SIOUX CITY, Iowa (Iowa Media Wire) — The managing company of the Sioux City Marina has filed a counterclaim against the city’s lawsuit.
Last month, the city of Sioux City sued River City Hospitality, LLC (RCH), claiming the company breached its contract with the city by deciding to not open the Sioux City Marina for the summer of 2024. In response, RCH is accusing the city of breaching the contract themselves for not accepting RCH’s justification.
On April 29, an attorney with RCH informed the city that they would be terminating “the portion of the Lease as relates to the lease of the marina area, in accordance with the provisions of Article 17.” That article allows the marina part of the lease to be modified “[i]n the event the water flow and access to the Missouri River is terminated, materially lessened or materially altered.”
The city took issue with RCH’s use of Article 17, claiming in a petition that the issues with the marina brought up by RCH, including mud buildup and failing docks, were just typical maintenance issues that the company is normally responsible for and don’t fall under Article 17. Therefore, the city is arguing RCH breached the terms of the lease.
In its response, RCH denied this claim and denied that the city had been significantly damaged by RCH’s decision. The managing company also said the lease doesn’t mention any conditions under which the marina, along with Jolly’s on the River and Hilton Garden Inn, are required to be open.
RCH also argues that the city mischaracterized the issues with the marina and the company’s obligations under the contract.
According to RCH’s counterclaim, under the terms of the contract, if the lease is terminated, the city “must pay RCH the fair market value of the [marina, hotel and restaurant].” Furthermore, if the marina, hotel and/or restaurant are damaged by an “uninsured event,” and the city declines to pay for the damages, either RCH pays or the marina part of the lease is terminated. As a result, RCH argues that the city will have to pay the company for the marina, hotel and restaurant.
Additionally, through a proposed injunction, the city sought to prepare the marina for a summer 2024 opening without RCH’s involvement. RCH argued that this is barred by the Fifth Amendment because it “seeks to take RCH’s property without due process of law or reasonable compensation.” Even if RCH breached their contract, the counterclaim argues, the city would not be able to operate the marina themselves.
RCH argues that it is entitled to the court’s interpretation of the lease and what exactly all the rights and obligations are.
The company ultimately accused the city of breach of contract and is looking for compensation in the form of damages.
On March 22, the Sioux City Marina announced on its Facebook page that the marina would not be open for the summer, citing low water levels. However, a week later, city manager Bob Padmore said the lease required the marina to be open.
Midwest Franchise-Iowa, LLC entered into the original 99-year lease in 2003 before RCH purchased it. You can view that full document below: