Hotel redevelopment project gets a preliminary OK

The Decorah City Council has approved a "Memorandum of Understanding" with Rebound Hospitality, the developers of a proposed hotel complex on the site of the former Bluffs Inn.  The 5-2 vote came after somewhat lengthy discussion Monday night of the particulars of the agreement.

The city had originally promised to give Rebound Hospitality $250,000 to help with the costs of demolishing the Bluffs Inn.  But based on an agreement with Decorah Jobs, the city is now promising to give $500,000--with the additional money coming from Decorah Jobs or through extra hotel/motel tax funds.

It was the timing of that financial assistance that drew the longest discussion Monday night.  City Administrator Chad Bird had proposed paying 25 percent of the money when Rebound purchases the property, 25 percent when demolition of the Bluffs Inn is half finished, 25 percent when the demolition is totally completed and the final 25 percent when the new hotel opens its doors.

Rebound Hospitality's Brett Reese asked that the final 25 percent ($125,000) be paid sooner, suggesting the city pay 50 percent of the fund when demolition was completed.  That led to counterproposals by city council members, with Tade Kerndt suggesting the city not pay the initial 25 percent until demolition had begun.

In the end, city council members approved a plan that called for the last half of the $500,000 grant to be paid when both the demolition is complete and a site plan has been submitted.

Now the two sides must create a "Development Agreement" that will spell out in detail the promises they are making to one another to get the hotel project built.