Campground infrastructure: connect usable sites to a funded repair plan

A campground’s revenue plan depends on functioning water, wastewater, electrical, access and drainage systems. An advertised site count is not enough to establish operating capacity. The financing file should identify the sites the owner is permitted to use, the systems that support them and any repairs or approvals required before additional sites can open.

EPA identifies campgrounds as an example of facilities that may have transient non-community public water systems. It also explains that public water systems can be privately owned. Ownership of a well therefore does not, by itself, establish that the system is outside a regulatory framework. Classification and obligations must be verified with the appropriate authority for the actual operation. EPA, information about public water systems

Reconcile three different capacity records

The site map describes physical inventory. Permit and land-use records describe authorized operation. Engineering and inspection evidence describe system condition and capacity. Reconcile all three before treating a site as available for rent. If their counts differ, document the reason and the work needed to resolve it.

Avoid making an engineering conclusion from historic occupancy alone. A system that has served a low-occupancy park may face different demands under a proposed expansion or longer guest stays. Ask the appropriate professional to evaluate the actual design, condition, peak demand and proposed use; the debt model should use that conclusion as an input.

The register should name the responsible professional and authority, document date, current deficiency, proposed remedy, cost evidence and acceptance condition. “Seller says it works” is a lead for investigation, not a completed condition review.

Hypothetical example: 100 advertised sites, 70 currently supportable

Assume marketing materials show 100 sites, applicable approvals support 90, and a qualified system review concludes that only 70 can operate under the current condition and configuration. These are stipulated facts for the example, not general regulatory limits. The proposed plan would repair infrastructure and obtain any required acceptance before using the additional approved sites.

For a 180-night season, assume 65% occupancy and a $60 nightly rate. Seventy available sites generate $491,400 of room-equivalent site revenue. Underwriting all 100 advertised sites would produce $702,000, an overstatement of $210,600. At $12 of variable cost per occupied site-night, the contribution overstatement is $168,480 before fixed operating costs.

The 90-site case remains conditional until the system work and required acceptance occur. The ten sites beyond current authorization should not be treated as future revenue simply because a pad exists. Any expansion case needs its own approval and cost evidence.

Budget the repair and the interruption separately

Assume the repair scope is $300,000, engineering and permitting costs are $25,000, and a $45,000 contingency is entered for identified uncertainty. Direct project funding is $370,000. A committed lender reserve provides $180,000, leaving $190,000 of direct sponsor funding before draw timing.

Construction also closes 20 of the currently available sites for 30 nights during a period with the same 65% occupancy and $60 rate. Lost revenue is $23,400. Avoided variable cost is $4,680, so lost operating contribution is $18,720. Total additional funding exposure becomes $208,720 if no other cash source offsets it.

Do not deduct the same closed-site loss again through a separate full-season occupancy reduction. The monthly operating model should show which sites are unavailable and when. If the closure shifts into a peak period, use that period’s supported rate and occupancy rather than the annual average.

Define the lender release and reopening evidence

A contractor’s completion invoice may not establish permission to return sites to service. Identify the actual inspection, test, certification or authority acceptance required for the particular system. The financing schedule should distinguish payment to the contractor, draw reimbursement and operational reopening.

If the $180,000 reserve reimburses only after accepted completion, the owner may need to advance the full $370,000 direct cost before reimbursement. That temporary need is different from the final $190,000 sponsor cost. Add the operating interruption and other cash obligations on their actual dates to calculate peak liquidity.

Use the evidence to decide what can be financed now

Present current supported operations separately from post-repair capacity and unapproved expansion. Identify each unresolved condition, the cash required to resolve it and the point at which additional revenue can reasonably enter the forecast. A debt adviser can then evaluate the current loan request and the conditions for future advances without relying on a single inflated site count.

The investor’s decision is whether the repair and interruption can be funded while preserving safe, authorized operations and debt payments. A larger post-repair revenue estimate is useful only when the infrastructure, approvals, timeline and capital needed to reach it are visible and supportable.