SIOUX CITY – Kinseth Hospitality Inc. is asking the Sioux City Council to amend its development agreement with the city for the 150-room Courtyard by Marriott hotel due to problems hiring as many hotel employees as the company has promised.
According to documents filed with the city, the COVID-19 pandemic has impacted the $22 million, five-story downtown hotel connected to the Sioux City Convention Center. The hotel opened on May 14, 2020 in the first year of the pandemic. Kinseth Hospitality, a North Liberty, Iowa based company, manages both the convention center and the hotel.
“While the new hotel is fully operational, the ongoing COVID-19 pandemic has negatively impacted the hospitality industry and ability to hire and retain staff. Due to widespread staffing issues, Kinseth has requested a change in the number of full-time employees required under the agreement to more appropriately reflect the challenges of the pandemic,” the documents read.
Although Kinseth continues to actively recruit and train new employees, it currently has 19 full-time and 37 part-time employees, according to the filing. Under the current development agreement, Kinseth should employ 40 full-time employees by January 1, 2020.
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“Due to current conditions and the nature of part-time work, the (full-time) tally is currently 23.6,” the filing reads.
Messages left for the hotel manager and a Kinseth project manager were not immediately returned on Friday.
Dougherty
The proposed second amendment will adjust the number of full-time employees so that Kinseth must employ 20 full-time employees by July 1, 2021 and maintain that number through July 1, 2023. From July 1, 2024 to July 1, 2034 Kinseth shall employ 30 full-time employees.
Marty Dougherty, the city’s director of economic development, said he believes the hotel is facing the same challenges that every hospitality industry in the country is currently facing amid the ongoing pandemic.
“It’s the fact that the pandemic reduced the hospitality industry and then there was some difficulty finding and training people,” he said. “They told us they would hire more now if they could find any. They intend to increase their headcount as they can find more people and as things improve and they have improved. Your business is attracting like you would find at most hotels in the area.”
If the council votes to amend the development agreement at Monday’s meeting, the action will not alter Kinseth’s previous financial commitments to the project, including paying property taxes and hotel/motel taxes. Iowa Reinvestment District revenue began in October 2019 and will not be affected by the change, according to the documents.
To support Kinseth’s investment, the City funded the construction of a parking garage behind the hotel and alterations to the current Convention Center.
“It is a beautiful hotel. I’ve only heard good things about the people who stay there,” Dougherty said. “I think they will do very, very well. We love the fact that it is in this area and next to the convention center and on historic Fourth Street which has so many restaurants and things to do. Well positioned I think, but they’re open during the pandemic.”
In the fall of 2018, work began on converting 7,500 square feet of the convention center into a ballroom for events and construction of a new 7,260 square foot “Anteroom” adjacent to the five-story hotel. The Sioux City Council awarded L&L Builders the $2.9 million contract for the convention center after bidding on the project again.
The convention center renovation was the second of two city-funded projects, both of which together cost over $2 million more than expected, to support the Courtyard by Marriott hotel.
A $3.7 million bid for the first project, building a two-story parking deck at Fifth Street and Virginia Street to accommodate hotel guests, was about $1.2 million more than the architect’s original estimate.
Since its construction in 1988, the convention center has hosted thousands of events. The City of Sioux City has stated that the new space will help market the facility and attract additional events, resulting in additional hotel/motel and sales taxes.
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