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The state of Iowa is taking steps to sell Honey Creek Resort on Lake Rathbun in Moravia, a one-time pet project of the Iowa Department of Natural Resources that became a worsening financial liability during the pandemic.
Opened in 2008, the $60 million, 850-acre southern Iowa resort — which has a hotel, cabins, golf course and pro shop, indoor waterpark, restaurant and conference space — was funded in large part by tax-exempt bonds.
But the project never became the premiere Iowa vacation spot envisioned by state leaders at the time. The Legislature spent another $33 million to pay off the outstanding bonds before turning Honey Creek’s management over to a private company six years ago.
Under a contract, Delaware North Companies was supposed to pay the state a portion of its profits — $1 million a year — after Honey Creek’s annual revenues hit $7 million. With its debt paid off, the DNR projected the deal could be worth millions to the state.
But Honey Creek’s revenues and occupancy dropped even before the pandemic hit, from $6.2 million in fiscal year 2018 to $5.9 million in 2019, information from the agency showed.
Revenues and occupancy dropped even more in 2020, and Honey Creek was operating at a loss, a state audit shows. 
More: After paying millions for hotels, convention centers, arenas, Iowa taxpayers could face big tab for coronavirus losses
At the end of last year, Delaware North informed the DNR that it wanted to discontinue operating Honey Creek, said agency spokeswoman Tammie Krausman.
“Delaware North will be operating (Honey Creek) normally this summer, and will continue to promote the property and accept future bookings,” Krausman said in a statement.
She said the agency is considering “all options for the property, including the feasibility of a sale.
“If a sale is possible, that is DNR’s preference at this time.”
The agency is taking bids to have the property appraised.
News of the sale comes as the DNR last week announced plans to evict two dozen park rangers from state-owned homes, as well as other workers, in parks around the state.
The state agency said the homes need an estimated $1 million in renovations and maintenance.
Krausman said that decision and the preparations to try to sell Honey Creek are unrelated.
Critics have said the evictions would mean the public would have to wait much longer for help to arrive in the event of a crime, medical emergency or other crisis. Some lawmakers also have questioned why the state isn’t willing to spend $1 million to fix up the homes when it has a sizeable budget surplus. 
Krausman said moving rangers and other workers out of parks, where they live rent-free, will not affect the parks’ safety because staff will continue to work their regular shifts and be available for emergency response.
The Associated Press contributed to this report. 
Lee Rood’s Reader’s Watchdog column helps Iowans get answers and accountability from public officials, the justice system, businesses and nonprofits. Reach her at lrood@registermedia.com, at 515-284-8549, on Twitter at @leerood or on Facebook at Facebook.com/readerswatchdog.

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