USDA B&I Feasibility Study Case Study: A Grand Canyon Gateway RV Resort on Airport Road in Williams, Arizona

A 100-site RV resort with 8 cabins proposed on a commercially zoned parcel at 701 North Airport Road in Williams, Coconino County, Arizona, at the Grand Canyon Boulevard interchange on Interstate 40, beside two hotels, 60 miles from the South Rim, on land marketed at $1,490,900 with public water and natural gas at the line. Underwritten as a USDA Business and Industry guaranteed loan to a new business at a $7,015,000 total project cost, a $4,990,000 loan held under the $5,000,000 tier for an 85 percent guarantee, and $2,025,000 of equity at 28.9 percent against the 25 percent required where the guarantee issues before construction is complete. The resort covers at 1.38x in Year 3 and 1.60x in Year 5 on a $64 blended rate at 42 percent annual occupancy, and the quarterly cash flow that Part 5001 requires of a seasonal borrower shows a first quarter that does not cover and a third quarter that covers three times. Determination: feasible with conditions, the first of which is a will-serve letter from a city that shut its last groundwater well in January 2026.

Model study prepared by MMCG Invest | Michal Mohelsky, J.D., FMVA | October 2, 2026

MMCG concludes that the proposed 100-site Grand Canyon gateway RV resort with 8 cabins at 701 North Airport Road in Williams, Arizona is feasible with conditions under a USDA Business and Industry guaranteed loan to a new business. On a stabilized blended rate of $64 per site-night, below the $63 to $72 the gateway's established resort park publishes on its own website, at 42 percent annual occupancy, the resort earns $1,374,227 in Year 3 and a net operating income of $628,017, covers its $442,508 of annual debt service at 1.38x in Year 3 and 1.60x in Year 5, and values at about $7,850,000 at Newmark's 8.00 percent Class A and B capitalization rate against a total project cost of $7,015,000. The $230,000 interest and operating reserve funds the Year 1 shortfall of $191,576 through the first winter, and Year 2 covers at 1.10x.

The structure is built to the program's two numeric thresholds. The loan is held at $4,990,000, under the $5,000,000 tier, so that the guarantee is 85 percent rather than the 80 percent that applies from $5,000,000 to $25,000,000, and the equity is $2,025,000, 28.9 percent of cost, above the 25 percent that 7 CFR 5001.105(d) requires of a new business whose guarantee issues before construction is complete. The feasibility study is mandatory under 7 CFR 5001.306(a)(3)(i) because the loan exceeds $1,000,000 and the borrower is a new business, and the quarterly cash flow that 7 CFR 5001.202(b)(6)(v) requires of a seasonal borrower is the study's central exhibit: the resort does not cover its debt in the first quarter of any year and covers it three times in the third, and the lender's covenant should be written to the year, not the quarter.

The determination is conditioned on five items. The first is a will-serve letter for water and sewer from the City of Williams, which discontinued production from its last groundwater well on January 23, 2026 after a year of arsenic readings averaging 17 parts per billion against a 10 parts per billion standard, now serves its 3,100 residents from treated surface water, and raised its water and wastewater rates in March 2025 on a utility it describes as recovering less than the cost of service; a city in that position may limit or delay new connections, and the study cannot be relied on without the letter. The remaining conditions are the assessor's confirmation of the parcel's acreage, which the listing states as both 9.3 and 14.7 acres, and of its zoning district, which the listing labels B-C2 and which does not appear among the city's published district codes; USDA's confirmation that the parcel is in a rural area; a bound insurance quote; and the quarterly cash flow covenant.

This is an MMCG model study: a complete feasibility analysis performed on a real, publicly marketed parcel using public data, prepared to show USDA Business and Industry lenders and sponsors how MMCG structures a new-business gateway resort to the program's tier, equity and seasonal cash flow rules and how it treats a utility constraint as a condition rather than an assumption. It is not a client engagement, MMCG has no relationship with the landowner, the listing broker or any prospective buyer, and the analysis does not represent an offer, an appraisal or a recommendation to buy the parcel. Figures drawn from the listing, the City of Williams, Coconino County, the National Park Service and competing parks' own websites are identified as such. Figures labeled MMCG assumption are underwriting inputs set by MMCG from industry benchmarks, and items that could not be verified from a primary source at the study date are listed in the Conditions and Limitations section rather than estimated silently. In particular, the parcel's acreage and zoning district, the City of Williams's RV park standards at Section 158.181 of its code, sewer availability at the parcel, the USDA rural area status of the parcel, the rates and site counts of five of the six competing parks from their own websites, the park's monthly visitation and the county's lodging tax series were not confirmed from primary sources at the study date and are carried as stated assumptions.

The Project will operate as a Grand Canyon gateway RV resort with cabins on the parcel at 701 North Airport Road in Williams, Coconino County, Arizona, at the Grand Canyon Boulevard interchange of Interstate 40, 60 miles south of the South Rim by Arizona Route 64 and 30 miles west of Flagstaff. The physical program comprises 100 full-hookup RV sites, 60 of them pull-through sites of 70 feet and 40 back-in sites of 55 feet, all with 50-amp service, concrete pads and patios, and 8 cabins of 400 square feet, for 108 units at 11.6 units per acre on 9.3 acres, together with a clubhouse of 3,000 square feet containing the office, a camp store, a lounge and a kitchen, a bathhouse with laundry, a dog run, a playground and paved internal roads, with an expansion of up to 40 sites reserved if the assessor confirms the larger acreage. The resort will be operated by the sponsor with a general manager, a maintenance lead and seasonal front desk, housekeeping and grounds staff of about nine full-time equivalents in season and three in winter, open year-round with winter rates and reduced services, and every RV site will be rented on a transient basis with a 28-day maximum stay. The sponsor will hold the land, improvements and business in a single operating entity that is the Business and Industry borrower, with the sponsor's principals providing the personal guarantees the program requires. The Project is positioned as the newest full-service park at the Williams interchange at a $64 blended annual rate, below the gateway's established resort park at $63 to $72 and above the corridor's older parks at $50, with seasonal pricing from $48 in January to $82 in July.

Marketing and Sales Strategy

Pre-opening marketing begins six months before opening from the resort's own booking site, with listings on the commercial reservation platforms and the two membership directories, and with the resort placed on the Grand Canyon gateway pages that route 4.4 million annual park visitors to lodging in Williams and Tusayan. The primary channel is the interchange: the parcel sits at the Grand Canyon Boulevard off-ramp beside the Hampton Inn and the Ramada, with visibility from Interstate 40, and the study carries signage at the ramp and placement on the state's travel information signs. The second channel is the Grand Canyon Railway, whose depot in Williams draws the gateway's overnight visitor and whose own RV park sets the market's rate. The third channel is the Route 66 corridor and the interstate's through traffic between California and the Southwest, which fills the park's shoulder and winter nights at winter rates. Retention runs through a returning-guest program and the cabins, which carry the shoulder seasons.

Amenities

The parcel at 701 North Airport Road is described by the listing as 9.3 acres of commercial land at $1,490,900, or $160,312 per acre, with public water and natural gas available, access from the Grand Canyon Boulevard off-ramp, the Hampton Inn and the Ramada as neighbors, and a seller willing to carry at 5 percent with 25 percent down; the listing remarks also describe a 14.7-acre parcel, and the assessor's record resolves the conflict. Williams is a city of about 3,200 residents in Coconino County on Interstate 40 and historic Route 66, 30 miles west of Flagstaff, and it is the southern gateway to the Grand Canyon by road and by the Grand Canyon Railway, which runs from its Williams depot to the South Rim.

The demand that reaches the site is the park's. Grand Canyon National Park recorded 4,430,653 recreation visits in 2025, down from 4,919,163 in 2024, a decline of about 9.9 percent that the National Park Service and regional press attribute to the Dragon Bravo fire, which destroyed the historic Grand Canyon Lodge on the North Rim and forced closures; Williams serves the South Rim, and the study treats the 2025 decline as a one-time event rather than a trend. The South Rim holds 908 lodging units and Mather Campground 317 sites, and the gateway's own supply in Williams and Tusayan absorbs the overflow. The site's position at the interchange, beside two hotels and a mile from the railway depot, is its asset.

The site's liability is the city's water. The City of Williams issued a public notice on December 10, 2025 that its water averaged 17 parts per billion of arsenic against the 10 parts per billion maximum contaminant level, discontinued its last groundwater well on January 23, 2026 and now serves more than 3,100 full-time residents from treated surface water, and adopted water and wastewater rate increases effective March 1, 2025 on a water utility it described as recovering less than the cost of service, with a wastewater treatment plant expansion in its debt plan. A resort of 108 units is a material new connection for a system of that size, and the will-serve letter is the first condition.

The listing describes the parcel as B-C2 General Commercial, a label that does not appear among the City of Williams's published zoning districts, which run through AR, CBD, CR, ER, HC, H-P, I-1, I-2, R1-43, R1-7, R-2, R-3, RMH-1 and RR; the parcel may lie in the city's HC Highway Commercial district or outside the city limits in Coconino County, and the second condition is the assessor's and the city's confirmation. The Williams Code of Ordinances, Chapter 158, contains a Recreational Vehicle Parks section at Sections 158.180 and 158.181 with a procedure for approval and standards, and a conditional use permit process at Sections 158.060 through 158.063; the text of the standards was not retrieved, and the study carries the resort as a conditional use with the county's standard as the density reference. Coconino County's Zoning Ordinance at Section 3.18.D caps recreational vehicle spaces at 12 per acre, and the resort's 11.6 units per acre on 9.3 acres sits under it; if the parcel is 14.7 acres the density falls to 7.3 and the expansion is available.

No stay-length ordinance for Williams or Coconino County was identified; the 28-day maximum on every site is the operator's policy, matching the 28-day maximum the Grand Canyon Railway RV Park applies, and it keeps the resort inside the tourist and recreation facility definition of 7 CFR 5001.105(b)(8) and away from the residential trailer park exclusion of 7 CFR 5001.118(a).

The parcel's USDA rural status is the third condition. Williams is well under the 50,000 population threshold, and Flagstaff, 30 miles east, is a city of about 77,000 whose urbanized area does not reach Williams on MMCG's reading of the Census Bureau's boundaries; the USDA Rural Development property eligibility map result for the parcel was not retrieved and is to be confirmed before application.

Public water and natural gas are available at the parcel per the listing; sewer availability was not stated and is part of the will-serve condition, with the budget carrying $520,000 for mains, laterals and connection fees to the city's systems as an MMCG allowance. The resort's water demand at 108 units is on the order of 8,000 to 10,000 gallons per day at peak on the state's campground design flows, which is the figure the city's letter must address. Electrical distribution and 50-amp pedestals at every site are carried at $480,000, or $4,800 per site, on the 2023 National Electrical Code basis of 12,000 volt-amperes per 50-amp site and a 41 percent demand factor at 36 or more sites, and natural gas serves the clubhouse, the bathhouse and the cabins.

Property tax is carried at $52,000 in Year 1, or $481 per unit, as an MMCG assumption reflecting Arizona's Class 1 commercial assessment and Coconino County's combined rate on an assessed value near the improved cost, escalating 2 percent per year. The City of Williams and Coconino County levy transaction privilege and bed taxes on transient lodging that are collected from the guest, and the county's lodging tax series was not retrieved.

The trade area for a gateway resort is the national park's draw, not the county's population. Coconino County holds about 145,000 residents on the last Census Bureau estimates MMCG carried, most of them in Flagstaff, and Williams itself about 3,200; the county's demographics describe a seasonal hospitality labor pool that Williams, Tusayan and the railway share, and the resort's nine seasonal positions are filled at the regional wage with employee housing as a line the sponsor should expect. The resort's guest is the Grand Canyon visitor: 4.4 million recreation visits a year, a drive market that reaches Phoenix in three hours and Las Vegas in four, international visitors who arrive by the railway and by tour, and a camping segment that the park's 317 Mather sites and the gateway's existing parks cannot hold in season.

The demand model counts the gateway's private supply and the subject's share. The six parks MMCG identified in Williams and on the Route 64 corridor hold roughly 500 sites on the counts MMCG could locate, several from aggregators and flagged, and the national park's Mather Campground holds 317. The subject's 100 sites are about 17 percent of the gateway's private supply, and at 42 percent annual occupancy the resort needs about 42 occupied sites a night across the year.

The penetration test is the set's own season. Two of the six competitors close or curtail in winter, the South Rim KOA from November through February and Railside from December 20 to March 1, and the gateway's established year-round park prices its winter at $63 against its summer at $72, which is the market's own statement that the winter runs at a third of the summer. MMCG carries the subject at 42 percent annual occupancy built from a quarterly curve of 20 percent in the first quarter, 46 percent in the second, 68 percent in the third and 34 percent in the fourth, and the cabins at 50 percent on a parallel curve. On that curve the resort captures about 17 percent of the gateway's private site-nights at 17 percent of its sites, which is a share equal to its supply weight for the newest park at the interchange with the only new cabins.

MMCG identified six competing parks in Williams and on the Route 64 corridor. One publishes a full rate card on its own website and is quoted; the others were located through aggregators and their rates are flagged.

Competitor Number 1 Grand Canyon Railway RV Park This park is located at 601 W Franklin Avenue, Williams, AZ 86046, beside the railway depot, and is listed by an aggregator at 124 sites. Its own website publishes 2026 pull-through rates for stays of up to six nights from $62.99 per night from November 1 to March 31 and from $72.10 from April 1 to October 31, and rates for seven or more nights from $58.70 and $64.85, with a maximum stay of 28 days; it is open year-round. It is the gateway's established resort park and the subject's rate reference.

Competitor Number 2 Railside RV Ranch and Cabin Resort This park is located at 877 E Rodeo Road, Williams, AZ 86046 and is listed by aggregators at 96 sites, open from March 1 to November 30 or December 20 on conflicting listings, from $73 nightly. Its own rate card was not retrieved.

Competitor Number 3 Canyon Motel and RV Park This park is located at 1900 E Rodeo Road, Williams, AZ 86046 and comprises 47 full-service RV spaces, 90 dry storage spaces and 7 tent sites on 12.37 acres per its own recent sale listing, which asked $4,789,987 and is now off market; an aggregator lists it from $50 nightly. Its own rate card was not retrieved.

Competitor Number 4 Williams / Exit 167 / Circle Pines KOA Holiday This park is located at 1000 Circle Pines Road, Williams, AZ 86046 and is open all year per its own site. Its site count and rates were not retrieved.

Competitor Number 5 Grand Canyon / Williams South Rim KOA Holiday This park is located at 5333 State Highway 64, Williams, AZ 86046 and is open from March 1 to October 31 per its own site. Its site count and rates were not retrieved.

Competitor Number 6 Raptor Ranch RV Park and Campground This park is located on the Highway 64 corridor near Valle, AZ and is listed by an aggregator from $50 nightly. Its site count and rates were not retrieved.

Grand Canyon Camper Village and Trailer Village RV Park at the South Rim are also in the gateway's set and were not retrieved. The Canyon Motel's asking price of $4,789,987 for 47 RV spaces and a motel is the gateway's own evidence of per-site value, and no new RV park approved or under construction in Williams was identified at the study date.

The subject's rate card is set against the one published card in the gateway. The Grand Canyon Railway RV Park's $62.99 winter and $72.10 summer rates for a paved, full-service, year-round park beside the depot are the ceiling for the subject's RV product, and the subject opens at a blended annual rate of $64, which is a seasonal card from $48 in January to $82 in July that averages below the Railway's across the year for a newer park a mile farther from the depot. Cabins are carried at $165 nightly, below the gateway's motel rates for a 400-square-foot unit with a kitchenette. Rates escalate 3 percent per year, and other income, which comprises the camp store, laundry, propane and fees, is carried at 6 percent of site and cabin revenue.

The transient policy is a 28-day maximum on every site, matching the Railway's, and the resort carries no monthly, seasonal or annual product; the tourist and recreation facility classification under 7 CFR 5001.105(b)(8) is thereby written into the rate card.

Construction runs 12 months from a 2027 closing and the resort opens for the 2028 summer season, with its first full year running from that opening.

The Year 1 shortfall against debt service of $191,576 is funded from the $230,000 reserve, which also carries the first winter.

Location: 701 N Airport Road, Williams, AZ 86046 Units: 108 (100 RV sites and 8 cabins)

Source: Marshall & Swift CoreLogic, MMCG

Total project cost of $64,954 per unit, with hard cost of $41,809 per unit, sits at the lower end of MMCG's new-build reference set for a resort with cabins, a clubhouse and 50-amp service throughout, and below the clean private builds at $47,000 to $54,000 per site on hard cost alone because the parcel is level, the utilities are at the line and the amenity program is modest. Land at $13,805 per unit is a third of the Pigeon Forge comparable in MMCG's case study set. The reserve of $230,000 funds the Year 1 shortfall of $191,576 with $38,000 of margin for a slower first season, and the guarantee fee is carried at 3.0 percent of the loan under the fiscal 2026 schedule.

Loan Assumptions

The loan is sized to the tier. At 75 percent of cost the loan would be $5,261,250, above $5,000,000 and guaranteed at 80 percent; holding it at $4,990,000 keeps the 85 percent guarantee and asks the sponsor for $2,025,000 rather than $1,753,750, which is the price of the higher guarantee. The sensitivity table carries the 75 percent case for comparison: a $5,212,500 loan at the same rate covers at 1.32x in Year 3 against 1.38x.

The Project is an eligible Business and Industry purpose under 7 CFR 5001.105(b)(8), a tourist and recreation facility, a resort trailer park and campground, operated as a commercial enterprise, and it is not a residential trailer park under 7 CFR 5001.118(a) because every site is transient under a 28-day policy and the resort carries no monthly, seasonal or annual product. The borrower is a new business, so the feasibility study is required under 7 CFR 5001.306(a)(3)(i) for a guaranteed loan over $1,000,000, prepared by an independent qualified consultant acceptable to the Agency and following Appendix A to Subpart D: economic, market, technical, financial and management feasibility, each of which this study addresses. Equity is 28.9 percent against the 25 percent that 7 CFR 5001.105(d) requires where the guarantee is requested before construction is complete. The guarantee is 85 percent for a loan under $5,000,000 at a 3.0 percent initial fee and a 0.55 percent annual fee under the fiscal 2026 notice, and the term may run to 40 years limited by the useful life of the collateral with no balloon. The borrower's cash flow is seasonal, so the lender's analysis must include quarterly cash flow projections under 7 CFR 5001.202(b)(6)(v), which the study provides for the stabilized year below. The parcel's rural area status is a condition.

Part 5001 requires quarterly projections for a borrower with seasonal cash flow, and the resort's season is the reason.

The first quarter's net operating income is $2,764 against $110,627 of debt service, and the fourth quarter's is $100,917; the third quarter's $339,288 carries both. The lender's covenant should test coverage on a trailing twelve-month basis, and the sponsor should hold a seasonal working capital line or a cash reserve equal to the first quarter's shortfall of about $112,000 at stabilization, which the study carries as the fifth condition.

The Year 3 operating budget at 42 percent RV and 50 percent cabin occupancy is built by line for a 108-unit gateway resort in northern Arizona.

The expense ratio of 54.3 percent sits inside the 54 to 56 percent range MMCG carries for a stabilized park from Newmark's expense analysis; payroll at 17.4 percent of revenue is above the Newmark average because a year-round gateway resort at 7,000 feet carries winter staff and snow removal against a winter that produces little revenue, and utilities at 8.1 percent are below it because the city's water and natural gas replace well pumping and propane. Insurance is carried at $520 per RV site and $1,200 per cabin in Year 1, escalating 5 percent per year, in a ponderosa pine market with wildfire exposure that the bound quote must price. The USDA annual guarantee fee is carried inside the administrative line.

The Year 1 shortfall is funded from the reserve. The resort covers at 1.10x in Year 2, 1.38x in Year 3 and 1.60x by Year 5, and its Year 3 yield on total project cost of 9.0 percent sits a point above Newmark's 8.00 percent Class A and B capitalization rate, which is the margin a new gateway resort earns over its exit value.

At Year 3 rates, the resort's fixed operating cost is $604,374 including the replacement reserve, and its variable cost is 11.5 percent of revenue for marketing, reservation and administrative lines. Occupancy is stated on a blended basis across all 108 units.

The 1.25x threshold sits a point under the forecast and the 1.0x threshold five points under it, which is the credit fact of a gateway resort: the annual occupancy that covers the debt is low, but it is earned in five months, and the lender's covenant has to be written to the year.

The resort holds coverage above 1.0x in every single-factor case except a stabilized occupancy of 33 percent, and the combined case of a lower rate and 37 percent occupancy falls to 0.86x. The margin is thinner than in MMCG's destination resort comparable because a gateway at 7,000 feet has a shorter season, and the reserve, the equity and the seasonal working capital line are the lender's protection.

The determination of feasible with conditions is subject to the following conditions precedent:

The following items could not be verified from a primary source at the study date and are disclosed: the parcel's acreage, zoning district and sewer availability; the text of Williams Code Section 158.181; the USDA rural map result; the rates and site counts of Railside RV Ranch, Canyon Motel and RV Park, the Circle Pines KOA, the South Rim KOA and Raptor Ranch from their own websites, and Grand Canyon Camper Village and Trailer Village; the Grand Canyon Railway RV Park's site count, carried from an aggregator; the park's monthly visitation series; the Coconino County and City of Williams lodging tax series; the county's combined property tax rate and the assessor's practice for RV resorts; the Vintage 2025 population estimates for Williams, Flagstaff and Coconino County; the Flagstaff urbanized area boundary relative to Williams; and the City of Williams's current connection and capacity fees.

This model study applies the methodology described on MMCG's RV park feasibility study and USDA B&I feasibility study pages. MMCG prepares RV park and campground feasibility studies for SBA 7(a) and 504, USDA Business and Industry and REAP, and conventional lenders nationwide, with engagements from $4,900 and delivery in 9 to 16 business days.