Appanoose requests more information on Honey Creek
Jul. 1—CENTERVILLE — Faced with a decision of whether or not to assume ownership of Honey Creek Resort, Appanoose County has sent a letter to state officials requesting numerous documents.
In February, the state began to consider the future of the resort located on Rathbun Lake after the company overseeing the property notified the state it would be leaving.
An option that appears to be at the top of the state's consideration is transferring the property to Appanoose County so that it could be locally operated.
During a special meeting on Thursday, supervisors voted to send a letter to the Iowa Department of Natural Resources that included 20 requests for various information and documents.
The letter, written by Appanoose Assistant County Attorney Alan Wilson, says that supervisors have "an extensive amount of due diligence to complete prior to giving you and the Department a response."
The board also shared they are "not interested whatsoever" in acquiring the resort without the current concessionaire agreement with Delaware North, the private company that manages the resort, being terminated.
The board is requiring all financial reports from 2016 to current, which is the period Delaware North has managed the resort on the state's behalf.
The letter also requests, from 2016 onward:
— capital budget plans,
— all completed capital improvements,
— records pertaining to the "personal property reserve" and "real property replenishment reserve" accounts,
— records of $2.5 million in claimed capital improvements to be made by Delaware North,
— records related to the collection of the conservation fee,
— all deferred maintenance repair records,
— itemization of personal property disposed of and what it was replaced with,
— records reflecting the history of gift cards and gift certificates,
— records relating to the operations and maintenance reserve account,
— the operating and maintenance plan,
— current personal property inventory,
— information related to pending or anticipated lawsuits relating to Honey Creek Resort,
— information regarding the servicing and testing of the lagoon,
— a list of third-party vendors and copies of any contracts related to said services,
— and a complete list of any audits, including State of Iowa audits, related to Honey Creek resort.
The board would also plan to have a professional inspection completed, but said it will only move forward with its consideration after Delaware North's contract is addressed.
Officials from the state of Iowa last met with supervisors on June 17, when they left the next steps of the process up to the county. They provided a timeline, based on the county's stated desire to keep the resort open through the winter, which would have required the county to pass a resolution requesting the state transfer the resort to the county by July 5.
Adam Steen from the Iowa Department of Administrative Services acknowledged the resort is "fraught with challenge" during the meeting, but said he felt the county stood to benefit.
The Honey Creek Resort was completed in 2008 and sits against Rathbun Lake in northern Appanoose County. It was funded by the State of Iowa with more than $35 million in bonds. While the resort has had profitable years, it struggled to pay off the debt that created it until the Iowa Legislature in 2013 wiped the slate clean.
After that, the resort soon after began reporting positive fund balances and has generally posted an operating profit, according to publicly available state audit reports.
Since 2016, the resort has been managed by Delaware North, which has limited some view of its financials. In the calendar year ending 2020, the company reported an operating profit of $407,000. But, the resort posted a net loss of $462,000 after things like capital improvement fund, corporation allocation, insurance, interest expense and depreciation were factored in.
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.
