Honey Creek Resort operator alleges state-run smear campaign against company

The former operator of the state-owned Honey Creek Resort in southern Iowa alleges state officials have misled the public into believing the company acted negligently and withdrew from the financially troubled project.

Achieva Enterprises, the company that was hired by the state several years ago to operate and revitalize Honey Creek Resort, is suing the Iowa Department of Administrative Services and Iowa Department of Natural Resources in Polk County District Court. The company is seeking unspecified damages for the “abrupt and unlawful termination” of its concessionaire agreement with the state.

According to the lawsuit, DAS recently terminated its contract with Achieva without notice and in direct violation of the contract’s terms. “DAS then took extreme and disruptive actions, including shutting down the resort, firing over 50 employees, evicting guests, confiscating personal property, and making public statements that damaged Achieva’s reputation and business relationships,” Achieva alleges in its lawsuit.

The DNR, as the legal owner of Honey Creek Resort, “actively participated in the termination and transition process,” the lawsuit claims, adding that the two state agencies’ actions have “caused irreparable damage to Achieva’s business, reputation, and property interests” and now “threatens the continued viability of Honey Creek Resort as a public asset.”

The Iowa Attorney General’s Office declined to comment on the allegations.

Delaware North bails out of project

The origins of Honey Creek Resort date back to the 1950s, when the U.S. Army Corps of Engineers acquired extensive land holdings in Appanoose, Lucas, Wayne, and Monroe counties and began construction of a dam that created Rathbun Lake, a flood-control reservoir that was designed in part for recreational use.

In 2000, the Iowa Legislature and then-Gov. Tom Vilsack launched an initiative called “Destination State Parks,” which proposed the creation of a new resort at Honey Creek State Park on the shores of Rathbun Lake.

After an investment of $60 million that resulted in the creation of a 106-room lodge, 28 cabins, an indoor waterpark, an 18-hole golf course, and a marina, Honey Creek Resort opened to the public in 2008.

From the beginning, the resort struggled financially, and in 2013, the Iowa Legislature authorized a $33 million bailout to pay off the resort’s outstanding bonds.

In 2016, the DNR entered into a management contract with Delaware North Companies, a private hospitality firm. Under that agreement, Delaware North was to pay the state a portion of profits generated by the resort once annual revenue exceeded $7 million.

Over the next five years, annual revenues never reached the $7 million threshold, and in early 2022, Delaware North exercised an option in its contract to end its involvement in Honey Creek Resort.

Because the project sits on land leased from the U.S. Army Corps of Engineers, shutting down the resort was not considered an option since that move could force the state to dismantle the resort at additional public expense and then restore the land to its previous, natural condition.

Achieva takes over management

According to the lawsuit, Achieva’s owners, Beth and Terry Henderson, first became interested in Honey Creek Resort and its perceived untapped potential in 2019. The couple allegedly shared their ideas for revitalizing the resort at a meeting of PACT, or Promoting Appanoose & Centerville Together, that was attended by Gov. Kim Reynolds.

“The governor responded positively,” the lawsuit claims, “expressing that Achieva’s vision was exactly what the resort needed and aligned with her goals for revitalization. She asked the Hendersons if they would be interested in helping run the resort with plans to move toward privatization. She also expressed that the state did not belong in the resort business.”

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Achieva was then selected by the state to run the resort. The lawsuit alleges that after Achieva “inherited a resort in disrepair — physically, financially, and reputationally,” it quickly began renovating cabins and the lodge, and adding attractions such as a miniature train and horse-drawn carriage rides.

According to the lawsuit, the resort generated significant sales tax revenue for Iowa and created 50 to 150 new jobs. “Profit margins were razor-thin — near zero — but Achieva believed in its business plan to transform Honey Creek,” the lawsuit alleges.

In late 2024, Achieva and DAS entered into a contractual amendment to provide the company with some temporary financial relief as the company worked to improve its operating margins. That amendment temporarily waived Achieva’s obligation to deposit 5 percent of its gross monthly receipts into a state-created fund, enabling Achieva to use that money for operating expenses such as audits and insurance premiums.

“DAS knew Achieva was successfully stabilizing and revitalizing Honey Creek Resort, because Achieva consistently submitted monthly and annual reports to DAS,” the lawsuit alleges. Despite this, DAS allegedly “micromanaged Achieva’s operations down to trivial details — such as paint color selections — while failing to provide meaningful support.”

The lawsuit also claims DAS repeatedly changed the state personnel who were assigned to the resort, and placed in key roles certain individuals who lacked the authority to act on proposals. “For example, DAS appointed Ryan West as project manager, yet he consistently informed Achieva that he had no authority to approve decisions, rendering meetings with him ineffective,” the lawsuit states.

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Lawsuit alleges state-run smear campaign

In April 2025, following DAS’ failed attempt to give the resort to Appanoose County, DAS “abruptly ceased communication with Achieva,” the lawsuit alleges.

On Oct. 29, 2025, without warning, DAS sent a contract-termination letter to Achieva and then “took extreme and punitive actions” — shutting down the resort, barricading its entrances, and sending home “over 50 employees without notice, destroying livelihoods,” all while falsely claiming Achieva had abandoned the property, the lawsuit alleges.

The lawsuit claims that DAS then launched “a coordinated publicity and outreach campaign to smear Achieva,” issuing press releases and social media posts falsely portraying “Achieva as negligent and unfit” to run the resort.

“Contrary to DAS’ claims, Achieva never abandoned operations,” the lawsuit claims. “In fact, it had reservations booked and food purchased for an upcoming banquet on Halloween weekend as well as a Thanksgiving banquet. It never sent staff home, never closed the resort, nor took any other steps to suspend, terminate, or abandon its business.”

According to the lawsuit, it was state officials who evicted guests mid-stay, “causing humiliation and chaos,” and who handed out Terry and Beth Henderson’s personal cellphone numbers to angry guests.

On Nov. 3, 2025, DAS allegedly issued a notice to Achieva demanding that within seven days the company transfer 5 percent of its gross monthly receipts for the period from November 2023 through December 2024 to the state.

The lawsuit alleges breach of contract and seeks a judgment declaring that various items Achieva purchased with its own funds — buildings, equipment, vehicles, and taxidermy — should remain with Achieva.

On Monday, a Polk County judge approved portions of Achieva’s request for an immediate temporary injunction in the case. The injunction bars the state and its agents from either reopening the Honey Creek Resort to the public or hiring a new third-party operator to manage the resort while the lawsuit moves forward in court.

The injunction also blocks the state from making any further improvements or alterations to the site beyond routine maintenance, sanitation and security, while the case is pending.

This article was first published by Iowa Capital Dispatch.