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OKOBOJI, Iowa -- Okoboji’s mayor and at least three city council members are taking a wait-and-see attitude toward a multimillion-dollar plan for redevelopment of the property known for more than a century as The Inn at Okoboji.

The plans, revealed Monday night during a special session of the council, calls for demolition of all existing buildings, beginning in March, and dividing the lakefront portion of the property into five, single-family residential lots, each about 75 feet in width and about 450 feet deep. A sixth lot also would be carved out that would face but not front the lake.

Rapid City, South Dakota-based Whitecap, LLC bought the property at auction in a $5.7 million deal that closed in December 2017 without identifying the principals in the corporation.

San Francisco hedge fund manager William Duhamel, and his wife, Katharine Duhamel, were the only two principals identified Monday night. In addition to several other properties in the area, the Duhamels own a summer cottage at 3515 Fairfield St., less than a quarter-mile from The Inn. The home, which dates to 1903, and land are assessed for property tax purposes at more than $869,000, according to Dickinson County records.

Duhamel’s hedge fund, Route One Investment Company, lists more than $4 billion in assets under management, according to recent regulatory filings. The firm was founded in 2010.

Whitecap's redevelopment plans are contingent on vacation of Eden Street, which would require council approval. Eden Street runs north and south, between Lakeshore Drive and Fairfield Street, separating what has been the main campus of The Inn from the indoor pool on the west side of the street. The six proposed homes would be the only construction to replace the 155 units of The Inn.

Reciting the city’s mission statement, to “Improve and Protect Our Community,” real estate broker Michael Jensen, who represented Whitecap in its purchase, told the crowd of several dozen local residents packed in to the small council chambers that the Duhamels intend to do just that with a much lower density development.

Under the redevelopment, all parcels north of Lakeshore Drive -- about 69 acres comprised of a golf course and farmland -- would be turned into greenspace and a park with paved trails.

"It is the intent of Whitecap to develop and maintain this park, without any cost to the city whatsoever,” Jensen wrote in the letter he presented to the mayor and council.

Mayor Mary VanderWoude, who is a non-voting member of the council, explained after the meeting that the council has no history of vacating city property. VanderWoude was elected mayor 12 years ago after serving on the planning and zoning commission for four years.

“But I like the idea,” VanderWoude said, adding that she expects the council will have many more questions before taking the issue to a vote. The council voted against a vacation of 16 feet of lakeshore within the last year, she noted.

“We’ll be taking this one day, one step, at at time. This is a huge deal for the city of Okoboji," VanderWoude said. "It’s very important to do this right.”

“The people I saw after the meeting were very happy they would be involved in the decision process, because their opinion does matter. Right now it’s looking good. I’m not sure if it will stay that way or not.”

Councilman Jim Dalperdang, a retired physician who has been elected to five terms on the council said his impression is that the Whitecap offer, “is sort of a natural evolution of the property."

"I’m sensitive to the community’s needs, but also have to respect private property rights," Dalperdang said. "These people have every right to work through the process and do what they are doing. I can only do what’s legal and in the best interests of the residential character of Okoboji."

Council member Jim Hentges noted, “At this point it’s all in the informational stage. We have to go through the process to see how the people feel about it. That’ll help decide. I’ll listen to everything they have to offer, and make an educated decision at the end.”

Julie Andres, who began her second council term in January, said, “It’s early yet. We were just pleased to finally sit down and hear the official word because there has been so much talk and speculation. It’s nice to hear from the horse’s mouth. The Inn is a piece of property that’s very historic, and is located in the very heart of our residential neighborhood. I’m looking forward to hearing everybody’s feedback.”

Editor's note: An earlier version of this story misstated the number of lakefront lots that would be developed.

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