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Industry

Financial Services

Company Type

Financing/Real Estate

Size

$8.75 Million

Investment Type

Equity

For additional information, contact:

Gary Levy

glevy@castleplacement.com

Phone number: 516 457-0104

OVERVIEW

Main Street Community Capital is seeking $8.75 million in equity for a 131 key Hyatt Place Hotel and Conference Center located in downtown Mason City, Iowa.

Reduced cost basis offering due to favorable financing: $15 million of USDA guaranteed debt financing and $8.7 million anticipated* in city and state grants (with additional operating incentives valued at a minimum of $1.1 million)


Minimal project leverage of 46%


Mason City’s first select-service hotel; will surpass the Hampton Inn as the highest-rated branded property in the area, filling a gap in the market


Located in a federally recognized Opportunity Zone, eligible for preferential Opportunity Zone tax treatment

 * Dependent on funding

OPPORTUNITY

Mason City (population 28,000) is the largest urban center in North Central, Iowa, located 120 miles north of Des Moines, Iowa and 135 miles south of Minneapolis/St. Paul, Minnesota

 

 

Current gap in market: Downtown Mason City has no room supply other than the 27 room Historic Park Inn. This lack of rooms has significantly limited attractiveness of Mason City for conventions, weddings, and other events, which need both meeting space and connected/nearby room supply

 

Unmet demand: Recent area enhancements include a 2,400 seat multi-purpose arena (adjacent to the hotel project), two successful minor league hockey teams; a new $25 million, 126,000 sq/ft swimming pool and fieldhouse complex capable of hosting regional AAU athletic competitions (2 miles from the hotel); nearly $50 million in health and wellness and recreational development projects in nearby Clear Lake

Strong commercial growth: Over $700 million of commercial/industrial expansion and new development with another $1.5 billion of projects actively in development

 

 

SOLUTION/STRATEGY

Planned opening in Spring 2025

131 rooms, a breakfast dining area, lobby bar, indoor pool, fitness room, business center, guest laundry room, and grab-and-go counter, and approximately 10,600 square feet of meeting space within the development (not including pre-function space)

Agreement with the City calls for the contribution of the site and all required parking at no cost to the project

In addition to the attached Conference Center, the City has provided funding for the renovation of the Music Man Square facility and the expansion of the Meredith Wilson Museum. These facilities will be managed and rented to the public by the hotel and connected to the hotel facility with a sky bridge constructed (already completed) at the City’s expense

REGIONAL MAP

MANAGEMENT TEAM

Robert Johnson

Approximately 20 years of commercial real estate experience. Completed development with historic preservation and sustainable building techniques through Sustainable Neighborhood Builders (SNBI). SNBl’s flagship project is the 265,000 SF Novelty Iron Works complex, a mixed-use redevelopment including historic loft condominiums, lodging,  restaurants,  bars,  and  retail  shops.  Expert  in  various  Federal,  State,  and  local developer incentive tools and complex deal structures related to Historic Preservation Credits, Low-Income Census Tract Investment, NMTC, and Opportunity Zone investments

David Rachie

Over 20 years of hospitality experience including extensive hospitality real estate financing, deal structuring, and acquisition. Completed several hospitality developments from the Caribbean to New York City, including a proposed $290 million redevelopment project of the iconic Novatel Times Square hotel. Experienced in negotiating and executing purchase and sale agreements, securing financing, working with local community governments, and executing development plans

Michael D’Orlando

Founder of Focused Project Management LLC, the Project Manager of the Mason City Hyatt   development. Wealth of knowledge accumulated over four decades of experience in construction, architecture, and   project management working with some of the nation’s leading firms including Marriott and Accor hotels. Involved in   the planning, design oversight, approvals, and construction implementation of over 15 million square feet of real   estate projects.

BFJ PARTNERS – CONSULTANTS

Gary Benson

has been involved in significant residential and commercial real estate development and construction, both new and renovation, for the past 45 years. Successfully developed millions of square feet of high-rise condominium, townhome, multi-family, mixed-use, hospitality, warehouse, office, and historic preservation projects. Notable projects include:

  • Calhoun Beach Club and Apartments – Restoration of historic building to residences and athletic and social club and development of new adjacent 220-unit apartment tower. Negotiated $100 million project sale to REIT
  • Calhoun-Isles Condominiums – Conversion of 1915-era grain silos into modern luxury condominiums
  • IVY Hotel + Residences – 1 million sq ft mixed-use new build including adaptive reuse of historic tower. 136 room Marriott Luxury Collection hotel and 91 luxury condominium units
  • In addition to his extensive real estate career, was a founder and early investor in home shopping network iMedia Brands (NASDAQ: IMBI), and served as an independent board member of Global Traffic Network and guided the completion of its $400 million private equity sale

Rob Furst

Active venture capitalist successfully investing in over 30 private companies as well as private placements in public companies. Successfully invested in several real estate investments including multifamily developments and single-family homes. Broad experience including managing the historic renovation of a 100- year-old Minneapolis, MN mansion and co-founding Adestinn, an innovative hotel booking system

Michael Johander

Entrepreneur, real estate developer and financier for over 20 years. Recent development projects include the conversion of a vacant nursing home into a modern 144-unit apartment building, conversion of a large vacant polluted industrial warehouse into a multi-tenant charter school serving over 1,000 students, and development of over 250 residential lots with a sales volume exceeding $40 million. Manages an extensive private equity portfolio with investments in media, hospitality, business services, healthcare, energy, and finance

Learn More About Main Street Community Capital

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CONTACT US

Hi. We're not around right now. But you can send us an email and we'll get back to you, asap.

Thanks, Ken

Ken Margolis | Managing Partner Castle Placement, LLC
1460 Broadway Street, Rte 400
New York, New York 10036
(212) 418-1188 | C: (516) 712-7784
kmargolis@castleplacement.com

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