Iowa DNR backing resort?s management

The Iowa Natural Resources Department is backing two companies that were hired to manage the state-owned Honey Creek Resort, although the facility lost money again last fiscal year.

The Gazette reports that revenue at the $58 million facility on Rathbun Lake was nearly $220,000 under budget, leading to a total loss of nearly $1.5 million after bond payments and management fees.

?There has been a lack of accountability since Day 1 at Honey Creek Resort,? said Janelle Rettig, a Johnson County supervisor and member of the state?s Natural Resource Commission.

Honey Creek facilities include a 105-room lodge, 28 cottages, a restaurant, a water park and an 18-hole golf course.

The state couldn?t find a private investor to build the resort, so the state financed most of the project with $33.5 million in bonds.

The resort was in the red $900,000 for the first 10 months of operation after opening in September 2008. A state audit said Honey Creek had an operating loss of $46,000 in fiscal 2010.

For the last fiscal year, ending this past June 30, Honey Creek made nearly $432,000 before bond payments and management fees. But that was nearly $220,000 less than budgeted and far below the required $1.9 million in bond payments, management fees and insurance costs.

The Natural Resources Department has asked that the state?s fiscal 2013 budget include money to pay off the bonds, said Chuck Corell, administrator of the department?s Conservation and Recreation Division.

Rettig has been pushing for new management to be put in place, hoping to raise revenue and hold down operating costs.

?If we want Honey Creek to stabilize and head in the right direction, we really need to wipe the slate and start all over,? Rettig said.

Central Group Cos. manages the south-central Iowa resort. Capital Hotel Management acts as the state?s asset manager and oversees Central Group.

Said Corell: ?It?s a little premature to blame it all on Central Group at this point because you?ve got to remember that the whole industry is depressed.?

Not only is the economy sluggish, Corell said, but a wet spring and early summer kept some golfers and other outdoor enthusiasts away from Honey Creek.

Honey Creek?s 46.3 percent occupancy rate for January through September was slightly higher than other resorts? occupancy rates, Corell said.

Central Group CEO Bob Pace said his company has managed Honey Creek well.

?We don?t have anything to be apologetic for, as far as we?re concerned,? Pace said. ?The property has done incredibly well for a destination resort opening at the beginning of a recession.?