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Debate on Central Oregon Destination Resorts Get Mixed Reviews;
Jobs, Taxes vs Water Usage and Fragmentation of Winter Range Habitat
By Anna Sowa, The Bulletin, Bend, Ore.McClatchy-Tribune Business News

Apr. 16, 2007 - Twenty to 30 years ago, destination resorts were few and far between in Central Oregon -- a time when economic development officials say the expensive projects lost money. Now, the major developments are hard to miss in the tri-county region, where five of the state's eight resorts exist.

With more resort communities expected to spread over the sagebrush and juniper landscape, critics say the resorts diminish the area's environment and stress utility and transportation systems.

Some economists and developers, however, say they generate commerce, jobs and tax revenues.

The Oregon Employment Department recently studied the economic impact of Central Oregon's five established destination resorts:

Eagle Crest Resort west of Redmond,
Pronghorn northeast of Bend,
Brasada Ranch near Powell Butte,
Sunriver Resort south of Bend and
Black Butte Ranch west of Sisters.

The study was based on 2005 data, the most recent available.

The report determined that the five resorts have a major effect on Central Oregon's economy -- from employment and payroll to surrounding communities and enterprises.

The five Central Oregon resorts employed almost 2,100 workers in 2005, roughly two-thirds of all the state's workers in the resort industry, the report said. They also accounted for $54.3 million in payroll in 2005, slightly more than two-thirds of the industry's total. "When it comes to pay, Oregon's eight destination resorts outpace the industry average," said Steve Williams, regional economist for the Employment Department and author of the report.

In 2005, destination resorts paid an average salary of $26,132 per year, according to Williams. That is 73 percent more than the average pay for the broader leisure and hospitality industry, which is $15,099.

However, destination-resort employment is seasonal, Williams added, with Oregon resorts employing about 30 percent more people in July and August. And pay still lags behind the statewide average in all industries by about 30 percent, the report said.

The hospitality industry typically has lower wages, Williams said, because it employs many service-level workers. Total average pay in Oregon for 2005 was almost $36,600, according to the report, and has outpaced destination-resort pay for the past few years. The largest group of resort workers is in food and beverage operations and maintenance, Williams said, jobs that tend to have lower wages.

All Central Oregon resort representatives say they study wage comparisons in Central Oregon, working to offer competitive wage and benefits packages to lure and retain workers in a tight labor market.

A few examples:

--At Pronghorn, 186 employees work at the resort, with a projected August total reaching 250 employees for the summer season, said Tom Hix, managing partner of Pronghorn Investors LLC. Since it opened three years ago, Pronghorn's employee salaries have increased by about 12 percent across the board, Hix said.

Pronghorn has 109 employees working in services and maintenance who make $9 to $18 per hour, Hix said, excluding tips for food and beverage employees.

--At Black Butte Ranch, General Manager Loy Helmly says the resort, which is not a destination resort under state land-use law, employs 125 year-round employees, adding 225 additional employees in summer. Workers make minimum wage, plus tips, up to $18 per hour, depending on the position and experience.

--Eagle Crest employs approximately 250 people in the winter months, swelling to 375 in the summer, said Janet Hardwick, director of employee services at the resort. Workers in housekeeping and maintenance can make $8.50 to $24 per hour, depending on experience.

--Sunriver employs 500 people in the winter and 900 in the summer, said Brian Hughes, general manager at the resort. An entry-level service position in room cleaning pays $9 to $14 per hour, he said, depending on the employee's performance.

The state is expected to see five new destination resorts in Central Oregon in coming years, Williams said, along with expansions of Pronghorn and Brasada.

Jefferson County has revised its comprehensive plan and zoning ordinances to allow for destination resorts on land in and adjacent to the Deschutes National Forest's Metolius Conservation Area. Legislation introduced earlier this month, however, would prohibit resort development withint a three-mile radius of the Metolius River Basin, nullifying the new Jefferson County resort map. 

A critical eye

Critics of destination resorts believe the employment data is misleading because it doesn't tell the full story of resorts' impact.

Williams used average wages in the study, which skews the data higher because it takes into account top executives, says Carol MacBeth, Central Oregon advocate for 1000 Friends of Oregon. Additionally, she said the report only told one side of the story.

"The (report) doesn't discuss the negative impacts (these resorts) have on the area, such as water usage and the fragmentation of winter range habitat" for wildlife, MacBeth said. "We think that because 50 percent of the resort jobs are in very low-paying jobs of food service, the burden is placed on the community to supply affordable housing." Additionally, destination resorts typically are well removed from the largest cities, making transportation another cost employees bear, MacBeth said, adding that more driving feeds road congestion.

She acknowledged that some resorts, including Sunriver, help employees commute to work by offering cheap shuttles or carpooling incentives.

Still, MacBeth questioned whom the resorts benefit.

"I think it's important to say that Central Oregonians are looking for higher-wage employers," she said.

Destination resorts bring new residents and visitors to Central Oregon, a trend that economist Williams says is going to increase as the resort industry grows. As a result, the resorts affect surrounding businesses, most notably other restaurant and recreational services.

The Employment Department report showed how the eight Oregon resorts are some of the largest contributors to their home counties' property tax base. The land value typically increases because of the resort, Williams said.

Property and room taxes collected from resorts are a major financial contribution to counties, Williams added. In 2005, Deschutes County generated $6.4 million in room-tax receipts, according to the Central Oregon Visitors Association. Those taxes come from all overnight lodging establishments, Williams said, and some taxes originated at the county's destination resorts.

In the 2006-07 tax year, the eight Oregon resorts paid more than $2.8 million in county property taxes, or roughly 0.7 percent of their counties' total tax bill. In Deschutes County alone, Williams said, the four destination resorts paid more than $1.8 million in property taxes. Additionally, three of the resorts are on the county's list of top 10 taxpayers: Pronghorn Investors LLC, No. 3; Eagle Crest Inc., No. 5; and Sunriver Resort Limited Partnership, No. 7.

Pronghorn's Hix said the resort paid $750,000 in property taxes in 2006.

It is these contributions that Roger Lee, executive director of Economic Development for Central Oregon, believes support the development and expansion of destination resorts in the High Desert.

"Our prospective is that destination resorts are a means to an end, but not the end itself," Lee said. "They are very successful in exposing, especially to business people, this area."

The recent spike in resort interest comes, in part, from Oregon's strict land-use policy, which restricts residential development to inside urban growth boundaries, Lee said. Destination resorts give developers a way to create a community with housing outside city limits.

"Some people say all (destination resorts) are is subdivisions in rural areas," Lee said.

"In some respect, it is a response to the marketplace."

Lee thinks the interest in resorts is a result of too little land for development inside (Bend's) urban growth boundary. It becomes so expensive to build inside the city limits that it makes more sense for resorts to develop their own septic and water systems outside the urban area, where land is cheaper, Lee said.

Erik Kancler, executive director of Central Oregon Landwatch, hopes developers, government officials and Central Oregon residents study all impacts of the resorts before supporting more of them.

"Everyone knows resorts provide a certain amount of jobs and revenue for the county," Kancler said. "But the other side of the coin is the idea of impact... Without examining the impacts, will it be good for the area?"


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