USDA Drops Funding for RV Resort Expansion

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December 23, 2009 by   - () Leave a Comment

Salmon Harbor RV Resort

Salmon Harbor RV Resort

Salmon Harbor Marina along the southern Oregon coast will have to find another source of funding for its proposed Phase III expansion to the Salmon Harbor RV Resort after the U.S. Department of Agriculture (USDA) rejected an application from the Port of Umpqua for funding of the estimated $5.5 million project.

In a letter dated Dec. 14 to the port, Clem Singer, Roseburg area director for USDA Rural Development, told commissioners “There remains some serious doubt” if the expansion could pay for itself, according to The Umpqua Post, Reedsport, Ore.

The expansion calls for 46 new campsites, a bathroom and a 9,576-square-foot community building. The latter would cost $1.8 million. According to an economic impact study prepared in 2008 by Portland-based ECONorthwest, that center could draw guests to the park during winter, a time of year that historically sees low usage from RVs.

The study said in its first year, the expanded RV resort is expected to make $426,855 and more each year after that.

Singer said the numbers didn’t add up.

“It’s not feasible. That building is not going to pay for itself. It’s just not,” Singer said.

Singer said USDA was not satisfied with ECO Northwest’s projections.

“The conclusions that they drew weren’t warranted, in our opinion,” he said.

USDA dropped the port’s application for a $5.9 million Rural Development loan after raising its concern with the Port of Umpqua and Douglas County Commissioners.

“We didn’t think it was the right prospectus for this project,” Singer said.

He said USDA also examined the occupancy earlier this year at Lakeside’s Osprey Point RV Resort, Woahink Lake RV Resort and Sea Perch RV Resort in Yachats.

Government agreement

Salmon Harbor Marina is managed through a government agreement between the Port of Umpqua and Douglas County, said Harbor Master Jeff Vander Kley, and had to apply through a “standalone” entity for USDA funding. Because it is not a standalone entity, Salmon Harbor cannot become a special district and tax for revenue.

Vander Kley said Salmon Harbor will have to become independent, but may look to the county for assistance.

“This effort to expand the RV resort was to reduce the need for the county contributions to the operations,” Vander Kley said. “It’s a big conundrum.”

Re-evaluating things

County Commissioner Susan Morgan asked the marina earlier this month to “re-evaluate” the findings in ECONorthwest’s analysis, Vander Kley said.

Marina project manager Linda Noel said the marina probably will plug updated cashflow information from the resort into the original report, while Vander Kley added that Salmon Harbor’s governing management committee may consider downsizing or phasing the project.

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