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Crittenden Resort Report ™ Crittenden Research, Inc. P.O. Box 1150 Novato, California 94948 Customer Service (800) 421-3483 Vol. 15, No. 22 September 14, 2009 OENOPHILES AND FRACTIONALS: A GOOD BLEND Vineyard tourism grows in popularity and developers such as Bellstar, Olympus Resorts, Timbers Resorts, David Wilhelm, Olympus Real Estate Partners and Palmer Property Development look to harvest buyers with their luxury fractional resort properties located among the vines. From Napa Valley to Tuscany to the Okanagan Valley in Canada, these developers hope affluent oenophiles will jump at the chance to own a fraction of a residence in an exclusive vineyard region. Bellstar, which has three vineyard resorts underway, looks selectively for other opportunities in California and Washington State. Timbers nurtures its two vineyard resorts in Napa and Tuscany and eyes future locations for development as well, while Wilhelm finds sweet success with his private Mayacama club in Sonoma County, Calif. Olympus Real Estate Partners sees sales picking up slowly at its Calistoga Ranch in Napa Valley, while Cynthia Palmer struggles with sales at her fractional property Ranch on Soda Rock, so she changes up strategies before developing her next vineyard property. Surveys of fractional and destination club owners show a strong desire for vineyard locations, pushing developers to find places to plant these luxury developments. With zoning for development in vineyard regions typically very restricted, limiting the number of units, high-end fractionals are the best option for generating revenue. With so much demand and so little supply, a lot of the problem lies in getting vineyard owners to buy into the idea. The deals can work well for vineyard owners, as many of them are asset rich but cash poor. There are numerous cross-marketing opportunities for wineries and resorts with vintner club memberships that allow fractional owners access to vineyards that are off limits to the average consumer, while wine sales get a bump as fractional owners come in during off-peak seasons. It’s also a great way for vineyards to grow their brand with qualified buyers. About five million people visit Napa Valley each year, second only to Disneyland as the most popular destination in California. About 50% of those visitors have incomes in excess of $100K and spend about $230/day per person. Developers in the Okanagan Valley in British Columbia hope to capitalize on the $2B culinary and agri-tourism industry. Nothing like Napa Valley, the Okanagan Valley is a desert oasis that has become a large wine growing region. It boasts a prime location between three major markets, Seattle, Vancouver and Calgary. The valley features more than 60 wineries, in a four-season destination with boating, snow sports, biking and horseback riding. Kelowana, the gateway city into the valley receives about 1.2 million visitors a year, spending about $346M (CAN). Opportunities abound for future North American vineyard resorts as well, with several more prime locations in California open such as Temecula, Mendocino, Paso Robles, Santa Barbara, Santa Clara and Santa Cruz. Oregon and Washington State are also growing in wine production in the U.S. Add to that international destinations such as Tuscany, Australia, Spain, France, Argentina and New Zealand, and vineyard fractionals have optimal room for growth. Timbers sees sales picking up in the last six weeks at The Orchard at the Carneros Inn in southern Napa County. Of the $29M in real estate that Timbers has sold overall this year, the Orchard is responsible for about $1.2M, and another 4 sales are planned to close soon. Over the winter, Timbers only had one sale but the company is definitely seeing movement now. CEO and Founder Dave Burden credits sales to the product and the region, knowing that drive-to locations are going to lead the road to recovery. Keep an eye on Timbers doing another resort in the area. The Orchard offers 17 two-bed, two-bath cottages with about 1,750 s.f., including the private outdoor areas. Pricing starts at about $299K and annual dues run $8.1K for 1/10th (four weeks). PlumpJack manages the resort, which sits among 27 acres of grapevines, farmland and apple tree groves. The location is easily accessible at the bottom of valley between Napa and Sonoma. For the first year, Orchard owners receive a complimentary membership in The Vintner's Collective, a collection of some of Napa's most sought after boutique wines. Membership includes discounts, first offerings, private event invites, release parties, tastings and wine recommendations. Continued on Next Page Quotation not permitted. Material may not be reproduced in whole or in part in any form whatsoever. Copyright © 2009 Crittenden Research, Inc.

Crittenden Resort Report™ OENOPHILES AND FRACTIONALS: A GOOD BLEND… Continued from Page 1 At Timbers’ Castello di Casole in Tuscany, Burden is more than content with the 5 sales in the last few weeks. The resort mainly lures U.K. and U.S. buyers, but is seeing an increase in European purchasers as well. Sales are credited to the unique one-of-a-kind property, where Timbers has restored 13,300- to 400-year-old farmhouses, as well as reinventing the castle to a 41-room high-end boutique hotel that should be complete next summer. The 4,200-acre PRC will be sold in 1/12ths for about $600K or $6M to $8M for a whole villa. More than 14,000 bottles of wine will be bottled for owners with the Private Reserve Dodici label, and not commercial use. Usage plan is unlimited with booking by space available. Olympus Resorts, DCP International and Bellstar work on establishing The Reserve Collection (TRC), which focuses on developing relationships with vineyards where they can develop homes, fractionalize them and share in the profits. TRC does things a little differently than some of the other models, as the group wants to partner with vineyard owners and share profits. Scott Jordan of SJ Associates, believes partnering with wineries is a win-win situation for the vineyard owners. It offers them the opportunity to monetize under-utilized acreage, profit participation (projected to be $830K/home), no cash outlay for the development, retained ownership and control of vineyard and winery, professionally managed development and operation, and shared liability and managed risk. TRC will establish The Vintners Club for its members, which will give host wineries a chance to generate revenue by offering exclusive experiential benefits. Several vineyard owners that had committed to the partnership last year, got nervous in the downturn and backed away until some recovery is seen. Jordan tackles a new strategy during the economic stalemate and goes to the vineyards’ main issue of selling wine. Jordan spearheads efforts to help export Canadian wines to the U.S., and is working on opportunities do some branding for the 2010 Vancouver Olympics, as well as Chicago’s bid for the 2016 summer games. TRC’s ultimate goal is to get back into the market and sign up vineyard partnerships like originally planned once things turn around. Bellstar’s Spirit Ridge Residence Club in Osoyoos, B.C., almost sells out its completed second phase of 130 one-, two- and three-bedroom luxury suites and villas. There are about 13 one-quarter shares left of 904 (226 units) at the Spanish-inspired resort. About 540 of those shares were sold over the last two years. Shares start at $100K. EVP Jon Zwickel credits selling through the recession due to the company’s campaign to maintain communication and involvement with prospective buyers to make them feel a part of the resort, which minimized rescission rates. NK’MIP Cellars winery, the first North American aboriginal winery, is adjacent to the property for tours and tastings. The project is a partnership between Bellstar and the Osoyoos Indian Band and part of the Spirit Ridge Vineyard Resort and Spa. The next phase, which features 37 two-bedroom, 1,250-s.f., casita-style residences should go on the market within the next 30 days. Pricing will start at about $498/s.f. ($550/s.f. CAN) and shares may run in 1/8ths instead of 1/4ths. The residence club is part of the NK’MIP destination resort, and adjacent to amenities including the NK’MIP Desert and Cultural Centre and the Sonora Dunes golf course. Bellstar also prepares for its third vineyard resort with the $150M Canyon Desert in Oliver, also in Okanagan Valley. The master-planned, fully integrated community will be surrounded by a 40-acre vineyard and built around the18-hole NK'MIP Canyon Desert Golf Course and on Tuc el Nuit Lake. There are more than 50 wineries in Oliver. The project is in the entitlement phase, awaiting land-use approval that could be received in the next 60 days. Canyon Desert is planned for 450 units and a 125-suite condo hotel. Real estate sales could begin next spring, with development soon after. The first phase should be completed by the fall of 2011. Both whole ownership and fractionals will be offered. The project is a partnership between Bellstar, the Osoyoos Indian Band and Watermark Asset Management. Calistoga Ranch, an Auberge Resort, has several fractionals in escrow and Director of Marketing Erin Dempsey sees things picking up steam at the Napa Valley property, which was developed by Olympus Real Estate Partners and Criswell Radovan. In keeping with the heritage of the Napa Valley, wine is a primary focus at Calistoga Ranch. There is an on-site vineyard and guests are able to share in the process of winemaking by learning the art of pruning, joining in the harvest and the crush. Calistoga also plans to create an easily accessible path next year for guests to be able walk through the vineyard without a guide. Calistoga has about 50 exclusive wineries participating in its vintner club as well. The program is beneficial for both sides, as the resort and wineries share the same guests and each provides well-qualified sources. The ranch will also have its own estate wine this year for guest consumption. The resort started sales in 2005, and about 40% of the 1/10th shares have been sold. Continued on Next Page Quotation not permitted. Material may not be reproduced in whole or in part in any form whatsoever. Copyright © 2009 Crittenden Research, Inc.

Crittenden Resort Report™ Page 3 OENOPHILES AND FRACTIONALS: A GOOD BLEND… Continued from Page 2 About 50% of Calistoga Ranch’s buyers come from Northern California. Pricing starts in the $475K range with annual dues of about $13K. The 25 ownership lodges run from 600 s.f. to 2,400 s.f. for one- and two- bedroom units. The 46-room hotel sees an increase in occupancy for September and October and has started booking groups for next year, a very good sign for the luxury property. ADRs run about $1K, down just a smidge from the $1.1K last year. Director of Sales and Marketing Julie Baker finds some success with value-add deals such as stay two nights, get one free, and offers of spa credits and things like that to make rates go further. The members-only Mayacama sees several sales in the last few weeks at its swanky private club in northern Sonoma County, Calif. David Wilhelm, who is also responsible for Roaring Fork in Colorado and Club at Cordillera in the Vail Valley, started Mayacama as a private golf/wine club, for golf and wine purists. Add-on reciprocal memberships are offered for members of the three Wilhelm-owned clubs ranging from $10K to $65K. Expect an announcement in a week or two for a new development in the Hawaiian Islands as well. The 700-acre Mayacama, which took almost 20 years to get entitlements, now features 31 casitas and villas for fractional ownership, as well as 31 wholly owned residential lots and a Jack Nicklaus-designed course. Mayacama’s vintner club has 30 highly esteemed winemaker members that will grow to about 36. Those wineries get into the club at a preferred rate, while Mayacama members receive the equivalent of a barrel of wine from vineyards as well as invites to special events. Director of Marketing Art Buck hasn’t seen a lot of softness in pricing in the region with Mayacama’s one- to three-acre lots still going for $1M to $1.3M. Mayacama sold all the lots in 2001, but the club bought some back in the last two years to build spec homes. Now they are releasing those 6 remaining lots for sale. The casitas, which are 840-s.f. one-bedroom residences with a kitchenette run for $225K for a 1/10th share (35 nights). About 85% have sold. The three-bedroom villas (2,700 s.f.) feature indoor/outdoor living, and cost $325K. Annual dues are $8.4K for the villas, which are sold as they are developed. Five have been built and the fifth is almost sold out, so look for the sixth villa to start construction soon. Cost of club membership for locals is $190K and for members outside a 150-mile radius its $125K. Villa and casita rentals are available to club members only. Developer Cynthia Palmer halts sales of her fractional product Ranch on Soda Rock in Healdsburg in Napa Valley, and instead opts to market it for whole ownership for $2M to $2.5M (with furnishings). Palmer sold 4 fractional contracts in her first two weeks, but all four pulled out when fall 2008 hit. Palmer now sees interest from several whole ownership buyers, with three interested parties contacting her in the last two weeks. One of the prospective buyers may try to fractionalize themselves, as the purchase will include all the legal work already done by Palmer. The change in strategy has nothing to do with Palmer’s lack of confidence in the property, but more from a desire to move on. She’s been marketing the home, vineyard and onsite winery for a year, and she’s ready to start her next venture in Alexander Valley, which will likely be another fractional project in the same region with a different style house. Palmer has kept her head above water on the ranch by using it for vacation rentals that run $695/night to $795/night for four to six guests at the 2,400-s.f. three-bedroom ranch house. RESORTS PLOW AHEAD With the upcoming ski season on the horizon, resort owners map out different trails to success for their resorts’ respective futures. Sun Valley Co. and Schweitzer Mountain prepare for the next decade with new development. Rumored sales and bank takeovers also hit the slopes, with Four Seasons Vail switching hands, and gossip of other resorts, such as Peaks Resort being eyed by investors. Northridge Capital LLC and Chisa Resources bring on new management to help navigate the downward slope expected ahead. Ski visits declined 5.5% to about 57 million this year, down from the record 60 million in 2008, but optimists point to the fact that it was a 3.8% rise from two years ago. Revenues were down 10% to 15% this year, and many industry insiders expect that decline to be greater over the next few years, as season passes were bought in the summer of 2008 before the economy really tanked. Drive-to and small regional resorts are likely to continue to fair better than destination resorts, as consumers keep a close eye on their pocketbooks. Continued on Next Page Quotation not permitted. Material may not be reproduced in whole or in part in any form whatsoever. Copyright © 2009 Crittenden Research, Inc.

Crittenden Resort Report™ RESORTS PLOW AHEAD… Continued from Page 3 The Southeast, which has the smallest share of the ski business, saw visits up almost 2%, the only region with an increase. The Rockies, the West and the Midwest posted drops of 7% to 8%, while the Northeast declined about 2%. Diversity of operations is key at ski resorts, as skiing and snowboarding are not, and cannot be the only sources of revenue, but most feel the days of real estate being a major focus are gone for good. Resort owners are going to have to put in a yeoman’s effort over the next decade to lure in new customers to the resorts, as well as to keep loyal customers coming back. The new self-centered younger generation will need special attention as they demand quickly advancing technology and unparalleled customer service. Resorts also need to keep the baby boomer generation happy, with more activities directed at seniors, as well as women, who are increasingly becoming the key decision maker in families. Development Sun Valley Co. and East West Partners head into the entitlement process for 140 acres at the base of the River Run ski lift in Blaine County, Idaho. The request for annexation and zoning, which should take anywhere from five to 10 months for approval, was submitted to the city of Ketchum, since it will be directly impacted by the potential development. Staying away from the dreaded “destination resort” moniker, plans are to create a year-round experience for the Bald Mountain ski area. Sun Valley Co. does not want to compete with the historic town of Ketchum and looks to link Ketchum, Sun Valley and the mountain into one unique resort experience. Design Workshop did the master plan for the development, which includes a luxury 150- to 200-room hotel, condos, townhomes and multi-family and single-family residences. Open space corridors, improved bike and pedestrian trails and a 15-acre Big Wood River Ecological Park also are part of the plans, as Design Workshop President Becky Zimmerman focuses on connectivity and creating vibrancy at the portal to mountain. Schweitzer Mountain premiers a new neighborhood in November, Mountainside at Schweitzer. The resort wants to give families a convenient and affordable ski vacation for both locals and destination skiers. The 2,900-acre resort is located in the Selkirk Mountains of northern Idaho. Mountainside at Schweitzer will begin as four separate homes, three of which will be sold as fractionals. The 1/8th shares will start at about $200K for an 1,800-s.f. to 2,900-s.f. fractional. Annual dues have not been set yet, but owners will be guaranteed a two-week stay in the summer and winter on a rotating basis. The whole ownership residence doesn’t have a price tag, but look for it start in the $1.5M range based on the pricing of the fractionals. The foundation for the homes has been laid and framing is underway. A model home should be ready to debut in December when sales will commence. Marketing will roll out at the beginning of December to local and regional markets. Schweitzer has 35 total lots in Mountainside for future fractional and whole ownership development depending on how the market goes. Schweitzer also recently completed the transformation of its deluxe units into family suites that can now comfortably sleep five instead of two and include a kitchenette. Schweitzer is also finishing up its new energy-efficient and low-impact snowmaking system. Ownership Ownership of the $250M Four Seasons Resort in Vail changes hands, as an affiliate of senior lender Barclays Capital, Vail Development 09 LLC, takes control from the original developer, Black Diamond Resorts-Vail LLC. While no one is confirming the reason for change, inside sources say it is just the matter of the bank taking the property back from the developer. Some say the project was taken over in February. Back in March 2008, Four Seasons reported more than 30% of the 1/12th fractional shares had sold, but that’s a big drop from the 85% reported in the first few weeks of sales in late 2007. Now the opening date of the property, which includes 121 hotel rooms, 16 condos and 19 fractionals has been pushed back another six months to June 2010. Vail Development 09 LLC was formed in June, the same time general contractor Layton Construction was replaced on the project by Hyder Construction. Telluride Ski and Golf Co. (Telski) puts out a call for equity, as the company seeks investors to purchase the Peaks Resort and Golden Door Spa in Telluride, Colo. Telski donated five acres of land for the hotel when it was built in 1992, and CEO Dave Riley could add more land to the property if Telski, a privately owned corporation that owns the ski and golf resort, is able to purchase the property from majority owner Blackstone Group. Continued on Next Page Quotation not permitted. Material may not be reproduced in whole or in part in any form whatsoever. Copyright © 2009 Crittenden Research, Inc.

Crittenden Resort Report™ Page 5 RESORTS PLOW AHEAD… Continued from Page 4 Riley believes Telski could turn the oft-troubled property around by capitalizing on his company’s synergies and making the property an economic anchor for the region. The 170-room Peaks is the largest hotel in Mountain Village, but it has seen its share of problems, from foreclosure, to numerous owners, to a recent lawsuit filed by the HOA of the 15 condos in the hotel due to disrepair of the property. Blackstone put Peaks up for sale a few years back for $50M, but obviously the price tag is much lower than that now. Renovations to the tune of about $11M began in May and include rehabbing the lobby, guestrooms, and upgrades to the engineering side of the hotel. Management Destination Hotels and Resorts picks up the management contract for the 59-room The Hotel Telluride in Colorado. David Jackson, president of Northridge Capital LLC, which owns the hotel, chose DHR because of the firm’s strong marketing and sales background in operating world-class ski resorts such as the Resort at Squaw Creek in California, Destination Resorts Snowmass and The Gant in Vail. Northridge bought the hotel in 2005 and converted it into a condo hotel. About two-thirds of the units remain for sale, but Peaks-Sotheby’s, which is handling the condo sales, won’t aggressively market the property until the economy turns around. DHR should give those investors even more long-term value, now having one of the top independent hotel management companies behind them. Entry-level pricing for the condo units start at $200K. The condos don’t have full kitchens, but offer a personal-size refrigerator and a toaster oven-microwave. Chisa Resources reaches out to Bellstar Hotels and Resorts to manage its new 68-suite ski-in, ski-out Mountain Spirit Resort & Spa at the base of Kimberley Alpine Resort in the Kootenay Rockies region of British Columbia. Mountain Spirit, which opened in June, will be able to capitalize on Bellstar’s wide-reaching marketing abilities, as well as its loyal customer base. And it’s a great pick-up for Bellstar, which adds the first ski resort to its 12-property portfolio, giving loyal guests another option for travel. Mountain Spirit targets the growing spa tourism business with its 6,000-s.f. spa. The resort gets direct flights from Calgary, Vancouver and Salt Lake City. It also is just a four-hour drive from Calgary. Mountain Spirit features studio, one-, two- and three-bedroom suites for purchase in quarter and whole ownership shares, or for nightly rentals. Fractional ownership starts at $86.9K and full ownership starts at $382.9K. Mountain Spirit is a few minutes walk from Trickle Creek golf course and near fly fishing, hiking and rafting. BEHIND THE SCENES Smells like desperation: At least that’s what many insiders are saying about Ultimate Escapes recent move to go public. UE partners with Secure America Acquisition Corporation, a blank-check firm with no background in hospitality. Secure America went from targeting the homeland security sector to luxury hospitality. It’s likely that the deal was too good for the SPAC to pass up. With UE’s expected growth rates and EBITDA of $19M projected for 2009, it seems the destination club should have formed a partnership to augment its management team, such as a hotel REIT or hospitality brand. When the move, which will give UE $20M up front, is coupled with the club allowing suspended members back in and trying to attract dues paying members without requiring a deposit, it’s obvious cash flow is king for the struggling club. Sign of the times: In a deal that is very indicative of the loans getting done these days by Liberty Bank, Wellington Financial ties up another receivables loan, closing a $20M deal with timeshare development company Silver Lake Resort. Wellington recently closed a $10M deal for Liberty with Welk Resorts in California. Quotation not permitted. Material may not be reproduced in whole or in part in any form whatsoever. Copyright © 2009 Crittenden Research, Inc.

Crittenden Resort Report™ Continued on Page 7 CONTACTS Auberge Resorts: 591 Redwood Highway, Suite 3150, Mill Valley, CA 94941. Mark Harmon, CEO, (415) 380-3460, fax (415) 380-3461. mharmon@aubergeresorts.com Bellstar Hotels and Resorts: 401, 8989 Macleod Trail S., Calgary, AB, T2H 0M2 Canada. Jon Zwickel, EVP, (604) 538-7001, fax (604) 538-7101. jonz@bellstar.ca Benchmark Hospitality: 2170 Buckthorne Place, Suite 400, The Woodlands, TX 77380. Alex Cabañas, VP Business Development and Strategy, (281) 367-5757, fax (281) 367-1407. acabanas@benchmarkmanagement.com Calistoga Ranch: 580 Lommel Road, Calistoga, CA 94515. Josh Dempsey, Director of Real Estate; Erin Dempsey, Director of Marketing, (707) 254-2800, fax (707) 254-2888. joshua@calistogaranch.com erin@calistogaranch.com Chisa Resources (Mountain Spirit Resort): 400 Stemwinder Drive, Kimberley, BC V1A 2Y9 Canada. (250) 427 7330. DCP International: 2121 Waukegan Road, Suite 100, Bannockburn, IL 60015. Randy Burgess, EVP Sales, (707) 473-9588. rburgess@dcpllc.com Design Workshop: 1390 Lawrence St., Suite 200, Denver, CO 80204. Rebecca Zimmerman, President, (303) 623-5186. bzimm@designworkshop.com Destination Hotels and Resorts: 10333 E. Dry Creek Road, Suite 450, Englewood, CO 80112. Mike Everett, VP Lowe Hospitality, (303) 799-3830. meverett@destinationhotels.com Dowling Co.: 2005 Main St., Wailuku, Maui, HI 96793. Everett Dowling, President, (808) 244-1500, fax (808) 242-2777. everett@dowlingco.com East West Partners: P.O. Drawer 2770, 126 Riverfront Lane, Fifth Floor, Avon, CO 81620. Jim Hill, Managing Partner, (970) 845-9200. jhill@ewpartners.com Flagstone Property Group: 1674 Meridian Ave., Third Floor, Miami Beach, FL 33139. Mehmet Bayraktar, Founder, (305) 531-3747, fax (305) 531-3748. Four Seasons: 1165 Leslie St., Toronto, ON M3C 2K8 Canada. Jim Fitzgibbon, President, Worldwide Hotel Operations, (416) 449-1750, fax (416) 441-4374. www.fourseasons.com Mayacama: 1240 Mayacama Club Drive, Santa Rosa, CA 95403. Art Buck, Director of Sales, (707) 569-2953. abuck@mayacama.com Northridge Capital LLC: 1101 30th St. N.W., Suite 150, Washington, DC 20007. Kevin Fay, VP, (202) 625-7890. kfay@northridgecapital.com Olympus Resorts (Prometheus Capital): 190 S. LaSalle, Suite 2830, Chicago, IL 60603. Scott Jordan, VP, (312) 704-5500. scott.jordan@prometheuscapital.com Opus Northwest: 1500 S.W. First Ave., Suite 1100, Portland, OR 97201. Brian Owendoff, VP/GM, (503) 916-8963. brian.owendoff@opusnw.com Osoyoos Indian Band Development Corp.: RR#3 S-25 C-1, Oliver, BC V0H 1T0 Canada. Chris Scott, COO, (250) 498-3444. ecdev@oib.ca. Palmer Property Development (Ranch on Soda Rock): P.O. Box 328, Healdsburg, CA 95448. Cynthia Palmer, Owner, (707) 327-7232. cp@palmerpropertydev.com S Jordan Associates: 1122 N. Clark, Suite 3603, Chicago, IL 60610. Scott Jordan, President, (312) 451-6210. scott@sjordanassociates.com Schweitzer Mountain Resort: 10000 Schweitzer Mountain Road, Sandpoint, ID 83864. Tom Chasse, President/CEO, (208) 255-2775. tom@schweitzerland.com Secure America Acquisition Corp: 1005 N. Glebe Road, Suite 550, Arlington, VA 22201. C. Thomas McMillen, Chairman/CEO, (703) 528-7073. Shangri-La International Hotel Management: 21/F CITIC Tower, 1 Tim Mei Avenue, Central Hong Kong SAR. Giovanni Angelini, CEO, (852) 2599-3000. slim@shangri-la.com. Silver Lake Resort: 7751 Black Lake Road, Kissimmee, FL 34747. Maria Morrison, VP Administration, (407) 397-1300, fax (407) 589-8416. mariam@silverlake.net Quotation not permitted. Material may not be reproduced in whole or in part in any form whatsoever. Copyright © 2009 Crittenden Research, Inc.

Crittenden Resort Report™ Page 7 CONTACTS Southstar Development Partners (Skywater Management): 255 Alhambra Circle, Suite 325, Coral Gables, FL 33134. Kimball Woodbury, Managing Director, (305) 476-1515, fax (305) 476-1519. Sun Valley Co.: P. O. Box 10, Sun Valley, ID 83353. Wallace Huffman, Director of Resort Development, (208) 622-2041, fax (208) 622-2824. whuffman@sunvalley.com Telluride Ski and Golf Co.: 565 Mountain Village Blvd., Telluride, CO 81435. Dave Riley, CEO, (970) 728-7334. driley@tellurideskiresort.com Timbers Resorts: 201 Main St., Suite 202, Carbondale, CO 81623. Dave Burden, CEO/Founder; Keith Marlow, Director of Sales, (970) 963-4626. dburden@timbersresorts.com kmarlow@timbersresorts.com Ultimate Escapes: 3501 W. Vine St., Suite 225, Kissimmee, FL 34741. Rich Keith, Chairman, (407) 483-1900, fax (407) 483-1935. richard.keith@ultimateescapes.com Vail Development 09 LLC (Barclays Capital): 745 Seventh Ave., New York, NY 10019. Ian Sterling, Associate Director at Barclays Capital, (212) 526-7000. ian.sterling@barcap.com Welk Resorts: 100 E. San Marcos Blvd., Suite 100, San Marcos, CA 92069. Jon Fredricks, President; Debbie Heinkel Executive Assistant to President, (760) 481-7778. dheinkel@welkgroup.com Wellington Financial (Liberty Bank): 1706 Emmet St., Suite 2, Charlottesville, VA 22901. Ron Goldberg, President, (434) 295-2033, fax (434) 295-1005. rgoldberg@wellington-financial.com Williams and Williams: Triad One Center, 7666 E. 61st St., Suite 135, Tulsa, OK 74133. Gloria Gilleland, Auction Manager, (918) 362-7300, fax (918) 250-1916. gloria.gilleland@williamsacution.com Wyndham Vacation Ownership: 8427 S. Park Circle, Suite 500, Orlando FL 32819. Maria Ruiz Margenot, SVP Sales Development, (407) 248-3890. maria.margenot@wyndhamvo.com BEHIND THE SCENES… Continued from Page 5 It’s a return to the ’80s for Wellington, as loans are back in the range of where they were during the Reagan years, at prime +3 with a floor in the range of 7%. Wellington President Ron Goldberg is trying to target developers where Liberty can place the entire loan and not rely on other participants. The company tries to pick up deals that Textron dropped. While it might not be anything to write home about, anticipate at least five more closings for Liberty by year’s end, as Wellington works on new and existing deals in New Hampshire, Hilton Head, S.C., Colorado and Pennsylvania. Silver Lake’s next development will break ground in late 2010 with 48 three-bedroom lockout units. The property is located two miles from the main entrance to Walt Disney Resorts and features 292 vacation villas, with potential for 630 overall. Going once going twice: Not wanting to wait out the market, some resort owners are heading to the auction block in hopes of selling properties quickly and at a fair price. The Dorn family put its Glendorn Resort on the blocks, not because it’s financially strapped like most resorts hitting the auction block these days, but because the family feels they can draw in more potential buyers through auction instead of a straight broker sale. It’s the first time the resort has been up for sale since it opened 80 years ago. Auction Manager Gloria Gilleland will handle the sale for the 1,200-acre Relais & Chateaux property, which will be sold in four parcels. One parcel includes the resort, its 20,000-s.f. main lodge, 14 cabins and maintenance and recreation buildings starting at $500K. Two of the parcels are timber property, as Glendorn offers more than 780 acres of commercial lumber potential, and will start at $500/acre. Williams and Williams sees a variety of interest from resort developers to timber companies to healthcare developers. With drive-to destinations expected to be all the rage over the next several years, it could be a nice fit for an updated resort, as the property is easily accessible from the tri-state area and a short drive from Buffalo, Cleveland, Pittsburgh and Toronto. Bidding starts at 2 p.m. EDT/11 a.m. PDT, Sunday, Oct 4. Quotation not permitted. Material may not be reproduced in whole or in part in any form whatsoever. Copyright © 2009 Crittenden Research, Inc.

Crittenden Resort Report™ TROUBLED PROPERTY REPORT Bankruptcy The developer behind LakeWatch Spa and Resort and LakeWatch Plantation filed Chapter 11 in hopes of reorganizing more than $50M in liabilities. The Smith Mountain Lake, Va., developer LakeWatch LLC, owned by Edward Park, recently reduced the project from a 150-unit, six-story condo hotel on 605 acres, to a 50-unit, four-story building on 576 acres. Creditors and claims include $13M for a loan on the property along with commercial loans and credit lines from StellarOne Bank, Bank of Botetourt, Wachovia Bank, Franklin Community Bank and BB&T. If Park can get some financial help, the project could make a go of it, as the lake real estate Foreclosure Benchmark Hospitality takes over management of the Maui Prince Hotel and Makena Resort after Wells Fargo filed a foreclosure lawsuit last month. Attorney Miles Furutani was named receiver. Wells Fargo is the trustee of the CMBS lenders. Developer Everett Dowling and Morgan Stanley formed a partnership to acquire the resort two year ago for $575M. The partnership owes about $192M in principal, interest and late fees. Benchmark will take over operations on Sept. 17, and it’s likely the company will change the name and branding of the 310-room hotel. New Life? Skywater Over Horseshoe Bay takes a mulligan as SW Ownership LLC relaunches the stalled 1,618-acre project after buying it at auction for $45M in May. SW Ownership, which is backed by three investment firms from Dallas, New York and Connecticut, was formed to purchase the Horseshoe Bay project. The group has invested an additional $10M to get the community off the ground again. Getting the Jack Nicklaus-designed Summit Rock golf course open will be the first order of business for the group. While SW reps think the golf course will be a big draw for buyers of the lots priced from $140K to $500K, it’s still a bit of a pipe dream to think contracts are going to be flying off the shelves. But the plans are much more feasible now, with the project dropping from a $1B price tag to $245M. And senior lender IBC Bank of San Antonio shows confidence in the project by working closely with the new ownership to ensure the success of the development. Lots range from about one-third to 8 acres, and the custom homes will run from $600K to $1.4M. Skywater Management, an affiliate of Southstar Developmment Partners will handle development, marketing and sales of the community, which will feature about 1,200 homesites for single-family homes, condos and villas. Ninety-four lots have been sold. Flagstone Development’s Watson Island in Miami appears to be back on track for the time being, as CEO Mehmet Bayraktar pays back the $100K in rent owed to the city, and plans to start construction on the 50-slip luxury marina as the February deadline looms. How far the development goes from there remains to be seen. ING Clarion has backed away from its deal to bring in $175M from an investor for the project and Shangri-La Hotels has put its plans to manage one of the hotel towers on hold. And while Bayraktar still sees construction on the hotel and retail beginning within two years, it’s likely the plans will undergo a major overhaul before any dirt is turned. The Crittenden Resort Report Team Email: editor@crittendenresortreport.com Customer Service Newsroom Tel: (949) 900-3726 Tel: (800) 421-3483 Fax: (415) 475-1516 Newsroom Fax: (949) 900-3760 E-mail: market@crittendenonline.com Resort Report™ is published by Crittenden Research, Inc., 45 Leveroni Court, Suite 204, Novato, CA 94949. Send address changes to Resort Report™, P.O. Box 1150, Novato, CA 94948-1150. Contents copyright © 2009 Crittenden Research, Inc. Sample newsletters may be viewed online at http://www.crittendenonline.com. Crittenden publishes The Crittenden Report on Real Estate Financing™, Real Estate Buyers™, Retail Space News™, Restaurant Insider™, Hotel/Lodging News™, The Apartment Report™, BuildersReport™, Real Estate Developers™ and Resort Report™. For more information on our publications go to http://www.crittendenonline.com. Resort Report™ is protected by copyright. It is illegal under federal law to make and distribute copies of this newsletter in any form without permission, including without limitation, photocopies, faxes, e-mails, digital scans and postings on an intranet site. Violators risk criminal penalties and up to $100,000 in damages per offense. Please contact our customer service department at (800) 421-3483 for information regarding site licenses, to request reprints of articles or to inquire about permission to make copies. Crittenden makes every effort to ensure the accuracy of the information published in Resort Report™. Crittenden uses only those sources it determines are accurate and reliable, but no guarantee or warranty with regard to the information is made or implied. Information in Resort Report™ is subject to change. Crittenden does not accept fees nor is it a business partner with any companies or firms mentioned in this publication. Quotation not permitted. Material may not be reproduced in whole or in part in any form whatsoever. Copyright © 2009 Crittenden Research, Inc.

R091409

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