Clear Lake hotel, event center construction underway

Work continues on Clear Lake’s multimillion-dollar Marriott hotel and event center project, despite COVID-19’s global impact on the hospitality industry.

Excavation, underground utilities and footings have been completed and construction of the concrete elevator shaft has begun at the project’s future site in Courtway Park east of Interstate 35.

“Our project is coming along well,” said Scott Flory, Clear Lake city administrator.

The hotel — the city’s first in at least 20 years — was celebrated with a groundbreaking ceremony in late June after the Clear Lake City Council approved a development agreement with JSM Investment LLC, of Johnston.

The project features an 85-room Marriott-brand hotel and an attached conference center and event space that accommodates about 450 people.

The building will be positioned on the southern four acres of Lot 4 in the Courtway Park subdivision with one entrance from Bayou Road.

Marriott International Inc. posted its second quarter results Monday, which were significantly impacted by the coronavirus pandemic.

The company’s net loss totaled $234 million for the quarter, a drop from the $232 million in net income it reported a year prior.

It is the hotel chain’s first quarterly loss in nearly nine years, Reuters reported.

Marriott President and CEO Arne Sorenson said in a press release Monday that the business is seeing steady signs of demand returning.

Currently, 96% of Marriott hotels in North Iowa are open today and occupancy rates are increasing, the company reported earlier this week.

“While the full recovery from COVID-19 will clearly take time, the current trends we are seeing reinforce our view that when people feel safe traveling, demand returns quickly,” Sorenson said.

At the end of the quarter, Marriott’s worldwide development pipeline totaled nearly 3,000 hotels and about 510,000 rooms, 45% of which are under construction.

Kalpesh Patel, CEO at VKB Management LLC, of West Des Moines, and Ryan Huegerick, CEO at HCI Hotel Supply, of Omaha, Nebraska, are the development team behind the Marriott hotel and event center project in Clear Lake.

Patel and Huegerick described their companies as a packaged development team. HCI Hotel Supply, of Omaha, Nebraska, builds hotels and VKB Management, of West Des Moines, owns and operates them.

As part of the development agreement, the city plans to offer a forgivable loan to JSM Investment not to exceed $1.2 million funded by incremental property tax revenues, a 10-year incremental property tax rebate agreement not to exceed $1.5 million with payments subject to annual appropriation by the council, and an additional $300,000 in construction incentives from incremental property taxes.

Clear Lake has agreed to pay the developer $150,000 if construction of the project, including at a minimum the excavation of utilities or footings, began before June 30. Another $150,000 will be paid to the developer if the hotel is operational by June 30, 2021.

The city has also agreed to reimburse JSM Investment up to $50,000 to cover a portion of the franchise application fee to Marriott International, which was reviewed — and approved — in early April.

The Fairfield by Marriott hotel in Clear Lake will be among nearly 20 in Iowa, and it’s the only one along Interstate 35 between Ames and Burnsville, Minnesota, which Flory said speaks volumes about the developer’s — and Marriott’s — confidence in the community.

The Courtway Park subdivision comprises 11 lots — six highway commercial and five light industrial — and two roadways and curb and gutter on nearly 64 acres east of Interstate 35 and north of Highway 122.

Source: Globegazette.com