sioux City plans to offer approximately $6 million in tax rebates over a period of 15 years for a proposed hotel that would adjoin the Sioux City Convention Center.
Under proposed plans shared with the Sioux City Council Monday, Kinseth Hospitality Co. would invest $21 million to build the five-story, 150-room Courtyard by Marriott hotel on the property that currently serves as the Convention Center parking lot. The city would contribute $6 million in tax rebates, funded by taxes generated by the new development of the hotel.
The city is also in talks with Kinseth to oversee management of the Convention Center, which would include catering. The city's contract with Centerplate, which provides management and catering at the Convention Center, expires in June.
Mayor Bob Scott, who two weeks ago said the hotel proposal doesn't make sense and suggested instead to turn the convention center to a rec center, acknowledged the hotel project will likely go forward whether he votes for it or not. He said his main concerns are the parking and the layout of the hotel.
Economic development staff on Monday updated the Sioux City Council on the progress on the more than $70 million project for which Sioux City is seeking $14 million in future hotel and sales tax revenue from the Iowa Economic Development Authority's Reinvestment District program.
The project includes three big-ticket items: Ho-Chunk Inc.'s Virginia Square project, an ag expo and learning center, and the Courtyard by Marriott hotel built adjoining the Convention Center.
City Council members asked questions ranging from parking to funding to when they could expect the Iowa Economic Development Authority Board to grant final approval to the project, which has been in the works since March 2015.
Councilwoman Rhonda Capron said she is concerned that the process is taking so long and that the state board is growing "antsy."
"They're kind of getting sick of us kind of, you know, piddling around a little bit," Capron said. "So that's my big concern."
Dougherty acknowledged that the state board is eager to see the project finished, but he said it is a complex process.
"I think if we get down the road into the summer or something, that would be too long," he said. "But I think we're okay right now. They're looking for progress from us, and I think we can show that."
Dougherty said the city must have financing secured for each aspect of the project. Questions still remain about the proposed ag expo and learning center, which had reached $3.2 million of a $5 million private fundraising goal as of mid-February.
He said the city plans to update the state board on the progress during its April 21 meeting but said a request for final approval was unlikely.
Dougherty said it would be difficult and unlikely to drop one of the portions of the project moving forward, with each one essential to the project.
With the hotel near the Convention Center, the city plans to use $5.1 million in Reinvestment District funding to construct a 140-plus-stall parking garage and improvements to the Convention Center, which would include renovation of an existing meeting room into a ballroom. The two buildings would be connected by a pre-function space.
Scott asked why the hotel couldn't be taller, reducing the amount of parking space it takes up.
"Why not a six-story, seven-story hotel?" Scott asked. "Your requirement for a parking ramp might not even be necessary."
Dougherty said staff believe adequate parking exists in the area, pointing to 1,097 stalls in the nearby Heritage and Discovery parking ramps and an additional 349 stalls within two blocks of the hotel. He said revisions to on-street parking near the hotel will add 33 new stalls, and the hotel development itself will add 162.
Dougherty also addressed whether the Howard Johnson, the former Hilton hotel connected to the Convention Center via skywalk, could be renovated to the city's needs. Such a solution was proposed by the Tax Research Council, a local watchdog group, last week.
He said renovating the Howard Johnson has been explored multiple times by prospective developers in past years and was found to be cost-prohibitive. He said the plans for renovation by the current owners are limited.
The city is currently in a 30-day window inviting proposals for the property where the hotel will be constructed. The council is tentatively set to vote on development and minimum assessment agreements April 17.
In other action, the council voted 5-0 to approve a development agreement worth $1.5 million for Chestnut Hill, a proposed 80-home residential development on Sioux City's north side.
Developers Rick Bertrand and Casey Fenton plan to transform the site of a former borrow pit near 28th Street and Floyd Boulevard into Chestnut Hill, a development targeted to families and retirement-age residents, a $17-to-$21-million investment.
Long Lines Family Rec Center
The council also voted 4-1 to approve plans and specification for a proposed remodel at the Long Lines Family Recreation Center, the former Municipal Auditorium attached to the Tyson Events Center. Scott voted against the item.
The Long Lines remodel project, budgeted to cost more than $400,000, would include polishing concrete treads and installation of new handrails, contoured bench seating and arena sports flooring.
The council also voted to assess a $300 civil penalty against the Wal-Mart at 3400 Singing Hills Boulevard for violation of the Iowa cigarette laws.