ASHLAND — Recession or no, Lithia Springs Resort & Gardens owner Duane Smith has taken on new partners and plans to move ahead with a vigorous expansion, building new condo-cottages, a spa, restaurant and wine-promotion center.

ASHLAND — Recession or no, Lithia Springs Resort & Gardens owner Duane Smith has taken on new partners and plans to move ahead with a vigorous expansion, building new condo-cottages, a spa, restaurant and wine-promotion center.

Smith sold half the business at the south end of town to John and Kathy Chmelir, longtime friends and partners in earlier enterprises. John Chmelir is a civil engineer experienced in real estate development and construction, while Kathy Chmelir's background is in business management, marketing and information technology.

The trio in the next few months plans to tear down old buildings once occupied by El Tapatio, a Mexican restaurant, and Mr. C's, a mom and pop grocery. Mr. C's relocated to Grants Pass and El Tapatio moved into a new building Smith erected just east of Lithia Springs Resort.

"It's been difficult to recognize what a beautiful resort it is, because it's been behind that ugly entrance," said Kathy Chmelir.

The owners plan a lush landscaping project at the front of the property, on Highway 99 at South Valley View, and say they will build tourist-friendly shops there, including a wine and cheese pavilion, which will offer tastings of locally grown food, as well as wines from the Rogue Valley and elsewhere in Oregon, said Smith.

Tourists often have difficulty driving around to scattered wineries, so the pavilion will familiarize them with wines and directions, Smith said.

The improvements to Lithia Springs, now marking its 20th anniversary, were planned long before the economic collapse and will proceed, said Smith, "although we will be much more cautious and maybe take four or five years." Instead of building the space for a restaurant and spa, the group will wait until the right operator has been secured before building, Smith said.

"We're cautiously optimistic," he said. "Historically, people who come to Ashland aren't affected by the economy. The news from Shakespeare (Festival) is that tourism won't be gangbusters but it will hold steady. And Ashland housing has lost value but done better than most places. We expect the recession to bottom out this year and gradually waffle out of it."

Lithia Springs is completing a major refurbishing of its "Irish cottages," in which it is selling partnerships. Once the removal of the old buildings is completed, the group will build high-end cottages, followed within five years by the condo-cottages.

While many may think recession dampens tourism, Kathy Chmelir said the trio expects those who in the past may have traveled to Europe will instead stay in the U.S. and come to Ashland and the festival plays.

John Darling is a freelance writer living in Ashland. E-mail him at jdarling@jeffnet.org.