Home Back Issues July 2010 Once-golden destination resorts face uncertain future

Once-golden destination resorts face uncertain future

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Articles - July 2010
Thursday, June 24, 2010
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Once-golden destination resorts face uncertain future
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In the case of Bend, some say the surrounding mass of resorts is hurting the very city that was supposed to be helped. Clem says the first resorts did help the economy by bringing a lot of people to Central Oregon “and then they explored Bend. The second wave of resorts I don’t think has contributed positively to the economy. The resorts have become a competitor to Bend.”

Large or small, eco-minded or not, resorts will not drive rural economies, according to John McIlwain, who authored a report this year on housing in America in the next decade for the Urban Land Institute.

“This kind of tourist business does not produce high levels of economic growth,” he says. “The jobs generated by tourism are low; businesses are modest.”

Along with changing demographics and changing housing needs, “The U.S. economy is changing,” says McIlwain. “It’s an urban nation. We have to face the fact that rural areas will have modest economies. The reality is that you have limited options.”

Roger Lee, with Economic Development for Central Oregon, argues that the region has had successful job growth because of the resorts. “These resorts separate us from communities like Baker City,” which struggles to build its tourism. “It does matter if they succeed.”

To Gene Whisnant, the destination resort is an option worth saving. “We don’t have many industries left in Oregon. I think destination resorts — managed properly with the right guidance — work.”

Mike Hollern believes the resorts have been good for their communities but “what is the true impact? Those are unanswerable questions.”

Still, he says, resorts have “delivered on their promise to help rural Oregon.”

Whether they will continue to deliver on that promise is also a  question.


With Pronghorn and other so-called “stealth subdivisions” fresh in the mind of some members of the Dingfelder work group at its May meeting in Salem, the controversial question of whether residential units should even be allowed at future destination resorts surfaced. The sentiment was an about-face from previous legislative actions. In 2003, the Legislature changed statutory requirements to allow developers to build more homes and fewer overnight accommodations (2.5 residential units for every rental unit). Gov. Ted Kulongoski signed the bill, but expressed worry that the change was “not focused on tourism.” This was “before anyone had a clue as to what was coming,” says Erik Kancler, executive director of Central Oregon LandWatch.

It was a prescient concern. The Peterson report, which was presented to Dingelder’s work group, says profits from lodging, dining, golf, and other amenities and recreation activities are “quite modest.” Without robust home sales, developers say resorts aren’t financially attractive enough. They want them still, even though it could take years to clear the current glut off the market.

The Peterson report also says developers shouldn’t be forced into building more resort lodges because the Northwest is oversupplied with those, too, and floats the idea to allow “ultra-low-density community with limited amenities and perhaps with no traditional lodging.”

“So what’s the market? Overnights or second homes?” asked Jackie   Dingfelder during the meeting.

Linda Swearingen admitted she was stumped. “It’s a combination. But this market is so funny right now, it’s hard to tell what the future of a resort needs to look like.”

John McIlwain’s national study says that the second-home market will be weak for decades; younger boomers won’t be able to afford one and older boomers increasingly are interested in living in urban settings. Generation Y, the group coming up behind the boomers, will have little money for first homes, much less second homes.

And other factors weigh in. In Deschutes County, ground zero for second-home saturation in the state, the City of Bend wants to expand its urban growth boundary by 8,400 acres, with 500 acres of land for second homes. That would leave less reason to continue building second homes in destination resorts.

Jeld-Wen’s Jerry Andres minces no words. “The future of the industry is not growth. It will be managing what’s already on the ground,” he says. “And if you’re not already built,” he adds, “it’s not going to happen.”

The stalled Remington Ranch has every intention of building. In late May it filed its reorganization plan in U.S. Bankruptcy Court, seeking $35 million in new financing to finish phase one, which includes a golf course and 192 single-family homes.

 

0710_Resorts10
Chris Pippin, project manager of Remington Ranch, near Redmond. Pippin hopes for a spring 2011 sales push after bankruptcy reorganization.
OREGON BUSINESS PHOTO

Of course, the court has to approve the plan, and the housing market by many accounts has not yet reached bottom, but Remington’s Chris Pippin says his property is valuable and he’s hoping to wait it out. “Remington is a 20- to 30-year build-out,” he says. “Regardless of what happens, this project will get developed.”

It is an unwinnable argument as to who is right. Ultimately the market will decide which of the already-approved resorts will survive and the Legislature will decide the shape of future ones.

Dingfelder says she would like to find consensus in the work group about that future. Time will tell if that is even possible, given the dozens of different agendas and that the group’s recommendations still have to face the onslaught of special interests in the 2011 legislative session.

And after the legislators have decided and the developers have left, time will also tell if the rural grocery owner was helped or if rules and promises were again made to be broken.



 

Comments   

 
A. Kirk
0 #1 And history repeats itself...A. Kirk 2010-06-28 15:24:25
This reminds me of a TV show I saw on OPB not long ago where Christmas Valley was going to be all divided up into a beautiful resort/subdivis ion, etc. The developer flew people from California to the middle of the desert in planes and the people who bought places to live just about died the first winter because there was a horrible storm. It's practically a ghost town now. Sad how these things go... of course we're a little more modern and educated these days but not always. http://www.opb.org/programs/oregonexperiencearchive/reublong/book.php
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Susan Quatre
0 #2 Very accurate reporting of what's up with DRs in OregonSusan Quatre 2010-06-30 14:11:35
As a Deschutes County resident and a former county planning commissioner, I have seen the withering of the once valuable destination resort. I am very impressed with the breadth of opinion cited by Robin Doussard offered. Just one look at the map shown on page 3 or 4 shows clearly shows the perversion of what once was a great idea intended to bring visitors to Eastern Oregon. Greed took over and saturated the area with misuse of the laws intended to soften the blow of the loss of the timber industry.

No community can rely on one source of economic stability. Deschutes county and the cities within relied too heavily on the construction of new homes and "rural subdivisions" as its basis of growth. It had to come to an end. Had we instead looked to fostering eco-tourism and establishing laws that allowed for better use of the land that is often too poor for farming (events, weddings, RV parks), some degree of economic stability could be realized. I am in favor of the concept of small destination resorts but the last proposal I saw did not allow for RV parks. Recreation and eco-tourism should continue to be Eastern Oregon's goal: not rural subdivisions.

I searched and searched for the Christmas Valley report but could not find it. Any more specifics would be appreciated.

Thank you for the fine article.
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Brian
0 #3 Christmas ValleyBrian 2010-07-08 10:59:51
The Christmas Valley stuff was part of an OPB program on Reub Long. You can' watch it online here:

http://www.opb.org/programs/oregonexperiencearchive/reublong/player.php
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