Leslie Hospitality’s sale of Waterloo’s Ramada Hotel and Five Sullivan Brothers Convention Center falls apart?

Oct. 14–WATERLOO — Leslie Hospitality is no longer running the Ramada Hotel and Five Sullivan Brothers Convention Center it was previously planning to buy and renovate.

Leslie Hospitality president Edwin Leslie and hotel owner Luke Castrogiovanni both confirmed Friday the hotel and city-owned convention center are back under Castrogiovanni's control.

Castrogiovanni said the purchase and management agreements he had with Omaha, Neb.-based Leslie Hospitality have been terminated and he was working to restore relationships with Ramada corporate and other vendors.

"Things have not worked out as planned," he said. "(Leslie) has left us a mess."

Castrogiovanni said he was using his own money to ensure events booked at the convention center will go off without a hitch, and he was expecting to get the center's liquor license, which had expired, back soon.

"There's no way I'm going to let someone's special day be ruined," he said.

Castrogiovanni, of Oak Lawn, Ill., said he had hired a new hotel general manager but was retaining the existing hotel employees and hiring more.

The turn of events appears to sink any chances LK Waterloo, of which Leslie Hospitality was a managing partner, will be able to follow through on a $20 million acquisition and renovation of the downtown hotel and convention center through a development agreement with the city approved in July 2017.

But Edwin Leslie, while confirming LK Waterloo was no longer in operational control of the facilities, did not concede the deal was dead.

"As there is pending litigation related to the matter I cannot make any comments as to the claim that we have withdrawn," Leslie said in an email. "Our position is clearly that we still have a binding and enforceable agreement with the city of Waterloo as it relates to our development agreement."

City Attorney Dave Zellhoefer and Mayor Quentin Hart both declined to comment Friday, noting the city had not received any documented confirmation of the business relationship between Castrogiovanni's Watermark Hotel Equities and LK Waterloo.

"I don't know the full details or parameters between Mr. Leslie and Watermark," Hart said. "I can tell you we've been getting considerable interest from folks that want to build a brand new hotel downtown near the convention center."

Leslie Hospitality took over managing the hotel and convention center under an agreement with Watermark Hotel Equities before the City Council voted to approve a development agreement for the renovation.

The development agreement called for the city to donate the convention center and $1 million to LK Waterloo to leverage a $6 million renovation. Both the hotel, which was to receive a $14 million upgrade, and convention center were also slated to receive property and hotel-motel tax rebates based on the increased revenues generated by the redevelopment.

None of those payments have been made by the city to date because LK Waterloo has been unable to come up with the loans necessary to close on the project.

Last month, Leslie blamed members of the City Council for undermining the project and threatened legal action. The city threatened to terminate Watermark's operating agreement for the convention center when Leslie stopped making the lease payments owed from events and parking.

Castrogiovanni said he is looking at options for the future, which could include finding another buyer for the hotel and convention center or working on a public-private partnership with the city to help finance a renovation both buildings.

"I have a good relationship with the city and want to respect that," he said. "We all need to be on the same page to be able to get this done."

Former City Councilman Tom Lind had called for an investigation into the deal with Leslie Hospitality last fall before losing his re-election bid.

"This is hardly surprising," Lind said Saturday. "From the very beginning, every warning sign pointed to this outcome.

"Unfortunately, Mayor Hart was more interested in using my and others' objections to the project for his own political gain rather than doing what was best for the city of Waterloo," he added. "Well, he was successful. He got me off the City Council but at a huge cost to the citizens of Waterloo."