May 27, 2006 - After nearly three years of planning, developers of Cascade Highlands destination resort plan to break ground next week on the high-end development west of Bend.

Arrowood Development LLC of Bend, owned by Don Bauhofer and John Lietz, on Friday finalized their purchase of 700 acres of land for $31 million.

Arrowood will begin building an 18-hole championship golf course next week that is slated for completion in spring 2008.

The land is the site of the Awbrey Hall Fire of 1990.

In addition to the golf course, the property will include a members' clubhouse, 150-room four-star hotel with adjoining 50 high-end cabins available for overnight rentals, a spa, restaurant, meeting space, 260 single-family homes and 210 townhomes.

The resort's developers are counting on a location close to downtown Bend and Central Oregon's hot destination resort sales market to fuel sales.

"Bend has naturally developed into this wonderful small resort community with visitors from all over the U.S. and beyond," Bauhofer said in a written statement. "The only thing that's been missing is a destination resort. Our goal is to bring a top-caliber resort that not only visitors can enjoy, but also our community as well."

The resort will launch its home sales next spring when 260 lots ranging from just more than 1/3-acre to 3/5-acre become available to a mix of builders and individuals.

"The price is too early to tell," said Femke van Velzen, Arrowood's director of marketing.

She projected that the lots' valuation would be closer to Broken Top than Pronghorn, but it's too early to tell.

Broken Top recently recorded lot sales averaging $450,000 and Pronghorn recently recorded lot sales averaging $800,000, according to Linda Swearingen, a consultant for several resort planners in the area.

By comparison, Caldera Springs, Central Oregon's newest destination resort adjacent to Sunriver, sold 203 of 206 homesites during a two-day sales event in December for between $235,000 and $475,000 for lots ranging from 1/4-acre to more than 1 acre, according to a written statement from Sunriver Resorts, which is developing Caldera Springs.

Another destination resort in Powell Butte, Brasada Ranch, experienced similar brisk sales last June when it sold out 200 lots in a single weekend priced roughly between $200,000 and $450,000. In October, the resort quickly sold its entire stock of 57 cabins ranging in price from $450,000 to about $700,000.

Swearingen does not see any cool-down in Central Oregon's destination resort market.

"There's an increased demand for high-income lots in Central Oregon," she said. "I expect (Cascade Highlands) to do very well when they begin selling their lots."

Van Velzen said Cascade Highlands' build-out is difficult to predict.

It depends on the market, she said.

Cascade Highlands' golf course will be designed by David Kidd, the architect of the highly regarded Bandon Dunes Golf Resort on the southern Oregon coast. It will only be open to the resort's residents and guests, but Van Velzen said the public would have access to the hotel, restaurant, spa and trails.

Arrowood has worked with Central Oregon Trail Alliance for the past 18 months to ensure connectivity between downtown and U.S. Forest Service land while the site is closed to the public for safety reasons.

"Once the resort is completed, there will be ample paved and unpaved trails," Van Velzen said.

Arrowood bought the Cascade Highlands property from Joseph E. Weston of Portland, who is the former owner of Broken Top Club adjacent to the Cascade Highlands property. Arrowood also bought Broken Top for $9.2 million last May.

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