Mason City council approves arena lease with mall, first construction bid package (VIDEO)

MASON CITY — The City Council in Mason City last night approved a revised lease with Southbridge Mall for the construction of a multi-purpose arena as well awarded the first bid package for demolition work for the arena.

The council approved the lease agreement with the mall owner, which is for an initial 20-year term, followed by four subsequent five-year terms for a total of 40 years.

The cost of the lease will start at $199,000 a year for the first five years, increasing by 10-percent each subsequent five-year period. That $199,000 is higher than the original proposal of $180,000 a year, but City Administrator Aaron Burnett says that’s because a rent provision was removed. “The original lease had an additional rent provision that had some language that needed clarification, it said 10-percent of profits. Honestly it was ambiguous and I think there were several different opinions on what that actually meant. So with that in mind, working with the attorney, the revision was made to make that a fixed amount. That fixed amount was rolled into the base rent, which brings the base rent to $199,000, and that carries through the lease agreement.”

Councilman Paul Adams also offered an amendment to the lease to deal with the ongoing issue of the mall owner paying his property taxes on time. “The rent payments are only paid by the city if the mall owner’s taxes are current with the county.”

Councilman Joshua Masson voted against the lease agreement, saying he could not support the lease agreement with the mall. “The further I go down the rabbit hole on this, the uglier it gets. There’s just too many red flags. So in the end, I have to look at it and say if I was the sole entity in this and this was my agreement with the mall owner, could I do this deal, and I just don’t see how I can.”

The council also approved the first bid package dealing with demolition of the interior of the former JC Penney store area where the arena will be placed. Originally the recommendation was to award the contract to Charlson Excavating of Clear Lake for $291,500, but Matti Roinilla of the ICON Architectural Group, the group selected to design the arena, says that bid was disqualified because it was not a complete bid for the project. “Unfortunately in working through our vetting process of the low bids, Allowance #1 and #2 were missed as part of the bid submission, therefore it’s an incomplete bid. Unfortunately this has happened, but with that, our only means of moving forward are to move on to the second, which would then be the low responsive bidder.”

Dean Snyder Construction of Clear Lake was the next lowest responsive bidder, with their bid being $423,500, still under the estimated cost of $700,000 to $1 million. There were five bids submitted, with almost a half a million dollar range between the lowest and highest bids. Roinilla was asked why he thought there was such a wide variance in the bids. “Being under that estimate, we are comfortable with where these are sitting. There is a wide range, I think a lot of that can be contributed to means and methods, as well as what your available workforce is.”

The council also approved the details of the second bid package for the arena, which would include the structural steel, concrete foundation and ice plant components of the facility. Bids would be due to the city on January 24th with the council approving the winning bidder at a special council meeting on January 29th.


Video of the council meeting from