Oregon Public Broadcasting

In the last several years high-end resort communities have sprung up across the West.

Many rural areas were hoping it would give them an economic boost. But those destination resorts are suffering big time under the housing slump and credit crunch.

Vast tracks of land sit idle without buyers. Resort club houses are “closing for the winter." And several developments are trying to fight off foreclosure. Richland correspondent Anna King reports.

Charlotte McGinness is a Realtor for Zillah Lakes -- a second-home development just east of Yakima, Washington. She’s eager to point out all the special features of this lake-side home she’s selling.

Charlotte McGinness: "Because we are in wine country we have a wine cooler. So this is a temperature gage for both whites and reds so you can put everything in one area."

McGinness says the developers plan to put in a 9-hole golf course here. They’ve already built a 17-acre lake with tentacles that stretch to as many houses as possible.

McGinness whisks me from room to room in a Champagne level house which means it’s top-of-the-line.

Charlotte McGinness: "We have natural gas, fiber optics, but we also have cable out here. So we pretty much have everything that you could want ...."

Still, owners of this resort have 650 homes to sell. So far, they’ve sold about 20. And many of those sales have been to McGinness’ own friends and family.

Charlotte McGinness: "I’m committed to it. Otherwise my dear mom wouldn’t be buying here if I didn’t think it was a good place to buy. And my sister wouldn’t be buying here if I didn’t think it was a good place to buy. And my boyfriend wouldn’t be buying here if I didn’t think it was a good place to buy."

Talking with McGinness you’d never know that the country is suffering from a huge housing slump, credit crunch and looming recession. But resort communities across the West are showing real signs of stress.

From Colorado to Oregon chalets stand empty, resort hotels are closing down and large developments are in jeopardy.

These resorts were begun in happier times: Well-off Baby Boomers were looking for vacation homes. Getting credit was easy and there was a huge rush in real estate investment.

Gregory Kolb is a resort development research analyst based in Colorado. He says the second-home market was oversaturated and now those once numerous buyers have gone away.

Gregory Kolb: "While there would have been demand two years ago, there isn’t any anymore. Because people who might have bought that stuff don’t qualify can’t get that lending so they can’t buy. And that’s where you see people left with this glut of development."

Developments like these: Tamarack near Boise might not survive the ski season without financial help.

The Vineyards in Yakima’s wine country is fighting foreclosure.

Suncadia resort near Cle Elum, Washington recently laid-off workers and closed its inn until Spring.

Pronghorn Resort near Bend, Oregon has also laid-off people, closed its Bend sales office and reduced its winter operations.

And Moonlight Basin Ranch in Montana is battling rumors of bankruptcy.

Steve Robertson: "It’s the worst."

That’s Steve Robertson, the developer of Illahee resort in Walla Walla. The project is now on hold, after millions of dollars were invested.

Steve Robertson: "You would be silly to move forward in that environment building up additional financial obligations that there are no buyers for because there is no lending capacity at the bank level even if they wanted to buy your house, the banks not going to help them do it."

Under Robertson’s bank agreement he has three years to ride out the economy – then he must build. But for other developments already under construction, there are few options.

If they can’t sell homes, then they face foreclosure. But analyst Kolb says that means the creditors are stuck with the problem.

He says there are few investors who want to buy these half-done projects and even fewer who can get large sums of credit to do so.

Gregory Kolb: "When you hear that someone like AT&T or GE, who are very highly rated companies, are having trouble accessing short-term credit markets and credit markets in general then you know there is a big problem across the board. "

But back in Zillah, Charlotte McGinness keeps her golf cart at the ready to tour people through Zillah Lakes. For now, she’s keeping positive.

Charlotte McGinness: "We’re in a cold right now. That’s what I think recessions are, it’s just a cold ... we’ll get better."