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Destination Resorts 2.0

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Ready to build: A new hotel will break ground at the Pronghorn Resort this summer.

Spencer Schaub, general manager at Pronghorn, a 640-acre community northeast of Bend that opened in 2004, is working on that vision. “Our initial focus was on the development of real estate,” says Schaub. But over the past couple of years, the focus has shifted to amenities and overnight lodging for short term guests. “We will continue to add more amenities to the property, to become more a resort than just a private, residential golf community.”

State and Deschutes county laws require destination resorts to build one overnight lodging unit, a hotel room, for example, for every 2.5 individually owned home lots. But during the recession, many resorts put plans for new hotels and other public amenities on hold — after applying for and receiving extensions with the county.

The result is what Paul Dewey, executive director of Central Oregon LandWatch, a watchdog group, refers to as “zombie subdivisions.” Developers planned for and built resorts, he says. “But because it’s a high risk idea and doesn’t come to fruition, what you’re left with is a subdivision.”

Emboldened by record numbers of tourists, developers who struggled during the downturn now aim to activate resort properties by moving forward with public accommodations. According to the Central Oregon Visitors Association, tourism in the area is in its third straight year of consecutive growth and is setting new records for visitor volume and revenue. The region now welcomes 3.8 million overnight visitors annually.

The number of rental night stays at Pronghorn, which restructured several times during the economic downturn, increased by 80% this past year, says Meredith Strodel, a public relations representative. The resort will break ground on a long awaited $20 million hotel  and spa this summer, with completion slated for summer 2016.

A Pronghorn resident, Tebbs says that resort is still working through its relaunch. Pronghorn has built 60 homes since opening. Three new homes are under construction.

Tetherow has already built significant new rental accommodations — in the form of a new hotel that was completed last year. A second restaurant opened in 2013. In the past 12 months, Tetherow has sold 38 homes and townhouses, priced between $800,000 and $2 million. Home sites are selling for $200,000 to $400,00. That’s below the peak prices of the boom, Tebbs says, but up 35% from the bottom.

Located on the edge of Bend’s urban growth boundary, Tetherow’s development trajectory also hints at a new stage in the evolution of the destination resort. Unlike outlying resorts that attract second home owners, many Tetherow residents are executives living and working year round in Bend, says van der Velde: “business, tech guys, doctors, lawyers.” He says the location, the national forest on one side and the city on the other, is a draw for young professionals. “We don’t have to create amenities,” van der Velde jokes. “We have Bend.”

Destination resorts were conceived 40 years ago as a way to expose tourists and prospective business owners to the region, says Roger Lee, executive director of EDCO, Central Oregon’s economic development agency. The gamble paid off. “Resorts became a path to economic diversification, not only with the direct employment that they generated, but by expanding opportunities for development and growth in other industries.”

No longer a haven solely for retirees or ski buffs, Central Oregon has become a hub for aviation/aerospace, high technology, biosciences, outdoor recreation gear and apparel, brewing and distilling and advanced manufacturing businesses. What’s more: executives running those businesses now appear to be creating a resort model in their own image. Hence Tetherow, a destination van der Velde describes as an “urban resort,” a place where work and recreation intersect.

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