TH EXCLUSIVE: Minnesota developer plans 103-room boutique hotel in Millwork District

Bob Johnson, co-owner and developer of the Novelty Iron Works building in Dubuque’s Millwork District, shows a portion of the building that soon will house a boutique hotel. Construction is slated to start in early 2021. PHOTO CREDIT: Dave Kettering

A new boutique hotel with more than 100 rooms soon will be created within an existing building in Dubuque’s Millwork District.

David Rachie, a partner with Minnesota-based development company OZ Hotels and Resorts, confirmed that the company plans to create a 103-room hotel within the Novelty Iron Works building, 333 E. 10th St.

Construction is slated to start in the first quarter of next year and be completed by the end of 2021. He said the project likely will cost more than $30 million.

“The Novelty Iron Works building is pretty incredible, and I thought it was really well-thought-out, in terms of what they were doing in the building,” Rachie said. “The entire Millwork District has been something I have watched for a while.”

The working name for the new hotel is Fleur de Lis. The development will be a partnership with Hyatt Hotels, and the hotel will be modeled after Hyatt’s Joie de Vivre brand, which focuses on boutique-style properties. Boutique hotels are generally smaller properties that are known for offering a more intimate and customized experience.

Partners with OZ Hotels and Resorts learned about the Novelty Iron Works building after Hyatt representatives introduced them to co-owner and developer Bob Johnson in late 2019. The nuts and bolts of the plan came together in the months that followed.

“We’ve been working with them for nearly a year on getting the plan together and refined,” Johnson said.

Novelty Iron Works already houses apartments and a variety of businesses, including Backpocket Taproom, The Comedy Bar and Gary Dolphin’s Iron Bar.

The arrival of a hotel will complete the vision for the property, Johnson believes.

“It really rounds out our mixed-use vision for the property and really complements what we have here already,” he said. “It brings a lot to the building, and I believe the Millwork District in general will benefit from another lodging option.”

Johnson emphasized that the hotel development will occur in a portion of the building that is currently unused. Hotel rooms will be constructed on the first, second and third floor in portions of the building, while apartments will remain on the fourth and fifth levels.

Existing businesses and apartments won’t be impacted by construction.

“There will be no disruptions,” he said. “Everything else will be unaffected.”

OZ Hotels and Resorts was established in 2019. Comprised of veterans in the hospitality businesses, the group pursues projects in newly established Opportunity Zones throughout the U.S. The zones were added to the tax code in late 2017 as part of the federal Tax Cuts and Jobs Act. The program incentivizes investment in low-income census tracts.

Rachie said creating the development within the Novelty Iron Works Building presented a unique opportunity for his group.

“Usually with a hotel project, you are asked to be the first person in. Then, everything else is built around the hotel,” he said. “In this situation, we are the last to come in and everything else is already in place.”

Johnson said the hotel will be an ideal fit for the building, which already hosts weddings and other events that attract out-of-town guests looking for a place to spend the night.

For existing tenants, news of the new hotel is cause for celebration.

Backpocket Taproom has operated within the building since 2017. Over the years, the business has expanded its footprint or offerings on multiple occasions, building out a basement “beercade” and recently adding food service.

Owner Jacob Simmons believes the hotel’s arrival will bring even more momentum to a part of Dubuque that was already moving in the right direction.

“The building is huge and has a ton going on in it,” he said. “To have a major player like that come in here and invest, not just in the building but in the whole district, that speaks well to the forward progress that is going on all around us.”