Upscale Montana RV Resort Back on Track?
A bankruptcy judge is expected to a confirm a debt settlement plan for a Red Lodge, Mont., real estate developer that banks on money generated from leasing lots in a planned luxury RV resort, according to the Billings Gazette.
U.S. Bankruptcy Judge Ralph B. Kirscher offered oral approval of the reorganization plan for Jeanne Rizzotto in court Tuesday (March 9), according to one of her attorneys. Written confirmation of the plan was expected Wednesday.
“I’m back,” a gleeful Rizzotto said Wednesday.
Rizzotto declared bankruptcy in May. She was facing a long list of lawsuits and debts totaling more than $5 million.
Under the reorganization plan, she will attempt to pay her creditors with revenue from a proposed high-end development for million-dollar motorhomes. Known as the Of Course RV Resort, the project would sit on 190 acres just north of Red Lodge and feature a nine-hole golf course designed by Robert Trent Jones II.
Despite the economic downturn, Rizzotto expects the development to bring in about $10 million in its first year through the sale of 99-year leases to semi-retired wealthy Baby Boomers.
“You’re dealing with a different clientele that is generally insulated from the consequences of the recession,” said Rizzotto’s special counsel, Rob Stephens.
The total cost for the lots in the subdivision would run between $159,000 and $400,000, depending on size and proximity to the golf course.
Rizzotto said she has 196 reservations from people who have expressed interest in making the initial leasing payment of $50,000, and nine of those clients signed agreements to proceed if the bankruptcy was settled.
“They wanted to make sure that there was a project moving forward,” Rizzotto said.
Rizzotto owes about $369,000 to the Bank of Red Lodge, and nearly $1.9 million to Beartooth Bank, along with other debts.
The Red Lodge developer said she plans to seek debtor-in-possession financing, along with credit from other sources, to help pay for the new subdivision’s construction. Under debtor-in-possession financing, a person or corporation that has filed for bankruptcy remains in possession of property.
Projections put the cost of the resort at nearly $46 million, and forecast a final value exceeding $60 million.
The subdivision is intended to offer a summer haven for “land yacht” owners who like cooler temperatures. Because there’s nothing else like it in the Rocky Mountains, Rizzotto said, she expects the leasing to proceed smoothly.
“This is the easy part for me,” Rizzotto said. “This is what I’m good at — selling.”