Pine Mountain — Callaway Gardens, the lush retreat that has beckoned generations of metro Atlantans, is pruning its green space to plant 1,400 houses.

The hope is that new residents will entice more visitors and money to a retreat that has struggled financially.

Elissa Eubanks/AJC (ENLARGE)

The first of a planned 1,400 houses are under construction at Callaway Gardens in Pine Mountain, and some people worry that the growth could spoil the retreat. Callaway officials say the facility is going through a rough time financially and could use additional revenue.

Elissa Eubanks/AJC (ENLARGE)

Liz Greer of LaGrange and her 2-year-old daughter, Chloe, visit the Cecil B. Day Butterfly Center.

Elissa Eubanks/AJC (ENLARGE)

Laurie Chambless saddles up after she and some friends arrived from Alabama to enjoy the bike trails in the 2,500-acre retreat in Pine Mountain.

ATTENDANCE* 2007: 501,100 2006: 480,100 2005: 465,600 2004: 488,400 2003: 481,700 2002: 507,600 2001: 575,200 2000: 540,800 1999: 632,200 1998: 486,200 *Paid gate admissions (Doesn't include conference attendees, golfers or lodge/inn guests who did not enter the main gates.) CALLAWAY GREENS Year and total revenue** 2007: $43.02 million 2006: $42.5 million 2005: $39.0 million 2004: $38.1 million 2003: $39.9 million 2002: $43.0 million 2001: $44.5 million 2000: $47.4 million 1999: $46.1 million 1998: $46.7 million **(for-profit and nonprofit sides combined) Source: Callaway Gardens BUSINESS Latest Headlines: Paychecks shrink at Georgia's small businesses  Big Atlanta developer sued over Calif. project  Airlines drop ticket prices amid slow summer  Specialty drinks make a splash at fast-food chains  Delta, Virgin Blue seek alliance on flights to Australia  • More business news • Business photo galleries

Fans of the sprawling gardens worry that with that much growth, what they love about Callaway could be compromised. Callaway's leaders say they know they must be careful.

"The hardest thing is to get the feel of Callaway," said former U.S. Rep. Howard "Bo" Callaway, the 81-year-old son of the textile magnate who spent decades cultivating the gardens. "If we don't do that right, we might as well be in downtown Atlanta."

Homes will be built to limit their environmental impact, from using low-polluting paint to geothermal systems for heating and air conditioning, officials say. Workers will grind up leftover construction wood and wallboard and mix it with the soil. Clear-cutting will be forbidden.

Neighborhoods are being designed for residents to walk, cycle or drive golf carts to Callaway attractions.

An hour-plus drive south of Atlanta's high-rises, 2,500-acre Callaway has long lured visitors with its famous azaleas, bike trails, butterflies, lake beaches, golf courses and setting for public television's long-running "The Victory Garden" program. By teaming up with Atlanta developer Cousins Properties, Callaway is embarking on its biggest transformation in 50 years.

Officials envision more new houses than Pine Mountain has residents (about 1,100 in the town).

"My first reaction was, 'That was too many homes,' " Pine Mountain Mayor Joe Teel said. He tried to persuade leaders of the gardens to scale back.

Carl Hilburn, a commercial photographer from Stone Mountain, visited the gardens recently. He sees Callaway's appeal to home buyers: "They are getting to live in everybody's paradise.

"My concern for them [Callaway leaders] is they don't spoil what's made them famous," said Hilburn, 59. "If you have to wait in line to get in the park, I don't think Atlantans would enjoy that."

Twelve years ago, Edward Callaway, the grandson of founder Cason Callaway, broached the idea of a large development with the nonprofit foundation that owns the gardens. Afraid to ask in person, he sent a letter to fellow trustees, most of whom are not members of the family.

"Our business is putting people in nature, and we were not in the most important part of it, which is living units," Callaway, the foundation's 53-year-old chief executive, said in a recent interview.

He reasoned that Callaway Gardens could showcase ways to develop homes in concert with the environment and still make a profit. The debate lasted several years.

Now the first two houses are under construction, and more are expected to be on the market this summer. The target is a mix of buyers: weekenders, people shopping for full-time homes and others who intend to rent to tourists. Houses — expected to be priced from the mid-$300,000s to more than $600,000 — will spread through woods and former fairways and eventually edge up to beaches at Robin Lake.

Early concepts also call for retail shops topped by residential lofts near the lake. No decision has been made about whether to keep the east side beach pavilion, with its 1950s-era pillars sprouting like giant concrete martini glasses.

The fate of Mr. Cason's Vegetable Garden is certain, though.

"It's in the wrong place," Callaway said of the spot named after his grandfather. The 8-acre site will be partly dismantled and relocated to a footprint less than half as large and out of the way of new houses.

The cost of maintaining the sprawling vegetable garden has been "killing us," Callaway said. And the half-mile-long beach at Robin Lake — most of its length untouched even during summer weekends —"is not sustainable economically" under Callaway's old financial model, he said.

Open to the public

In the 1920s and '30s Cason Callaway began buying thousands of acres of overworked cotton farmland in Harris County and replanted with native species. By the 1950s, he opened part of his cherished property to the public, then argued with son Bo over the idea of putting a small hotel beside the gardens. The elder Callaway saw the gardens largely as a place for people to visit during the day and then leave, his son said.

Over the years, Callaway Gardens added other ways to draw visitors. There was the beach, new trails and a botanical garden. The most popular attraction, a butterfly center, opened in 1988.

Emerald golf courses were ringed by nature, not homes. "We never thought that was us," said Bo Callaway, a member of the gardens' board of trustees. "We were a park and pristine."

Eventually, Callaway Gardens added about 200 rustic cabins, nestling them in spots unlikely to catch visitors' eyes. Most were sold to individuals as rental units.

By the mid-1990s, Callaway had begun to sag. Event planners found more modern meeting spaces elsewhere. Attendance slid. After the Sept. 11 attacks hurt the travel industry, the financial problems became undeniable, Edward Callaway said. The getaway closed a restaurant and blocked one of the garden's main entrances.

"We were bleeding from every pore in a concept that was broken," he said.

He had spent part of his childhood at Callaway Gardens but started his career as an accountant in Manhattan and invested most of his adult life away from the gardens. In 2003 he took the reins at Callaway following what he calls the gardens' "10-year run into oblivion."

Annual revenues sank nearly 20 percent from six years earlier. By the end of 2004, the financial troubles had wiped out all the endowment's available funds, officials said.

New revenue streams were in the works, though. The addition of a conference center, lodge and spa added cash streams. And, after years of debate, the foundation carefully opened the gardens to an outside developer, selling land to Cousins to make way for nearly 140 homes in a project called Longleaf.

Callaway kept meticulous control, reviewing lot by lot which trees could be cut down and vetoing a road that would have cut through a treasured stand of longleaf pines.

Now, as Callaway and Cousins press ahead on the larger project, Callaway has dibs on a share of the profits over its projected 10- to 12-year buildout.

The first phase, with 560 homes to be added over five years, could pour $20 million back into Callaway's coffers, said Jeff Quinn, a Cousins executive on the project. Such an infusion would equate to nearly half the gardens' total revenues last year.

But first, home buyers must cooperate. The development's kickoff comes in the midst of a steep downturn in the national housing market. "We will make the absolute best of it and be ready when it comes back," Quinn said.

Even if the project never turns a profit, it'll have been worth it, Edward Callaway said. "It's an attempt to put people on a landscape that's good for them and plants and animals."

Linda Souhrada bought in the Longleaf development two years ago. But the flight attendant voiced mixed emotions about the much larger wave of homes.

She's excited about plans for more cultural events and the fresh energy that might come. But watching birds flit around her wooded backyard, she talked about the traffic she's sure is coming.

"I hope with all this growth they will preserve this wonderful environment and it will still feel like Callaway Gardens," she said. "Right now, this is a little piece of heaven."