New hotel ups its game, and its price
By REBECCA MCKINSEY
A casino’s got to have a hotel.
But who’s going to build it?
After a 3-2 vote in June that moved forward a $40 million casino and entertainment complex in Jefferson, Wild Rose Entertainment knew that a hotel would be a must.
And since Cobblestone Hotels already had plans in works for a Jefferson hotel — and had been working on them well before the casino was approved — it made sense for both sides to work together.
Jeremy Griesbach of Cobblestone Hotels and Tom Timmons of Wild Rose Entertainment spoke to the Jefferson city council Tuesday about the cooperative effort.
Jefferson had already been seeking out a hotel and convention center and had been working with Cobblestone for about two years.
A $800,000 tax increment financing, or TIF, incentive had been discussed to help fund the project. A 36-room hotel with a small convention center — a $3.2 million project — was set in motion.
Then the casino was approved.
Since Cobblestone’s plan was already in the works, cooperation seemed logical. But now, the project could be bigger.
Because Wild Rose Entertainment no longer had to take on the responsibility of a hotel, it could build a convention center. And with the convention center removed from Cobblestone’s responsibilities, it could look at constructing a larger hotel. The plan now includes a three-story, 71-room hotel, potentially with a pool.
The casino and hotel would be separate entities, although they would work together as needed.
“With (Cobblestone) doing the hotel, it allows them to go bigger and more extravagant with the (convention center), which then allows us to go bigger and more extravagant with the hotel,” Griesbach said.
The new hotel project is now estimated to cost $5.5 million. It is eligible for tax abatements — although Wild Rose won’t receive those — and Cobblestone is still asking the city for the $800,000 TIF reimbursement that had previously been discussed.
City council will vote within the next few weeks on financial incentives for the hotel.
Ben Yoder, executive vice president for Home State Bank, spoke at the meeting, emphasizing he was speaking from a lending perspective and not for the bank. He discussed the idea that tax money used for the project would eventually be returned through additional jobs and increased retail sails, tourism and property taxes.
“It will help further development issues with the city; I see that as being a benefit,” he said. “It simply means that down the road, hopefully there will be more activity downtown.
“You have both public and private partnership happening here, which is a really good thing to happen all the way through.”
Griesbach said that if the TIF reimbursement is approved, his goal for investor funding is $1.5 million; about $1.3 has been raised so far.
Although another hotel group has approached Wild Rose about building a hotel to accompany Jefferson’s casino, Timmons said it makes more sense to work with Cobblestone on the project, citing their interactions thus far as positive.
“There’s no reason to believe this marriage isn’t going to work,” he said.
This isn’t the first time a hotel was built by a separate entity near an Iowa casino, he added, citing the Diamond Jo Casino in Dubuque, which has a nearby Country Inn & Suites.
“Could we have (built a hotel) for ourselves?” Timmons said. “Probably. But we wanted to work with the local company and carry on that tradition.”
The council also unanimously approved awarding a $450,670 contract to J&K Contracting of Ames for a three-part water and sewer project that will be started this fall and is planned to be completed by the time the casino opens.
It will include a water sewer extension to the northwest corner of Iowa Highway 4 and U.S. 30, a water and sewer extension on North Mulberry Street, and a water line replacement on Wall Street.
Although the city sent out invitations to more than 20 contractors, only one bid was submitted, City Engineer John Milligan said.
A public hearing regarding the water and sewer project was held at the beginning of the council meeting, but no one attended to speak about it.
Wild Rose is also looking at the possibility of convenience and fast-food stores in two lots near the casino site, Timmons said.
Griesbach joked that public discussion of the hotel has perked up since the approval of the casino, which is “sexier” than a hotel.
He plans for the hotel to open at the same time as the casino next summer. Although the project cost is higher, he said, the larger hotel will also bring in more revenue.
“This has been in place from the beginning with Cobblestone,” Councilwoman Lisa Jaskey said. “It was a good plan back then, and I’m thrilled it will be bigger.
“Since I’ve been on council here, we’ve always said our No. 1 goal is economic development, and it’s here. Here we go.”