OTTUMWA — The Ottumwa City Council pulled a major economic development need over the finish line during Tuesday's meeting at City Hall.
Soon, it will be time to get to work with shovels in the ground.
The council voted unanimously to approve a development agreement with Cobblestone Hotels LLC to build a four-story, 84-room hotel just south of the Bridge View Center parking lot along Church Street. The "Main Street line" brand of hotel will cost $9.9 million and will be built on almost 46,000 square feet of land, with an annual tax rebate of up to 20 years to the developer in the way of TIF revenue on the property.
Also, the city will provide a $500,000 site improvement allowance, which the Ottumwa Regional Legacy Foundation will give to the city as a pass-through to the developer, as well as the city committing $75,000 to "address unforeseen site issues."
In remarks during a public hearing before the vote, both Bridge View Center Executive Director Scott Hallgren and Meet Ottumwa Executive Director Andy Wartenberg called it a "game-changer" in the way they will be able to conduct business in the future.
"This will bring Ottumwa up to a level playing field with our competitors across Iowa that currently have hotels connected to them or in very close proximity to their venues," Hallgren said. "We want to be the best, we're growing and doing a lot of things to be the best, and this is one more step to do that."
Wartenberg cited the recent Babe Ruth World Series, which Meet Ottumwa claimed brought in $2.6 million in revenue to the city. Another hotel would assist in bringing more events to the city, especially when the hotel would be in a central location connecting the south side to the Main Street district.
"As great as our community is, if people can't get past the fact that we have older hotels, we will not attract those conferences," he said. "Building this will of course benefit Bridge View Center, but folks who come for conferences and sporting events are going to come into our community, spend money in our restaurants and gas stations."
City director of planning and development Zach Simonson said the development agreement "is a milestone, and authorizes the incentives that are necessary for the transfer for property."
"Cobblestone is the fastest-growing hotel chain in the United States right now, and this will claim a consistent Main Street feel, which is another great benefit," he said.
All the council members were enthusiastically behind the project, but councilman Marc Roe believed a hotel should've been built when the Bridge View Center was constructed 16 years ago.
"It was a grave mistake then and almost shameful, but I think that it's a great idea now," he said. "I can't even imagine what the opportunity cost has been about that decision. We subsidize $350,000-plus every year for the Bridge View Center. Out of all these years, how much money could have been ratcheted off of that by not having a hotel?"
Revenue from the hotel would also go toward local option sales tax and road use tax, in addition to a boost in hotel/motel tax.
"With the local option sales tax, 90% of that goes toward our streets, so this could actually help us with repairs," city director of finance Kala Mulder said. "Having construction in our area, and having people shopping local and staying local has done some really great things for the city."
Councilman Rick Johnson asked Simonson how Cobblestone decided on an 84-unit hotel, and if there was wiggle room to add on if needed.
"The answer we got was 'potentially,' Simonson said. "But the reality for them is they build another hotel. You usually grow one hotel at a time, not half a hotel at a time."
In other business:
• Mayor Tom Lazio presented both councilwoman Holly Berg and city director of finance Kala Mulder with awards.
Berg was presented with the Rhonda Woods-Smith Award from the Iowa League of Cities for "excellence among young city officials and those new to city government." Berg's nomination came from fellow councilman Matt Dalbey, who wrote a letter of recommendation in support of his colleague. Criteria for the award included innovation, sacrifice, bold leadership and commitment.
Mulder was presented with a certificate for excellence in financial reporting from the Government Finance Officers Association. The award recognized the finance department's work through June 30, 2020, and is the highest honor bestowed for financial reporting.
• Rath informed the public that a forum with the 12 candidates running for either city council or the mayor opening will be Sept. 30 at 6 p.m. in council chambers. The meeting is scheduled to be live-streamed on the city's YouTube page for those who are unable to attend in person. The city primary is Oct. 5.