Oct. 6, 2011
Foundation sells hotel to ISU-friendly investor group
by Anne Krapfl
The ISU Foundation has sold the Gateway Hotel and Conference Center south of campus to a group of investors that calls itself Friends of Iowa State University Hotel Holdings L.L.C. The $5 million sale, which includes the hotel, hotel contents and 17 acres of surrounding grounds, was finalized Oct. 4. The sale also includes the on-site restaurant and bar, which has operated as the Iowa Stater since August 2010.
The "Friends" investment group is led by Al Jennings, a 1956 Iowa State graduate and chairman and CEO of EFCO Corp., a concrete form company based in Des Moines. The group includes about 10 confirmed investors. Another 50 alumni or ISU supporters with a previous connection to the hotel have been invited to become investors as well. The membership of the investor group should be firmed up by March.
Doug Drees, a lawyer for EFCO and spokesman for the new owners, said FLIK Conference Center Management, based in Rye Brook, N.Y., will continue to oversee the Gateway's day-to-day operations. He said the hotel's name will not change.
In a statement, the investing group said it is purchasing the hotel because it is "committed to providing a first-class hotel and conference facility owned by people who are supporters of Iowa State University and its mission."
"It's a great hotel and the foundation did a good job of keeping it in condition," Drees said. "We think the Friends of Iowa State University group is only going to do an even better job. It's important that this facility be a showcase for Iowa State."
In addition to 187 guest rooms and the Iowa Stater restaurant, the Gateway complex includes 16,000 square feet of conference space.
Leaving the hotel business
The Gateway hotel was built in 1978 by the foundation and 35 individual partners in the Ames community who, over the years, turned over their ownership to the foundation. Jennings was one of these original partners. The hotel had a Holiday Inn franchise from 1978 to 2001.
The foundation's board of directors announced in July that it would sell the hotel, restaurant and convention center.
"Running a hotel is not our core business, and as the hotel business has become more complicated and more competitive, that fact has become more obvious to us," said Lisa Eslinger, senior vice president of finance and operations for the foundation. "Our core business is to raise money to support Iowa State University."
