State updates county on potential resort giveaway

Jun. 20—CENTERVILLE — It appeared Friday that transferring Honey Creek Resort to Appanoose County has rose to the primary choice of officials investigating the resort's future.

But local leaders are leery.

"The county definitely has no money to put into it," said Linda Demry, the chairwoman of the Appanoose County Board of Supervisors.

On Friday, Adam Steen from the Iowa Department of Administrative Services and Iowa Department of Natural Resources Director Kayla Lyon met with supervisors and assembled community members for a second time to discuss the resort.

State officials were notified earlier this year that Delaware North, the private company which currently operates the resort on the state's behalf, gave notice they would be leaving their contract early.

That news has left to determine what the next step is. Among the options considered is transferring the resort to Appanoose County. The state could continue to own the resort and simply manage the resort itself or find another company — but Steen said Iowa doesn't want to be in the business of real estate or hospitality.

Selling the resort to a private entity would not be impossible but quite complicated Steen said, due to parts of the resort being on federal land and other legal complications. The state land could only be sold if it was deemed not to have conservation value.

The state officials shared an aggressive timeline for making a decision, keeping in mind the county's desire to see the resort return to being open year-round. Delaware North has been closing the resort during the winter months, a move local economic officials say has a negative financial impact both on the resort and the region.

"Nothing can do more for us than having it open year-round and having local control of who's hired to run it," said Michael Matthes, Executive Director of PACT Iowa.

He viewed the resort's recent financial troubles as the result of the state hiring the wrong company to manage it.

"It happens when you hire the wrong company — and we all go through that, it was an honest mistake," Matthes said. "I think it's terrific that Delaware North decided to leave; it's not their priority ... they're an absentee manager. You need someone who is in Iowa to run it, and they're plenty of great companies who can do it and I know we have folks here who are perfectly capable."

Not all were as warm on the idea. Local property owner Gary Messersmith wasn't convinced the county should even be involved, and also pointed to past instances where he felt the state pushed its burden onto the county.

"You're elected officials, when you vote for this remember — because you're putting us into a point of somebody having to control that," he said. "And we're not prepared for that at the county level. We've already been giving all of the state roads around that like, and in the '70s we built all the roads to the lake, which cost us a lot."

Messersmith also said he has observed fewer and fewer boats and lake usage over the past few years, and pointed to concerns around high inflation and gas prices that could hamper the county's ability to be successful with the resort.

The resort had been profitable early on, after it was completed in 2008, but required state subsidies to make payments toward the bonds that financed the construction of the $58 million resort.

The DNR had funneled more than $7 million to it before the Iowa Legislature in 2013 approved funds to clear the remaining debt. That action stopped the DNR subsidies, and currently, Delaware North's contract dictates it is responsible for any losses it may incur.

Steen outlined a potential timeline for the county to begin the process of receiving the resort, assuming they want to keep it open for the upcoming winter. The first step would be for the county to pass a resolution requesting the state transfer the resort to it, which would need to be done before around July 5.

A final offer between the state and county would be completed by July 13, and the county would negotiate with the U.S. Army Corps of Engineers in mid-July to discuss the necessary management lease agreement.

That timeline would be in hopes of getting the county ready to manage the land, and allow the state to terminate its Delaware North contract by October.

Even Steen acknowledged the resort is "fraught with challenge" but felt the county stood more chance to benefit.

"While there's challenge, there's opportunity," Steen said. "It's going to take an operator. It's going to take people communicating, people coming in and casting a vision, putting steps in place ... and then working very closely with the state to eliminate as much risk as possible in order to capitalize on the opportunity that is sitting right over there."

He said he thought it would be in the county's best interest to take over the resort and that the state would not leave the county hanging.

"In no part of any conversation have I had that leaves me to believe the state would just walk away," Steen said. "That would not be in the best interest of the community, the county, the state."

Whether the project advances at this point will be up the county, Steen said. The supervisors did not take formal action on Friday.

Kyle Ocker is the editor of the Ottumwa Courier and the Oskaloosa Herald. He can be reached at kocker@ottumwacourier.com. Follow him on Twitter @Kyle_Ocker.