During a work session Oct. 5, council members discussed the possibility of funding the remaining portion with urban renewal bonds, which would be backed by the hotel's revenue.

"It could be a very good way to finance the last portion," City Administrator Kelly Hayworth said. "The reason it hasn't come up until now is that most people think when you have an urban renewal district, probably 97 percent of the time the urban renewal bonds are paid for by tax increment financing."

Hayworth said the city could issue an urban renewal bond that isn't backed by TIF.

The hotel and conference center will be owned by the Coralville Hospitality Corporation, a non-profit "63-20" corporation, with Mayor Jim Fausett as president.

According to the Federal Highway Administration, 63-20 refers to a section of the Internal Revenue Code that permits tax-exempt debt to be issued by a non-profit corporation acting on behalf of a state or local governmental unit.

In addition, 63-20 corporations are allowed to issue tax-exempt bonds to finance construction for various projects.

To govern this line of financing, the council is considering forming a hotel board that also would oversee enterprise operations.

One option identified is that the city could set up the 63-20 corporation as a board, similar in format to other city panels such as the library or telecommunications boards.

Hayworth said that it could be overwhelming for the council to adequately respond to the day-to-day details of the project.

"If we do not have a board overseeing the (daily) activities, especially during construction, I am concerned about getting the council bogged down with all the specifics," Hayworth said.

Council member John Weihe described the non-council members on the board who could provide expertise as "invaluable."

"It's getting to the part where we need to make decisions on a very regular basis," he said, adding that the board could help to inform the council and to make relevant decisions.

City officials hope to have a bid letting in November, and the facility is projected to open by spring 2006.

"Things are really starting to take shape," Hayworth said.