LAKE OF THE WOODS: Commercial concerns: Resort owner says plans for 'shared capital' cabin project won't turn Oak Island on Lake of the Woods into another Brainerd.

Byline: Brad Dokken

Jul. 9--OAK ISLAND, Minn. - Russell Klegstad didn't realize he'd kicked the resort owner's equivalent of a hornet's nest until a customer asked about his plans to establish a commercial development on the island.

"He said, 'Boy, I'm hearing you're going to build a Breezy Point,'" Klegstad said, referring to the massive resort complex near Brainerd, Minn. "That's the only thing I heard." Owner of Southpaw's Sunset Lodge on Oak Island, Klegstad, 40, is in the early stages of rebuilding from a fire that destroyed the lodge and its dining and bar facilities last November. Klegstad says he hopes to have the lodge ready by this fall. But it's the other part of his plan for the resort that has some of the landowners on this scenic, 3,800-acre Lake of the Woods island up in arms. Klegstad is planning what he calls a "shared capital" project on the resort's 32 acres. He'll maintain Sunset Lodge as a resort, but with a twist: He plans to either tear down or move the resort's 13 existing cabins and replace them with 18 new dwellings. Klegstad then will sell the cabins, at a cost of about $320,000 each, to private buyers, who can use the units six weeks of the year. Only three of those weeks could be in the prime summer months. According to Klegstad, the cabins would go into the resort's rental pool the other 46 weeks, and Sunset Lodge would collect a management fee for tending the cabins. The cabin owners, who would collect a share of the rental proceeds, also would have to join an association and pay monthly dues that the resort would use for property taxes, maintenance fees and other costs. That's where the "shared capital" part of the concept comes into play, Klegstad said. It's an ownership system that's gaining popularity along the North Shore and in resort areas such as Aspen, Colo., and Orlando, Fla., he said. "They own the cabin, and they own the footprint," or land around the cabin, Klegstad said. "You're getting the footprint, the docks in, the water on, the sewers maintained, the shingles maintained and the staining and painting are maintained. "When you leave your cabin, you leave with the dirty sheets on the bed, and when you come back, it's cleaned and ready to …