La Campanella, the Italian-style development on north Main Avenue, is moving to fractional ownership after selling only three units in three years.
The developers are asking $98,868 to $159,000 for a one-eighth ownership of a unit. The fractional-ownership plan awaits approval from state regulators, but the developers are taking reservations.
The move toward fractional ownership, or timeshares, comes after a poor sales record for La Campanella, 3416 Main Ave.
Three of the units have sold, but two of those went to members of the Ariano family, which developed La Campanella.
Only one has been purchased by a buyer unrelated to the developers. That sale was to an Ohio man for $818,200 in November 2007, according to La Plata County records. The man uses it as a second home, said Rocky Ariano, sales director for La Campanella.
One unit is owned by Robert J. "Bob" Ariano, and another is owned by his company, A & L Coors, Inc. Those two units are used as model homes with plans to sell them later, said developer Nancy Ariano, Bob's wife. The remaining 15 units are owned by Hunnahs, LLC, an entity registered to Nancy Ariano.
La Campanella was planned in boom times and built beginning around 2006. It soon ran in to a diminished appetite for high-dollar vacation homes as real estate markets elsewhere tanked. Home sales in Durango fell 23 percent in 2008, from 163 in 2007 to 126.
Nancy Ariano purchased the Silver Spur Hotel at 3300 Main Avenue for $1.1 million in 2001 to make room for La Campanella.
Part of the commercial development was only recently completed.
Ariano said that if she had known how the market would fare, she would not have built La Campanella. "No way," she said.
Some wish she hadn't. Mayor Renee Parsons called the development "too cheesy for Miami."
Parsons was not on the City Council at the time La Campanella was approved. But, she said, "I wish we could raze it, but I don't see any way to do that."
Councilor Doug Lyon agreed that
La Campanella was a bad fit for the area.
"I'm not a big fan of Tuscan architecture in the city of Durango, and it appears that prospective buyers agree with that assessment," Lyon said. He said that La Campanella is "private property."
"We can't take it over," he said.
Ariano also owns New Country Auto Center in Durango and Cortez. She said La Campanella "has certainly been a learning experience. Having been in the car business, I've watched the economy go up and down, and up and down, but this one was really a wild ride."
Fractional ownership is common in luxury vacation spots such as Aspen and Telluride, but fairly unusual in Durango. Wyndham Durango at Historic Downtown (formerly Fairfield) offers timeshares at the south end of downtown. Durango Mountain Resort recently dived into the fractional-ownership market.
"It's just getting bigger all over, with prices of second homes going up and people not wanting to spend millions of dollars anymore," said Rocky Ariano, son-in-law of Nancy. "This fractional concept is really taking off."
La Campanella opened an office at the corner of Main Avenue and College Drive - prime foot traffic downtown, particularly for tourists - to spur timeshare sales.
Nationally, timeshares have been hurting. In December, Wyndham Worldwide said it would cut 4,000 jobs in its timeshare business and slash its development plans to avoid tapping the credit market next year. Wyndham's stock, one of the lodging sector's worst performers, lost 72 percent this year, even though the Parsippany, N.J.-based company reported that demand for its properties has held up and mortgage defaults have not spiked.
Marriott and Starwood, which have smaller timeshare segments, are also scaling back on sales and development.
La Campanella will still offer whole ownership for prospective buyers. The villas, as the developer calls the units at La Campanella, include gas fireplaces in the master bedrooms, marble and granite countertops and luxury kitchen appliances. The units are about 2,100 square feet each.
Owners of a one-eighth share will be entitled to eight weeks a year at their La Campanella unit. Additional time can be purchased at other units, Nancy Ariano said.
Fractional ownership is "an easier way for people to afford a second home without the expense of the entire home or without the headache of taking care of the home," she said.
A property manager will take care of the units, which come furnished with dishes, pots, pans and bedding. Fractional owners can even arrange to have their family photos displayed before they arrive, Ariano said.
"The beauty of it is, in an economy like right now, we can still promote Durango and get people to Durango," she said.
Fractional owners "still have all the benefits of Durango for a cheaper price," Ariano said. "That's what we all need right now, is cheaper price."
The Associated Press contributed
to this report.