Iowa city begrudgingly buys struggling Crowne Plaza Hotel

CEDAR RAPIDS, IOWA The Cedar Rapids City Council has agreed to buy the struggling Crowne Plaza Five Seasons Hotel for the bargain-basement price US$3.2 million.

The 281-key hotel is attached to building that is being converted into a new US$75 million convention complex. An operating hotel is a crucial component to the convention center project, and Cedar Rapids officials say the city is better off owning the money-losing Crowne Plaza than letting the convention center project slip away.

“I never dreamed I’d be voting to buy a hotel,” says Councilman Chuck Wieneke, The Associated Press reports. “We do this to make the convention center work—that’s why I’m voting for it.”

The hotel will shut down in February, and the city is expected to take ownership of the hotel in March. A renovation will follow, with the hotel scheduled to reopen by the fall of 2012, a few months after the convention center is slated to debut.

The hotel is owned by Washington, D.C.-based CW Capital, which foreclosed on it in 2008. Prism Hotels & Resorts is the current management company, but Frew Nations Group will manage the hotel once it reopens.

“I used to work in the hotel business, and I’m not real excited about being in the hotel business,” says Councilman Kris Gulick.