Washington revokes hotel development agreement

WASHINGTON — The Washington City Council voted Tuesday night to terminate a development agreement with Washington Hotel Group LLC, which has planned since 2023 to build a sizable hotel on the east side of town.

The move came after developers told the council they were pumping the brakes on construction efforts, citing “economic uncertainties.” Construction had already faced delays as owners handled unrelated building renovations elsewhere in town, and struggled to find contractors available for the hotel. March 1 marked a rescheduled deadline to begin construction on the hotel, a condition of the city’s support.

“While this decision has been difficult, we will continue to hold ownership of the property for the proposed project and are optimistic about revisiting construction of the hotel in the future,” read a letter from Washington Hotel Group LLC, included in the city council’s meeting materials Tuesday night. “We sincerely appreciate your continued support and value our partnership.”

The news comes as a disappointment to many. Several community members praised the proposed hotel back in 2023, and advocates said the business would be an economic boon for Washington, with 30,000 square feet, 54 rooms, and three stories. One economic impact report predicted the hotel would pour roughly $360,000 into the local labor market, and indirectly generate around a million dollars worth of economic activity per year.

The now-terminated development agreement offered hotel owners sizable property tax rebates, totaling up to $1.5 million over the course of a decade.

Washington Hotel Group Cofounder Dave Waite said in a phone call Tuesday night that he wasn’t sure when construction plans would be back up for discussion. Economists across the nation have speculated in recent weeks about a potential recession, and about construction material costs amid trade disputes between the U.S. and major economic partners like Canada, Mexico and China.

“It could be six months, it could be a year, I wouldn’t think it’d be much past next year,” Waite said. “And we’re still actively working on this … it’s not like it’s down and out, we just didn’t meet the deadline for the city, so we felt it was best to let them know.”

Waite said the hotel group still planned to pursue a development agreement with the city, once investors have a new timeline, and the economic confidence to move it forward.

“We really don’t want to change anything from what we have,” he said. “This is something that’s great for Washington that we really want to do, and we have an investment in that property, there’s just a lot of uncertainty right now with the economy, the materials, all of those things.”

Council members said they had similar hopes for the hotel’s future.

“We hope in the future this will move along, we sure need this hotel,” Mayor Pro Tem Illa Earnest said after Tuesday night’s unanimous vote to end the development agreement.

Comments: Kalen.McCain@southeastiowaunion.com