Come for the Beaches, Stay for the Blizzards

The Cape Codder isn’t the only Cape resort spending money to try to lure more off-season business. Last year Ocean Edge in Brewster spent $8 million building a Jack Nicklaus–designed golf course, which has stayed busy from April through November. “We have definitely captured the shoulder seasons,” says Suzanne Corcoran, who handles marketing for the resort’s parent company. And while the dead of winter is never going to bring a bonanza for Cape Cod, Corcoran notes that their own indoor pool does seem to be attracting more families looking for a respite from the snow. Last February, Ocean Edge booked 1,000 room nights, double the number in 2007.

As Catania crunched the numbers, a fractional project seemed as though it should work. Construction would cost $20 million, but that would finance 15 new condos (built atop the existing two-story hotel), an outdoor pool, a 15,000-square-foot spa, and the water park. If the sales team could sell 10 owners into each unit at an average price of $180,000, the project could gross $27 million. Plus, the spa and water park would drive business to existing guest rooms. Catania mortgaged the hotel, and began construction last March.

On this December morning, the corridors of the newly built Residence Club smell of fresh paint. The club’s library is still a work in progress, with insulation and heating ducts snaking through the ceiling.

But a few of the suites have been ready for occupancy since Thanksgiving, and they’re undeniably cushy. Room 807 is a three-bedroom, three-bath unit featuring four plasma TVs, a gas fireplace, and a master suite with a high-end steam shower and whirlpool. Catania says the furniture, fixtures, appliances, and cabinetry for each unit cost $150,000.

Owners are guaranteed five weeks of occupancy, and if they book their reservations early in the year, each should get at least a week during the prime summer season. When the place is less crowded, buyers get unlimited “space available” stays. “A surprising number of clients are really looking forward to [winter visits],” Rutland says, to break up the monotony of weekends stuck at home with the kids.

Even before construction was complete, Jeff and Brittany Bouchard were sold on the concept. The couple, who live in suburban Virginia, first visited the hotel last summer and wrote a check practically on the spot, paying $149,900 for their share of a two-bedroom unit. “It was somewhat of an impulse purchase,” says Brittany, a consultant for Jazzercise franchises. But they have lots of friends who summer on the Cape, and their fractional will give them somewhere to stay, with enough room to invite another couple along. “The price was not cheap, that’s for sure,” says Jeff, a quality-control VP for a manufacturing firm. “But I think the value will be there through the years.”

Catania is betting there are plenty of families who see the same thing—affluent mothers and fathers in their 30s and 40s, or boomer grandparents looking for a place to bring their children and grandchildren. Despite the economic downturn, he’s hoping sales will pick up soon, and that all 150 units will be claimed by the end of next year. Of course, as the real estate market has weakened, people angling to own on the Cape now have other options. Jamie Regan, president of the Cape Cod & Islands Association of Realtors, notes that buyers can now get an older condo the size of a Cape Codder fractional suite (albeit far less luxurious and in need of some TLC) for less than $200,000—and they won’t have to schedule their visits around nine other owners.

Sitting on the couch in one of his just-finished units, Bill Catania remains upbeat. “Things are actually going really well, considering this market,” he says. “The Cape hasn’t seen fractionals before, but when you look at the numbers and the convenience of it, it’s just the way to do it.” Even today, as a frigid wind blows against the windows and the indoor wave pool sits empty for lack of patrons, he sees a future filled with year-round family getaways. The sooner those guests start arriving, the better.

Daniel McGinn is a Boston-based national correspondent for Newsweek and the author of House Lust: America’s Obsession with Our Homes.