Mason City council sets July 1st meeting to vote on downtown hotel development agreement

MASON CITY — The City Council in Mason City last night approved setting their July 1st meeting to vote on a development agreement for the hotel portion of the River City Renaissance project.

The city has been working on finalizing an agreement with ES 2024 Mason City Hotel Associates, an LLC connected to Kinseth Hospitality Corporation, to start construction on a downtown hotel later this year. Kinseth has told city officials they want to have construction start in August as they had all but finalized their plans for the hotel.

City Administrator Aaron Burnett says the development agreement includes three key parts: a 100% tax rebate for the five five years and 50% for the last five years; a $2 million loan with 4% interest but no interest for the first three years; and a $2 million loan guarantee which was not in the original draft of the agreement earlier this year. Burnett says the loan guarantee is needed with today’s economic climate. “Unfortunately, the state of the world from when we first started the discussions to where we were when we pulled it off the agenda really created a situation where there was a gap in what they were hoping to do to get the project started this year, and so that’s where we needed to come back with that $2 million guarantee. That is really what’s moving the project forward at this point is the fact that we were able to offer that additional incentive. That will be backed by a TIF guarantee, so it actually works through the urban renewal area there.”

Burnett says Kinseth has settled on an extended stay-style hotel for the project since there’s not that style of one in the area.  “I believe it’s an 80-room hotel that will actually have a pool as part of the hotel. The plan is an extended-stay hotel that will be a good offering for what we have as far as a mix for hotels currently within the community. It also ties in really well with the convention center and the arena. Offering an extended stay there, really we see a lot of business travel, and it’s kind of surprising that we don’t have one of these hotels yet.”

Kinseth plans to start construction in mid-August with the project being completed 18 months later.