Model Case: Wellness and Corporate Retreat Center with Yurts, Sullivan County, New York, SBA 504

A model feasibility case built only from public data. The parcel, borrower and operator are hypothetical; no client file or engagement data is used. The case follows the house format: at a glance, determination, program eligibility, regulatory pathway, market analysis, full cost table, operating assumptions, ten-year pro forma, DSCR by year and by month, break-even, sensitivities, valuation indication and conditions. Figures are as of October 8, 2026. Part of the glamping and short-term rental feasibility study cluster; programme detail on SBA 7(a) and 504 for glamping and cabin resorts and format detail on retreat center feasibility.

The project is not feasible as proposed. A 16,500 sq ft building programme for 16 lodge rooms, with a separate meeting hall, a dining hall and a spa suite, costs $9,297,242, or $387,385 per key against the HVS 2025 survey median of $223,000 for select-service and $409,000 for full-service hotels. At the 20 percent equity floor the 504 debt is $7,437,794 and debt service $664,985; stabilized NOI of $511,885 covers it 0.77x. The revenue is not the problem: the modelled package yield of about $285 per person per night at double occupancy sits at the low end of the comp set, which runs from about $115 (Omega dormitory weekend) to $799 and more (YO1 packages). The problem is fixed cost. A retreat center carries a chef, a program director and a dining team whether a group is in house or not, and in this county the property tax alone runs $100,000 a year at the $32.90 per $1,000 full-value rate.

The project is feasible as restructured, subject to the conditions at the end of this page. The restructure keeps all 24 keys and compresses the programme into two buildings: a 6,800 sq ft lodge and a 3,500 sq ft great hall that serves dining, meetings and the kitchen, with two treatment rooms replacing the spa suite. Equity rises to 40.0% of cost, including a $250,000 ramp reserve, because the research record is explicit that the 20 percent floor for a new business on special purpose property is a minimum and cannot be restructured downward; what the evidence supports is a longer ramp and a heavier equity and reserve position during it. Total project cost falls to $7,125,829, debt to $4,275,498 and debt service to $382,256. Coverage is 0.47x in year 1, 1.00x in year 2 and 1.34x in year 3; the reserve carries the first two years, and group sales ramp more slowly than leisure lodging.

Two alternatives were tested. Phasing the yurts does little for the loan, as the research pack predicted: all eight yurts with platforms and bath modules cost $354,160, about 5.0% of project cost, so deferring them barely moves debt service. They are phased anyway, four in year one and four in year two, because five or more campsites make the parcel a Subpart 7-3 campground and the phase-one permit path is shorter below that trigger. Dropping the yurts altogether was tested and rejected: without them revenue falls to $1,657,536 and year-3 coverage to 0.79x, because the yurts add seasonal keys to a fixed-cost base at the lowest capital cost on the site.

USDA B&I was considered as an alternative. No Sullivan County community approaches the 50,000 population ceiling, so the parcel is likely rural, and B&I would carry an 85 percent guarantee on a loan under $5 million with a 25 percent equity tier for a new construction business, which the restructured equity exceeds; the FY2027 OneRD notice had not issued at the date of this case. The 504 debenture's fixed rate is the reason to prefer it here; B&I's longer real estate term is the reason to compare it once the parcel's rural status and the FY2027 fees are confirmed.

Zoning runs through the Town of Bethel. Chapter 345 sends special uses through Planning Board review under Section 345-30, and the 2006 Comprehensive Plan steers resorts and hotels to the RD Rural Development district by special use permit or planned unit development; Chapter 120 separately requires a license for transient campgrounds, with 150 feet of road frontage. SEQRA review should be expected. The town must be confirmed before the permit timeline goes into the ramp, because Liberty's Chapter 147 and the Village of Liberty code apply different special use standards.

Health permits are two-tier. The lodge needs a Subpart 7-1 temporary residence permit (11 or more guests, 60 or more hours a year). Five or more campsites make the parcel a Subpart 7-3 campground, with water, sewage and site-spacing rules and prior approval for construction, and a 30-foot yurt at 706 sq ft falls outside the 7-3 camping-cabin definition (a hard-sided shelter under 400 sq ft), so the yurts are budgeted as code-reviewed structures and phase one opens with four. How the NYS Uniform Code treats yurts was not found in any document and needs a determination from the county health department and the town code officer.

Taxes on the guest are 8 percent sales tax (4 percent state, 4 percent county) plus the 5 percent Sullivan County occupancy tax, shown separately and remitted under a Certificate of Authority from the County Treasurer. The state STR registry law (S885C/A4130C, signed December 2024) matters only for any gap-filling nightly sales through platforms; the subject is a commercial lodging operation, not a dwelling. Property tax is modelled at $100,000, which is the 2021 Sullivan County overall full-value rate of $32.90 per $1,000 (the latest published by the Department of Taxation and Finance) applied to an assumed full value of about $3.0 million on the income approach; the current Bethel rate and the assessor's approach to a new lodging property are confirmation items.

Demand. Tourism Economics data released by the Sullivan Catskills Visitors Association on September 4, 2024 put Sullivan County traveler spending at a record $969 million in 2023, up 12.5 percent on 2022, supporting 4,908 jobs; SCVA later reported the county's visitor economy passing $1 billion of total impact in 2024. Empire State Development's July 2025 report shows Catskills visitor spending up 7.1 percent in 2024, with lodging taking 33 percent of all New York visitor spending and New York lodging ADR up 6.0 percent. The Global Wellness Institute's 2025 monitor puts wellness tourism at $893.9 billion in 2024, growing 9.1 percent a year toward $1.38 trillion in 2029. None of these sources measures group or retreat demand directly, and no AirDNA or Key Data extract for Sullivan County was obtained; both are conditions.

Supply and positioning. The named competitive set prices per person, all-inclusive: YO1 Longevity and Health Resorts in Monticello (131 rooms, five meeting rooms, 36 treatment rooms; rack $189 to $899, packages from $799 a night with a three-night minimum, OTA $244 to $714); Omega Institute in Rhinebeck (May to October only; weekend per person cabin single $880, double $700; five-day $1,850 and $1,475; two-night lodge rest and rejuvenation from $760; corporate offsite meeting fees $205 per person for a two-day weekend and $250 weekday); Menla in Phoenicia (29 to 80 rooms depending on the listing; retreats from $1,183); and Scribner's Catskill Lodge in Hunter (38 to 49 rooms; library seats 75; buyouts offered). The spread from about $115 to $799 per person per night means the subject's positioning drives the pro forma more than occupancy does. Omega's May-to-October calendar is the seasonality evidence the yurt season follows.

Rates and occupancy. The model separates the package into its components per occupied room-night: lodging at $300 (lodge) and $175 (yurt), meals at $160 at a 38 percent cost of goods, and programming and treatments at $110 at a 35 percent direct cost, which is about $285 per person per night at double occupancy, between Omega's weekend double and YO1's entry packages. Corporate group facility and meeting fees are modelled at $150,000 a year as a model assumption (twelve groups of twenty for two days at Omega's $250 weekday fee is $120,000; the balance is weekend buyouts). Lodge occupancy follows the Catskills season from 22 percent in January to 66 percent in July and August, averaging 45.2 percent; yurts run May to October at 45 to 65 percent. The ramp is a model assumption and deliberately slow for a group business: 70 percent in year 1, 88 percent in year 2, stabilized from year 3.

Stabilized revenue in year-1 dollars is $2,031,941: lodging $940,678, meals $557,786, programming, treatments and group fees $533,478.

Payroll is built from BLS Occupational Employment and Wage Statistics for the Central East New York nonmetropolitan area (area 3600006, which includes Sullivan County), May 2023, trended 3 percent a year to a 2027 opening: maids and housekeeping cleaners $16.28 median to $18.30; maintenance and repair $21.23 to $23.90; cooks $18.17; waiters $20.95 (the area's waiter wage rose from $16.74 in 2020 to $23.00 mean in 2023, so flat wages are not a safe assumption); meeting and event planners $24.58; massage therapists $18.89 (treatments are modelled as a 35 percent direct cost rather than payroll). A 24 percent burden applies.

Distribution and card processing is 6.0 percent of lodging revenue, lower than a leisure resort because group and retreat bookings are direct. Utilities are $60,000 a year, anchored to New York residential electricity at 28.37 cents per kWh in January 2026 (62 percent above the US average) plus propane, water and septic maintenance. Insurance is $45,000 as a model assumption. Property tax is $100,000 as described above. Marketing is 4.0 percent and administrative and general 4.5 percent of revenue; repairs and maintenance 3.5 percent and supplies 3.0 percent of lodging revenue; the replacement reserve is 3.0 percent of revenue. Expenses grow 3 percent a year. Sales and occupancy taxes are a pass-through and are excluded. Stabilized NOI margin is 25.2%, which is what an all-inclusive retreat produces once meals, programming and a full-year culinary and program team are carried.

The weakest three consecutive months are Dec, Jan, Feb: NOI of -$46,436 against debt service of $95,564, a coverage of -0.49x. Winter is negative for a Catskills retreat with a full-year payroll, as Omega's May-to-October calendar implies, and the lender reads the ramp reserve and a 12-month debt service reserve covenant as the answer; winter corporate programming is the operating answer and is not modelled.

With revenue scaled proportionally, the restructured project covers debt service at 42.8% annual-equivalent occupancy and reaches 1.25x at 46.4%, against 47.7% modelled. As proposed, break-even is 53.5%.

All rows start from the restructured base unless labelled otherwise.

Occupancy and package rates are the binding variables: five points of occupancy take year-3 coverage to 1.01x, a 10 percent rate cut to 1.15x, and the loss of corporate group fees to 1.13x. The slow-ramp case does not change stabilized coverage but extends the reserve draw through year two. Cost, bank rate, amortization and property tax risks are each absorbable on their own at the restructured equity level. Dropping the yurts is the worst row because it removes seasonal keys from a fixed-cost base.

No retreat center sale with a published cap rate exists in the public record; the indications below apply full-service hotel evidence to restructured year-3 NOI of $511,885.

At every rate the indicated value is below total project cost, which is the going-concern appraiser's problem on a special purpose new build and the reason the CDC and the bank will look to the equity position, the reserve and the DSCR rather than to loan-to-value alone.

Prepared by Michal Mohelsky, J.D., FMVA, Practicing Affiliate of the Appraisal Institute. Model case aligned with SBA SOP 50 10 8.1, under USPAP discipline. MMCG Invest, LLC, 27 Maiden Lane, Suite 625, San Francisco, CA 94108.