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In the lakeshore market, if you don’t have a spare quarter million dollars for a starter cabin, then you’ve been relegated to renting one. But Mark Weber, a partner at Lakeshore Ventures, has a vision. It includes fun loving kids in water wings and practical thinking couples walking hand-in-hand along their shoreline at sunset.

Weber purchased Cokato Lake RV Resort in Cokato, Minnesota two years ago and has been testing a new business model that reaches the large, untapped market of budget conscious lakeshore buyers. By offering affordable cooperative ownership of lakeside parcels, his concept seems to be paying off.

Lakeshore Ventures converted the former RV Park from a privately owned business to a cooperative model. Now all 222-lot owners have an equal say in how their jointly owned property is managed. Also by pooling responsibility for the 60-acres worth of grounds and amenities maintenance, lot owners at Cokato Lake bypass much of the routine responsibilities and headaches associated with cabin ownership. “Owners get their lawns mowed, a slip at the dock that’s put in and pulled out each season and a heated swimming pool,” said Weber, who is conscious that even if a family can scrape together the cash for a cabin, they may not be up for the upkeep.

Another interesting aspect of cooperative ownership is the resort-style activities. In addition to the playground, mini-golf, tennis and basketball courts, the cooperative owners of Cokato Lake RV Resort have an activities committee. “There are events happening every weekend at the Campground. In the pavilion, we have bands playing or Karaoke. There is a movie theater with surround sound,” says Weber. “And there are always pot luck dinners. The sense of community is definitely an attraction.”

Changing marketplace affecting resort ownership

According to Weber, the traditional mom and pop-owned family resort is fading away. The economics of resort ownership are changing and causing RV parks and resorts to convert from rental to private ownership. Twenty-five years ago, in Minnesota, there were 6,000 resorts. Now that number hovers around 700. Escalating lakeshore prices are driving small operators out of business.

“When small, family-owned resorts come on today’s market, the value of the lakeshore is often greater than the value of the business,” said Robert Mueller, owner of Green Valley Resort on Minnesota’s Pelican Lake. Mueller has owned Green Valley Resort for thirteen years as a privately owned enterprise, but recently chose to parcel out and sell individual lots on his RV and cabin resort.

A couple of years ago, Mueller was looking for an exit strategy. He was getting too old for the intense 7-day workweek associated with running the resort. He also believed that the income from the business wouldn’t likely support the expense of someone buying and operating the resort. “If someone wanted to buy my resort – say a young family - they’d either have to come in with a huge down payment or a massive mortgage payment and hope that the resort’s income can keep up with the payments,” said Mueller. “The economics just didn’t support keeping it as a traditional cabin and RV resort. Converting these rental lots to an association and selling them off made the best financial sense.”

By creating an association of owners, each who owns 1/60^th of everything on the twelve acre resort, Mueller is able to help finance his retirement. He explained that like the family-owned farm, the family-owned resort is often pressured to go big or sell to the developer. “Minnesota’s traditional family-owned small resorts are truly an endangered species,” emphasized Mueller.

“This is a big trend right now,” said Jim Sladek, owner of Horseshoe Shores, an 11-acre RV resort he bought exclusively to convert from rental to private ownership lots. “Campgrounds and resorts are having a big problem with cash flow. These are seasonal businesses and as the land becomes more valuable it makes more sense to cash out on the value of the lakeshore,” said Sladek.

This new brand of privately owned RV resorts is creating win-win situations for both developers and lot owners. For $75,000 buyers can own a lot and a park-model [a stationary RV] with even a loft, with just a $37.00 a month association fee, which covers almost everything. “Look at the market right now,” said Lakeshore Ventures’ Weber, “there’s really no other option out there unless people are prepared to spend upwards of   $250,000 for a cabin . It’s no surprise that it’s gone over so well.”

Potential buyers are always interested in the particulars of the individual resort’s association and management, according to ReMax Realtor Warren Selix who sells the RV lots on Cokato Lake. “We’ve been selling the lots for two seasons, with 126 of the 222 sites now off the market,” said Selix. “This is a new concept and I spend a lot of my time educating potential buyers, but after awhile people understand that they’re able to get unbeatable amenities, reasonable prices, and are only a one-hour drive from the Twin Cities. This is simply a great value.”

Jason Amundsen is a freelancer based out of St. Anthony Village, MN.
Photo courtesy of Cokato Lake RV Resorts.