Hotel hostility

The city’s acquisition of a 48-year-old hotel known to attract criminal activity and had reportedly met the bare minimum of safety standards by inspectors caused a stir amongst citizens and elected officials during Monday night’s council meeting. Several people, including council members, voiced concerns about the $495,000 price tag and why something had not been done sooner to address the declining status of Newton Inn, located near the 164 exit of Interstate 80.

Prior to the meeting, city staff had acquired a signed purchase agreement for the 260,053-square-foot Newton Inn at 2000 W. 18th St. S., which had been negotiated down from the asking price of $1.2 million by BJM Hotels, Inc. According to the Jasper County Assessor’s website, the total real estate is valued at $277,020. Staff identified the property as a prime candidate for its Commercial D&D Program and will likely demolish the structure.

Citizens complained the city could make better use of the money, but many conceded the hotel, originally built in 1971, is well past its expiration date.

Throughout the city council meeting, a number of citizens were speaking out of order and spoke off-topic. Hansen frequently had to address and correct these behaviors, saying this was the first time since he’s served this community as mayor he had seen “this kind of un-decorum participation by the audience.”

Despite the arguments, members of the public were still given time to voice their concern. A general manager of the AmericInn in Newton questioned why the building hadn’t been condemned, to which Newton Mayor Mike Hansen said the city has no authority to do so. Still, paying almost a half-million dollars for this project is “irresponsible,” the general manager said.

Citizens also decried the funding toward this particular project would only grow when it comes time to finally demolish the structure and properly deal with hazards such as asbestos or mold. But the hazards at Newton Inn go beyond structural or sanitary concerns.

Newton Fire Chief Jarrod Wellik has been actively involved in inspections at the property for the past five years. Newton Inn has “diminished substantially” during that time period, he said. The owner met the bare minimum standards required by code. Wellik quoted Mel Duncan, building official and negotiator for the City of Newton, to describe the Newton Inn owner’s standards: “Meeting the very minimum code is just one step above the law.”

Wellik added, “It’s not the best property in the world. We go out there for a substantial number of calls annually.” In the past two years, the Newton Fire Department was averaging 20 calls per year, close to twice a month. Further inspections of the hotel saw very little revisions in the 120-room hotel. Several rooms are “offline.” Inspectors witnessed large amounts of mold on the outside walls. When told to clean it up, hotel staff only isolated the rooms from use.

“Each time that we go out and do inspections it seems that the property is going further down — it is not getting better,” Wellik said, later clarifying the rooms are not habitable. “They’re meeting the minimums that they need to meet to stay open, but it is not improving.”

The Newton Police Department has also devoted resources to monitoring activity at the Newton Inn, which has dramatically increased over the course of a few years. In 2017, Newton Police Chief Rob Burdess said officers reported to the hotel about 37 times and made five arrests. In 2018, police responded to 82 calls and, again, made five arrests. So far this year, officers were called to Newton Inn 139 times and made 12 arrests.

“We kind of tried to quantify the amount of time we’ve spent out there over those 139 times — we’re around 45 hours for the year thus far,” Burdess said. “And that doesn’t count our proactive patrols out there. We are specifically assigning our officers to do patrols out there just based on the behaviors we’ve seen, specifically over the past year.”

Typically, Burdess added, police officers are not asked to do extra patrols around normal hotels in town. However, the Newton Inn has had “significant issues” and is treated as a higher crime area. This not only requires officers to drive through the property but also get out of their squad cars and inspect the hotel at various hours of the night to try and keep the facility as safe as possible.

“We’re not a security department,” Burdess said. “Just trying to mitigate any poor behaviors that continue out there.”

Newton Mayor Mike Hansen noted Newton Inn was the only hotel in town that refused any training on how to identify, and subsequently prevent, human trafficking. The property, he said, has reached the end of its life and is constantly drawing resources from the Newton Police Department and EMS services.

“Council is considering what is the trade-off between taking that property into our inventory, demoing it (and) putting it up for redevelopment, or continuing to deal with an owner that’s going to find another person to do the very same thing over and over and over again and continue the crime and all the other things that are going on out there,” Hansen said.

Negotiations with BJM Hotels, Inc. were not easy, according to Mel Duncan. The owner, he said, has “a good record of buying derelict hotels” and has the capital to invest into renovations before selling them back on the market. The 120-room facility, Duncan said, has “about as twice as many rooms as he would ever need out there,” so he offered the property to the city instead.

“We would prefer to just sell it and be done with it. But he has the funds. He can reinvest money into that building and sell it for a lot of money. So the price negotiated here reflects that,” Duncan said, noting the city did not have a lot of leverage to pull the owner off his demands for this much cash. “That’s what we have to pay him to get him to come off of reinvesting money into the building and selling it.”

Duncan said the owner could invest anywhere from $50,000 to $500,000 or whatever the minimum price would have to be to bring it up to standard to where he could sell it. The owner of BJM Hotels, Inc. “would probably have that buyer waiting with a prearranged deal,” Duncan said, “and he would invest just enough to make that happen.”

Members of the Newton City Council largely agreed the hotel was in bad shape and had a poor reputation. Councilperson Steve Mullan encouraged people who have contacted him to see with their own eyes the state of the Newton Inn, which is highly visible from Interstate 80 and U.S. Highway 14. Councilperson Mark Hallam, too, agreed the building is a hazard but questioned the opportunity costs of putting so much money into one, large-scale D&D project.

“What are we giving up in the future in order to get rid of this one building? At what point do we borrow so much money for one project that we could be looking at an increase in the tax levy. I mean that’s my concern about this,” Hallam said. “I keep thinking — and I’m far from an expert on the topic — I keep thinking there must be some alternative method to improve that property that we just haven’t found yet.”

Councilperson Lin Chapé worried about the citizens and the “antics” on the property, and she believes the demolished site would be a great place for any future projects. She, like Hallam, has a problem with the dollar value. Hallam said from the constituents he talked to over the weekend, a large number of them are in favor of the city buying the property and demolishing it to make it available for new developments.

“Until they find out what the cost is,” Hallam added. “The comments that I’m hearing in person are running two-to-one against buying it.”

Evelyn George recalled back to a time shortly after she joined the city council where staff thought Newton had a lead on a new hotel coming to town. However, after the potential developer conducted an analysis of the area, they determined it was not economically feasible to attract any new hotel to Newton based on how many hotel rooms were empty and what the average price for those rooms were. George claimed the city is being dragged down by the Newton Inn.

“I’ve heard that at the raceway weekends a lot of people stay in Grinnell because they prefer some of those hotel accommodations,” she said. “We have to have overnight accommodations if we’re going to, in fact, get visitors to come and to stay in Newton. Because if they’re staying in Grinnell or Altoona, they’re not visiting and supporting our local business people in the manner they would if they were staying in our community. So it’s just the ripple affect that concerns me.”

All members of the Newton City Council voted to approve the financing of the Newton Inn purchase by borrowing money from the Water Pollution Control fund and the demolition costs from the General Fund. Finance officer Lisa Frasier said this is a funding mechanism for cities to be able act on unexpectedly large purchases that have not been bonded for yet. Frasier anticipates the city will bond for it in spring 2020 to repay itself.

“The council needs to be aware that we will need to borrow this in the spring of 2020,” Frasier said. “There’s really no question if you decide to go through with the purchase and the demo, we will need to borrow that money when we do our regular bonding.”

However, not all council members agreed to the final purchase. The Newton City Council voted 4-2 in favor of approving the $495,000 purchase price. Hallam and Chapé voted against the purchase and felt more investigation should be done. To have better authority over these types of issues in the future, Hansen said the city has been working with its legal team for the past two months to find a solution.

Contact Christopher Braunschweig at 641-792-3121 ext. 6560 or cbraunschweig@newtondailynews.com