SIOUX CITY | Plans are in place for the beleaguered Sioux City Hotel & Conference Center to be purchased and renovated by a Florida-based developer for $10.5 million.
Under a deal with the city announced Wednesday, the proposed buyer, Conor Acquisitions, would buy the hotel for $4 million and invest an additional $6.5 million on a complete renovation of the downtown property at 707 4th St. They would also convert the 193-room hotel to a national brand.
The deal is expected to be finalized in January. Renovations would be complete in 2015.
Jonathan Chang, a managing partner and design consultant for the National Hospitality Design Group, which will handle renovations, said three national chains are being considered as a brand.
A decision is expected in the coming weeks.
“We just haven’t settled on one brand yet,” Chang said. “We are looking at a Marriott or Hilton equivalent.”
The proposal calls for the city to rebate $1 million toward the cost of renovations for the 12-story building, as well as a $400,000 property tax rebate on new tax revenue, and designated parking in an adjacent city-owned ramp.
The city expects to see a return on its investment within eight years.
The current hotel generates about $130,000 in tax revenue. The renovated hotel is expected to generate nearly $464,000 a year.
The council will be asked to vote Monday on amending the downtown urban renewal plan to include the hotel, and to set a 30-day notice of sale for the property.
Conor Acquistions, a Fort Meyer, Fla.-based real estate investment firm, emerged as the winning bidder for the beleaguered hotel after it went into foreclosure. The previous ownership group, Choa Hope LLC, hired a national investment firm, HVS Capital Corp., to market the property. A third-party has been running the independent hotel while the sale was pending.
The Sioux City Hotel, which opened in the 1970s as a Hilton, is the only downtown hotel with a direct skywalk connection to the city-owned Convention Center.
The deteriorating condition of the hotel has hindered booking events at the convention center.
The center booked seven events that required a significant number of hotel rooms in 2008. Two events with the need for hotel rooms were booked for 2013.
Convention Center Sales Manager Jonalee Jackes said a nationally recognized chain and major renovations at the hotel will boost business at the convention center.
“The convention center gets rave reviews, we do great,” Jackes said. “But people say they won’t come back until we do something with the hotel.”
The Iowa league of Cities is one of those groups that does not plan to bring its annual convention back to Sioux City until the hotel is updated.
Spencer Mayor Reynold Peterson, who was named league president when the conference came to Sioux City in September 2012, said the hotel is not on par with modern facilities found in other host cities.
“The biggest complaint was the condition of the hotel. It was less than desirable to stay there,” Peterson said. “The rooms were antiquated and it really could use a general facelift if you’re going to use that as the headquarters hotel for the convention center.”
Ragen Cote, the executive director of Downtown Partners, said the proposal is expected to have a ripple effect into nearby downtown businesses.
“If you are going to a conference in downtown, you will go to the restaurants and retailers too,” she said.
Journal reporter Conrad Swanson contributed to this report.