State picks new management for Honey Creek Resort

Mar. 24—RATHBUN LAKE — Officials on Friday afternoon announced a company with local ties has been selected to be the next concessionaire of the Honey Creek Resort.

Achieva Enterprises was selected to operate the resort, which is set to re-open April 14. The contract came about following a bidding process in which there was one other bidder, according to public records provided to The Courier Friday. The other bidder for the concessionaire's contract was made by Hartsburg, Missouri-based Maxim Golf.

In the lead-up to the bidding process, Achieva had taken part in a local town hall arranged by local chamber and economic development group PACT Iowa. They produced a video detailing their hopes for the future of the resort under their management.

The company criticized the resort's regular closure period from November-March each year, which they say means the resort loses out on holiday celebrations, hosting hunters that flock to the area, and other potential events. Their video presentation teased interactive experience areas in the resort focused on Iowa, as well as a farm-to-fork restaurant with Iowa's best farm fresh food, a local ice cream and gift shop parlor, and statues of famous Iowans in the drive to the lakeside lodge.

Achieva Inc. bills itself as a "leading global association management, communications and 'edutainment' company." The company's leadership includes Terry and Beth Henderson, who own land in Appanoose County. Terry Henderson is the founder and president, while Beth Henderson is the CFO and co-owner.

The state last year had pondered giving the resort to Appanoose County to manage locally after Delaware North, the previous concessionaire, had given notice they'd be leaving the management contract early. The state had also pondered a sale of the resort, though such a sale would be littered with hurdles primarily due to parts of the resort being located on federal grounds at Rathbun Lake.

The roughly $58 million Honey Creek Resort was built at the existing state park of the same name, completed in 2008 during the Great Recession. The State of Iowa funded most of the construction through more than $35 million in bonds.

In its first year, the resort was in the red by more than $800,000. After years of the DNR funneling more than $7.1 million to it to make bond payments, the Iowa Legislature in 2013 approved up to $33 million in funds to clear the bond debt.

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 a private company, 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.

The DNR has not funneled money to the resort since the 2015-16 fiscal year, when the resort posted an operating loss of $348,550. Any losses under the management agreement were to be absorbed by Delaware North under the contract.

The future

Bid documents submitted by Achieva, and provided by the state to The Courier Friday after the announcement was made, spelled out $2.7 million of proposed improvements over six years. Those included the construction of a new welcome center, ice cream parlor, spa, workout facility, small group pavilions, upgraded landscape and upgrades to marina/water park recreation area. The group also proposed guest and visitor amusement rides, including horse-drawn carriages, and a holiday light, Christmas and fall village display.

Final terms of the agreement were not disclosed immediately on Friday. In their proposal, Achieva had offered a percentage of total revenue if revenues clear the $3 million total.

The firm also pitched the Iowa Tribute Center, a multi-purpose arena that's billed to make Honey Creek Resort Iowa's premiere year-round destination. The arena, tribute hall and welcome post would provide virtual exhibits, shops, concessions, miniature golf, concerts and entertainment, livestock shows, and large dinners.

Resort's condition

A November report from the West Des Moines-based Shive Hattery Architecture and Engineering firm conducted by the state identified repairs totaling $6.8 million that would be needed in the next 15 years. About $1.7 million in repairs were marked as urgent.

The firm said the repairs would be needed to keep the resort in good shape, but reported even with the lengthy list of repairs the resort was generally in good condition.

The biggest urgent need identified tallied nearly a half-million dollars, as the firm said the elevated decks of the resort are not adequately supported and are beginning to sag.

A report by PACT Iowa given to the Centerville City Council in January had said almost half of the resort's hotel rooms weren't usable after burst water pipes flooded them. State officials have not responded to requests for comment regarding the information.

The damage was not noted in the report, but it's possible it occurred after the report was generated.

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.