State-Owned Iowa Resort Faces Legal Fight Over Sudden Shutdown

Judge Halts Reopening of Honey Creek Resort

DES MOINES, Iowa — A Polk County district court judge has issued a temporary injunction preventing the state of Iowa from reopening Honey Creek Resort while a lawsuit over the resort’s shutdown moves forward.

The order, issued Monday by Judge Jeffrey D. Farrell, bars the state from hiring a new operator or removing any property linked to Achieva Enterprises, the resort’s most recent manager. The ruling also requires the Iowa Department of Administrative Services to handle routine maintenance, security, and necessary winterization at the facility.

Honey Creek Resort, located on Rathbun Lake in Appanoose County, is owned by the Iowa Department of Natural Resources and includes a 106-room lodge, 28 cabins, a golf course, a marina and an indoor waterpark. It opened in 2008.

Operator Claims Contract Breach

Achieva Enterprises, which began managing the property in 2023, filed a lawsuit on Nov. 11 accusing the state of breach of contract and other damages. The legal filing came days after the Department of Administrative Services announced it was ending the management agreement and closing the resort.

As of Nov. 18, the state had not filed a response. The Iowa Attorney General’s Office declined to comment.

In the lawsuit, Achieva argues it invested its “capital, time, creative talents, expertise, and reputation” to revive a resort that had long struggled. The suit claims the company increased occupancy, revenue, guest satisfaction scores and sales-tax contributions to the state. The filing states that holiday reservations were strong and that Achieva had already purchased inventory for an upcoming Thanksgiving banquet.

Achieva is seeking damages plus interest and wants the court to bar the state from interfering with its access to or operation of the resort while the case proceeds.

Sudden Shutdown at Center of Dispute

According to the lawsuit, the state abruptly closed the resort in late October, sending home more than 50 employees without notice and refunding $25,000 in reservation deposits. The filing says guests were forced to leave in the middle of their stay, resulting in “humiliation and chaos.”

Achieva also alleges the state distributed the owners’ personal cellphone numbers to frustrated guests and confiscated personal property purchased with private funds.

A letter from Administrative Services Director Matt Campbell, dated Oct. 29, said the state believed Achieva had abandoned its duties after Beth Henderson, one of the owners, allegedly stated that Achieva was ending operations on Oct. 21. The lawsuit disputes that, saying the company “never abandoned operations” and had events and staff scheduled.

The filing further claims the state “launched a coordinated publicity and outreach campaign to smear Achieva” by issuing statements that the company had been removed from management, which Achieva argues were misleading.

Long History of Financial Struggles

Honey Creek Resort has faced financial issues for much of its existence. The $60 million project, championed in 2000 under then-Gov. Tom Vilsack, required an additional $33 million in state funds to pay off bonds before outside operators were brought in. Delaware North, the resort’s previous manager, ended its contract early in 2022.

The idea of selling the resort has been raised repeatedly, including in a recent state efficiency report. But federal ownership of the surrounding land by the U.S. Army Corps of Engineers prevents a sale to private buyers.

For now, the resort remains closed as the court weighs the dispute between the state and Achieva.