WATERLOO - The city is looking to buy and demolish a hotel at a prime location for new downtown development.
Owners of the Grand Hotel, 300 W. Mullan Ave., have verbally agreed to sell the 100-room lodging operation and adjacent property to the city for $800,000 plus up to $20,000 in closing costs.
"We would raze it and use it for redevelopment," said Community Planning and Development Director Noel Anderson. "That's a pretty major location. It's right there on Highway 63, which we're working on, and it's right next to the TechWorks campus, which we're working on."
City Council members were initially expected to vote on the real estate contract Monday. But action was tentatively rescheduled for the first council meeting in July, which is in the next fiscal year.
"We don't want to start the process and then not be able to finish it in the same fiscal year," Mayor Buck Clark said. "That creates some bookkeeping problems for our (finance department)."
The hotel is adjacent to an "entertainment/sports zone" designated in the city's downtown master plan, within a few blocks of Young Arena, the Waterloo Center for the Arts and the new downtown RiverLoop Expo area and a Cedar River front amphitheater now under construction. Long-term plans call for a recreation center in the entertainment zone.
The Grand Hotel essentially sits in what is the front yard of the Cedar Valley TechWorks, a agricultural technology center and business park being established in and around two former John Deere Westfield Avenue manufacturing buildings.
"That is a primary spot downtown, and we want to own it," Clark said.
Anderson said any purchase agreement would require the hotel to be empty before the city took ownership.
There would also be a period between the council vote and the actual closing "to give us some time to do some environmental investigation and also provide time for people to move."
The hotel, which is owned by 190 Orange Avenue Inc., a corporation in Lakeside, Calif., includes a number of lower income guests who are living there full time or on extended-stay packages. Finding new living arrangements may not be an easy task, said Clark, noting rumors about the sale last year touched off some panic among tenants.
Black Hawk County Assessor's Office records show the hotel and an empty adjoining lot have a combined value of $740,000, with the actual structures accounting for less than half the value. Anderson noted an appraisal determined the $800,000 purchase price, which "is more the value of the land without the buildings."
While the city has been in contact with hotel officials for some time about a buyout, talks picked up after the June 2008 flood which inundated the area around the hotel.
"They did have some flood damage that wasn't helpful to their business," Anderson said. "They weren't fully repaired."
The hotel was built in 1963 and has changed hands and names several times. It became the Twin Torch motel in 1976, turned into the Rodeway Inn in 1988, briefly becoming a Howard Johnson motel in 1995 before rebranding as a Travel Host Inn. The current owners bought it in 2007.