Honey Creek posts operating profit before debt payments

Honey Creek Resort, a $58 million state-owned facility in southern Iowa, had an operating profit for the first time last fiscal year, clearing $4,230 before debt payments.

State Auditor David Vaudt released a report Tuesday showing the resort saw operating revenues of $5,547,357 for the year that ended June 30, compared to operating expenses of $5,543,127.

Honey Creek?s revenue wasn?t enough to cover the resort?s $1.5 million a year in bond payments, which the Iowa Department of Natural Resources paid with funds intended for conservation efforts in all 99 counties. The resort also fell $220,000 below budgeted revenue.

Honey Creek, which opened in September 2008 on Lake Rathbun, boasts a 105-room lodge, 28 cottages, fine-dining restaurant, water park and 18-hole golf course. The state financed most of the project with $33.5 million in bonds.

The resort was in the red $900,000 for the first 10 months of operation. A state audit showed the resort had an operating loss of $46,000 in fiscal 2010.

The DNR paid Central Group Companies, of Minnesota, more than $225,000 in fiscal 2011 to manage Honey Creek, the audit showed.

Central Group CEO Bob Pace told The Gazette in November that his company has steered the resort well through rough economic times.

?We don?t have anything to be apologetic for, as far as we?re concerned,? he said. ?The property has done incredibly well for a destination resort opening at the beginning of a recession.?

DNR officials said Honey Creek is faring better than other Midwest resorts.

Its 46.3 percent occupancy rate for January through September was slightly higher than other resorts? rates and the revenue per available room for the same period was $66.93, compared to $57.59 for the comparable facilities, data compiled by Honey Creek?s asset manager show.

To read the state auditor?s full report, go to: http://auditor.iowa.gov/reports/1260-5420-BC01.pdf.

Source: http://easterniowagovernment.com/2012/01/10/honey-creek-posts-operating-profit-before-debt-payments/

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