Shames Mtn Coop in Terrace BC

[Mike Bernstein]

Soulskier -

You've done this a lot over at TGR and you're doing it here: I implore you to stop making references to the possibility that this is going to be a profitable enterprise to the point where you think proposing a three-year period where all profits get reinvested into the mtn is a meaningful statement. Regardless of how close you think Shames is to profitability, you haven't seen the numbers and seem to be going by third hand information - hearsay. There are precious few ski areas that make money off of just skiing operations, and those that do have super strong brands, a razor sharp mgmt team (often a family) with a laser focus on costs, and reasonable accessibility. The Shames Co-op, should it come to fruition, would be a tremendous success if it broke even every year or had a little money let over to fund modest capital programs each year. You are misleading people if you are even hinting at profit form their investment being a material motive in the decision making process. Moreover, if you are really convinced in the power of "the global skiing colective" (whatever the hell that means) and the vibe which it is supposed to espouse, why would profit be a motive for people who are driven by a vision of a skiing ideal? Isn't it about running a place the way it should be run and feeling like you have a voice? Doesn't a profit motive water down your entire message?

 

[soulskier]

Soulskier -

You've done this a lot over at TGR and you're doing it here: I implore you to stop making references to the possibility that this is going to be a profitable enterprise to the point where you think proposing a three-year period where all profits get reinvested into the mtn is a meaningful statement. Regardless of how close you think Shames is to profitability, you haven't seen the numbers and seem to be going by third hand information - hearsay. There are precious few ski areas that make money off of just skiing operations, and those that do have super strong brands, a razor sharp mgmt team (often a family) with a laser focus on costs, and reasonable accessibility. The Shames Co-op, should it come to fruition, would be a tremendous success if it broke even every year or had a little money let over to fund modest capital programs each year. You are misleading people if you are even hinting at profit form their investment being a material motive in the decision making process. Moreover, if you are really convinced in the power of "the global skiing colective" (whatever the hell that means) and the vibe which it is supposed to espouse, why would profit be a motive for people who are driven by a vision of a skiing ideal? Isn't it about running a place the way it should be run and feeling like you have a voice? Doesn't a profit motive water down your entire message?

Thanks for the feedback. All I am stating is IMO, if there are any revenues above and beyond operating costs, for say the 1st 3 years, they should be reinvested into the mountain. I stated this so interested shareholders know they won't be turning a quick buck and SMC is committed to the long term viability of the area. I don't know why that is construed as misleading. Can you please explain, as I totally agree this is important to have this crystal clear.

Also, one of the main reasons for our idea of a reasonably priced share ($500) is so shareholders aren't too concerned about a quick profit and having tons of loot tied up. My household will only buy enough shares that we can part with. If, in the future, the shares are worth something, great. If not, my household received shareholder benefits.

I will try to explain the "global ski collective" concept a little more. By tapping into the ski industries world's intelligence, we can find the best solutions and advice to challenges SMC will face. Also, the world has some great ideas and we have an unlimited amount of resources using this model. Furthermore, the GSC will market and promote Shames, ie pride of ownership. Just like one who owns stock in Coca Cola would buy a Coke, not a Pepsi, I believe shareholders will visit their mountain. "Hey honey, the forecast looks good next week, let's go ski powder and check on our investment"

I can explain later more about the local community versus the global ski community interface and how we will work together as a seamless team to help Shames achieve it's highest potential.

I don't think the mention of a profit (by the way the steering committee is currently determining what type of structure we will follow; non-profit, for profit, etc) will water down the message. The core value (and will be underscored many times over) is to make business decisions based on what is best for the environment, community and skiers. (In fact, that was the whole premise for starting the Co-op moment.) By following that belief system, I truly believe everything else will fall into place. If there is a "profit" to be made, great. But for anyone to invest thinking on a speculative basis, would be silly.

Shames Mountain Co-op, This ain't no ponzi scheme! (This is my favorite slogan thus far, though I highly doubt it will ever be used for real)

Lastly, thanks for making your point and keeping it constructive, unlike TGR where I have been continually personally attacked and called a total idiot (and worse).

 

[jamesdeluxe]

I implore you to stop making references to the possibility that this is going to be a profitable enterprise (...) Doesn't a profit motive water down your entire message?

I agree with the rest of your post, but you're taking Soul Skier's sales pitch a bit too seriously. He's speaking hyperbolically about a bunch of things, as I would if I were plugging a labor-of-love type thing like this. No one in his/her right mind would be investing in this for even a tiny financial payoff.

 

[soulskier]

I implore you to stop making references to the possibility that this is going to be a profitable enterprise (...) Doesn't a profit motive water down your entire message?

I agree with the rest of your post, but you're taking Soul Skier's sales pitch a bit too seriously. He's speaking hyperbolically about a bunch of things, as I would if I were plugging a labor-of-love type thing like this. No one in his/her right mind would be investing in this for even a tiny financial payoff.

Thanks JD, you said it much easier than I ever could (or did).

 

[Tony Crocker]

I agree with the rest of your post, but you're taking Soul Skier's sales pitch a bit too seriously. He's speaking hyperbolically about a bunch of things, as I would if I were plugging a labor-of-love type thing like this. No one in his/her right mind would be investing in this for even a tiny financial payoff.

I did not interpret soulskier's pitch as hyping down-the-road profits to prospective shareholders. But I did interpret it as providing the funds for the expansion of vertical and terrain. I do question the likelihood of this coming to pass anytime soon. Shames will very very lucky to get enough shareholders to retire the existing debt and keep the place breakeven in its current configuration.

Mt. Baldy has had the permits but not the cash to put a chairlift 2,200 vertical down the north-facing backside of Chair 4. There's a map at the notch showing this, dated 1991. I wouldn't hold my breath waiting for either of these expansions, wonderful though they would be.

 

[Mike Bernstein]

I implore you to stop making references to the possibility that this is going to be a profitable enterprise (...) Doesn't a profit motive water down your entire message?

I agree with the rest of your post, but you're taking Soul Skier's sales pitch a bit too seriously. He's speaking hyperbolically about a bunch of things, as I would if I were plugging a labor-of-love type thing like this. No one in his/her right mind would be investing in this for even a tiny financial payoff.

By referencing the possibility of profit in nearly every sales pitch, he is unwittingly legitimizing the notion that there is a realistic expectation for same. Rather, I think he should very clearly state up front that potential investors shouldn't view this as a traditional investment where their return will be measured financially. Rather, their return will be measured in softer attributes such as satisfaction in knowing that you are helping to keep a kick-ass mtn running. He should explicitly be saying "We do not expect to generate enough profits such that proceeds would be returned to investors at any time." While that may be the implicit message in some capacity, having read all of his posts here and TGR, I see a LOT more "We're going to re-invest all profits in the mountain for at least three years" sort of baloney. That's like a politician claiming they are going to outlaw bad weather.

 

[soulskier]

I did not interpret soulskier's pitch as hyping down-the-road profits to prospective shareholders. But I did interpret it as providing the funds for the expansion of vertical and terrain. I do question the likelihood of this coming to pass anytime soon. Shames will very very lucky to get enough shareholders to retire the existing debt and keep the place breakeven in its current configuration

I would remind you there are 50,000 people within a day's drive. If only 5% of them bought only 1 share, that is almost the asking price right there.

Please remember that besides the local community, there is the global ski community. We are approaching 1,000 Facebook fans quickly and have only begun our global outreach. The winter Olympics just happen to be in Vancouver in February and if we do this right, I think we can incorporate that monumental event into attention and hopefully an "open house" for perspective shareholders.

Also, the idea to partner with like minded companies, ie product placement, will surely add to the amount. For example, maybe a Canadian beer company would like to have exclusivity at the lodge and a flag in the parking lot for XX amount of dollars.

Lastly, as I mentioned before, Canada is very pro Co-op. It won't be too unlikely if they help out with a grant.

Jean-Pierre Blackburn, Minister of National Revenue and Minister of State Agriculture, announced a new and enhanced Co-op development initiative (CDI) program that would invest $19.1 million in co-op development over the next four years.

I wouldn't be so quick to think we will be very very lucky. As we say in Argentina, "Vamos a ver".

 

[soulskier]

I implore you to stop making references to the possibility that this is going to be a profitable enterprise (...) Doesn't a profit motive water down your entire message?

I agree with the rest of your post, but you're taking Soul Skier's sales pitch a bit too seriously. He's speaking hyperbolically about a bunch of things, as I would if I were plugging a labor-of-love type thing like this. No one in his/her right mind would be investing in this for even a tiny financial payoff.

By referencing the possibility of profit in nearly every sales pitch, he is unwittingly legitimizing the notion that there is a realistic expectation for same. Rather, I think he should very clearly state up front that potential investors shouldn't view this as a traditional investment where their return will be measured financially. Rather, their return will be measured in softer attributes such as satisfaction in knowing that you are helping to keep a kick-ass mtn running. He should explicitly be saying "We do not expect to generate enough profits such that proceeds would be returned to investors at any time." While that may be the implicit message in some capacity, having read all of his posts here and TGR, I see a LOT more "We're going to re-invest all profits in the mountain for at least three years" sort of baloney. That's like a politician claiming they are going to outlaw bad weather.

Maybe you could suggest a better way to word it? The premise being that if there is any revenue above and beyond operating costs, it will be put back into the fund.

BTW, it may be that we choose the non-profit Co-op route, that has yet to be decided. Again, not trying to do any smoke and mirrors, so I would greatly appreciate a better way to get the point across with respect to cash flow, should the be any additional.

 

[socal]

Maybe I'm kind of confused but does anyone know how much debt the place actually has on it? It seems like the asking price is $1.5mm and that the debt would be paid off with those $'s. Is that right? I like the idea and it sounds cool, but like most pointed out, given the cost and hassle to get there and the alternatives, I don't think I'd even consider it. I think something like Silverton makes a lot more sense if I was looking for lift assisted back country skiing (I know, I know, maritime snow-pack, longer vert, blah blah, life's about compromises unfortunately). Plus, there's real lift assisted skiing around the area if I want to rack up the vertical for a day or two. If I wanted to ski big lines in maritime snow and cost/hassle wasn't a concern why not just go to Alaska?

And, I should point out, I've probably read most of the threads over on TGR on this, and I think in the end a bunch of locals COULD end up buying it the resort but I think maybe a 100 (at most) other people would throw in $500 each (still feels unlikely though). Let's be honest, whoever owns that debt can't really be all that confident they'll get their money back, and I'm sure the current owners really just want to get out of the liabilities. So...eventually some locals could buy it for basically nothing but assuming the liabilties of the area.

Finally, I mean no offense at all Soulskier, but whether intentionally or not, you are kinda the spokesperson (didn't you do a newspaper interview?), and the fact that you've never actually been there doesn't really lend credibility to the whole concept. Get a local to be the spokesperson, IMHO.

 

[Mike Bernstein]

By referencing the possibility of profit in nearly every sales pitch, he is unwittingly legitimizing the notion that there is a realistic expectation for same. Rather, I think he should very clearly state up front that potential investors shouldn't view this as a traditional investment where their return will be measured financially. Rather, their return will be measured in softer attributes such as satisfaction in knowing that you are helping to keep a kick-ass mtn running. He should explicitly be saying "We do not expect to generate enough profits such that proceeds would be returned to investors at any time." While that may be the implicit message in some capacity, having read all of his posts here and TGR, I see a LOT more "We're going to re-invest all profits in the mountain for at least three years" sort of baloney. That's like a politician claiming they are going to outlaw bad weather.

Maybe you could suggest a better way to word it? The premise being that if there is any revenue above and beyond operating costs, it will be put back into the fund.

BTW, it may be that we choose the non-profit Co-op route, that has yet to be decided. Again, not trying to do any smoke and mirrors, so I would greatly appreciate a better way to get the point across with respect to cash flow, should the be any additional.

I would say something like this:

"Given the well-known economic realities of the ski industry, as well as the fact that Shames has a number of capital investment needs in order to help fulfill its vast potential, prospective shareholders should not expect to receive a financial return on their investment in the near to medium term. To the extent that operating cash flows exceed expenses in any given year, we anticipate that those proceeds will be invested back into the mountain and/or will be retained for the purpose of funding operations in years when SMC runs at a loss."

Now you may not want to use that word for word b/c it's not in your voice, but I strongly urge you to echo this theme when you discuss economics and returns to prospective shareholders.

 

[soulskier]

Maybe I'm kind of confused but does anyone know how much debt the place actually has on it? It seems like the asking price is $1.5mm and that the debt would be paid off with those $'s. Is that right? I like the idea and it sounds cool, but like most pointed out, given the cost and hassle to get there and the alternatives, I don't think I'd even consider it. I think something like Silverton makes a lot more sense if I was looking for lift assisted back country skiing (I know, I know, maritime snow-pack, longer vert, blah blah, life's about compromises unfortunately). Plus, there's real lift assisted skiing around the area if I want to rack up the vertical for a day or two. If I wanted to ski big lines in maritime snow and cost/hassle wasn't a concern why not just go to Alaska?

And, I should point out, I've probably read most of the threads over on TGR on this, and I think in the end a bunch of locals COULD end up buying it the resort but I think maybe a 100 (at most) other people would throw in $500 each (still feels unlikely though). Let's be honest, whoever owns that debt can't really be all that confident they'll get their money back, and I'm sure the current owners really just want to get out of the liabilities. So...eventually some locals could buy it for basically nothing but assuming the liabilties of the area.

Finally, I mean no offense at all Soulskier, but whether intentionally or not, you are kinda the spokesperson (didn't you do a newspaper interview?), and the fact that you've never actually been there doesn't really lend credibility to the whole concept. Get a local to be the spokesperson, IMHO.

Great points Socal. Allow me to respond.

To confirm, with the purchase price of 1.5 CDN million, the slate is wiped clean.

I think in the week's to come, I suspect there will be much more talk about Silverton as that is the closest ski area operational model. There are some major difference between the two, both pro and con.

As far as cost and difficulty to get there, I don't feel that $700 from LAX and $500-$600 from most west coast locals is that much. Especially when you figure that lift tickets, lodging and dining will be a lot less than at other ski areas. Also, a 2 hour flight from Vancouver is not a long travel day for most. If you left SoCal at noon, you could be in Terrace for dinner, no problem.

I predict your count of 100 global shares being sold is missing at least 1 zero.

While it's true the locals could buy the resort, it has been for sale for over 1.5 years and the future is uncertain. Besides that, I strongly believe that selling shares globally will increase skier visits as well as being able to tap into the global collective intelligence.

While Alaska is absoultely the best of the best, heliskiing is not inexpensive and is much more weather dependent. One of the great things about Shames Mountain is there is a copious amount of tree skiing for bad weather days. One of my local contacts says he averages 60-70 powder days a year and the ratio of good to epic ski days is higher than any other area he has skied.

The reason I have been the spokesperson is because my wife and I dreamed up this concept and are actively trying to make it happen. If you read the article you know that the whole idea started when we finished a day of skiing and were frustrated with the way the mountain was run. We have always talked about how ski areas don't treat their guests with the respect they deserve. Neither one of us have never felt appreciated as clients at a ski resort. (We have 55 season passes between us) Two days later a friend sent us the real estate listing for Shames. After a quick google search confirming the terrain, snowpack and accessibility are the real deal, we contacted a couple locals about the global Co-op concept, who promptly responded and were excited about the idea. Furthermore, that fact we are driving the global Co-op campaign from 11,000 kilometers away is a testament to social networking and global outreach. However, I totally agree the locals should be having their voices heard, which will happen very soon.

At the moment the local community is working on structure and preparing for a town hall meeting, followed by a fund raiser and concert, on Oct 24 in Terrace. The meeting will serve as a time to present the basic ideas as well as taking feedback from the community. We hope to record that meeting and have it available on the website as a podcast or a youtube video.

As far as never being there (that will change next week), I know a good thing when I see it. Some of the pictures of the terrain remind me of the early 90's when we started seeing pictures of Coombs in the Chugach. The combination of 480 inches and accessibility, along with the aforementioned terrain is enough to motivate me.

 

[soulskier]

By referencing the possibility of profit in nearly every sales pitch, he is unwittingly legitimizing the notion that there is a realistic expectation for same. Rather, I think he should very clearly state up front that potential investors shouldn't view this as a traditional investment where their return will be measured financially. Rather, their return will be measured in softer attributes such as satisfaction in knowing that you are helping to keep a kick-ass mtn running. He should explicitly be saying "We do not expect to generate enough profits such that proceeds would be returned to investors at any time." While that may be the implicit message in some capacity, having read all of his posts here and TGR, I see a LOT more "We're going to re-invest all profits in the mountain for at least three years" sort of baloney. That's like a politician claiming they are going to outlaw bad weather.

Maybe you could suggest a better way to word it? The premise being that if there is any revenue above and beyond operating costs, it will be put back into the fund.

BTW, it may be that we choose the non-profit Co-op route, that has yet to be decided. Again, not trying to do any smoke and mirrors, so I would greatly appreciate a better way to get the point across with respect to cash flow, should the be any additional.

I would say something like this:

"Given the well-known economic realities of the ski industry, as well as the fact that Shames has a number of capital investment needs in order to help fulfill its vast potential, prospective shareholders should not expect to receive a financial return on their investment in the near to medium term. To the extent that operating cash flows exceed expenses in any given year, we anticipate that those proceeds will be invested back into the mountain and/or will be retained for the purpose of funding operations in years when SMC runs at a loss."

Now you may not want to use that word for word b/c it's not in your voice, but I strongly urge you to echo this theme when you discuss economics and returns to prospective shareholders.

Excellent, thanks for taking the time to word that.

 

[Tony Crocker]

The November issue of Powder, just out, has a feature article on Shames and Smithers. It mentions in passing that Shames has never turned a profit in its 19 years of operation. Presumably that is due mainly to the debt service. No mention of the coop idea, but I know that issue would have gone to press in mid-August at the latest and was probably written originally last winter.

 

[soulskier]

The November issue of Powder, just out, has a feature article on Shames and Smithers. It mentions in passing that Shames has never turned a profit in its 19 years of operation. Presumably that is due mainly to the debt service. No mention of the coop idea, but I know that issue would have gone to press in mid-August at the latest and was probably written originally last winter.

Yes Mr Crocker, that is correct. The article went to press before the Co-op movement began.

 

[soulskier]

FOR IMMEDIATE RELEASE:
Local Steering Committee Considers Alternative Business Structure For Ski Area
Prince Rupert, BC – October 21, 2009 – Concerned for the future of their regional ski area, local individuals have recently formed a steering committee to consider the long term sustainable future for Shames.

The committee, Friends of Shames, is currently researching viable models for long-term sustainable operation of the ski area. Options include non-profit, co-op, and not for profit co-op models. They are meeting weekly to discuss information relevant to an upcoming business plan.

Alternative business structures for the mountain have previously been discussed, but it was a couple living in Argentina that provided the catalyst for action on this project. Their promotion of the idea has brought together a number of people committed to keeping the hill operating, and managed locally.

While the committee is not working formally with current shareholders of Shames Mountain, they are keeping them informed of their activities as they consider a new approach to operations and ownership.

Friends of Shames is operating with support and promotion from both the local and global snow communities. Networking extensively through a website, Facebook, word of mouth, and local media, the committee is building a knowledge base. They are seeking valuable input from people willing to donate their time and expertise. All interested parties are encouraged to participate.

The success of the considered business model is dependent on the continued involvement and participation of the regional snow community. However, due to the small population base, approaches that would increase investment and skier visits are being considered. Such efforts would yield a vibrant, healthy regional business, enhance services and amenities, and would ideally include on-hill accommodations and increased tourism.

Shames Mountain Ski Area is located near Terrace in the Coast Mountain Range of Northern British Columbia. Terrace is accessible by multiple 2 hr daily flights from Vancouver. It receives an average of 40 feet of annual snowfall. The lift access area also serves as a gateway to popular backcountry terrain.

Contact: info@FriendsOfShames.com

 

[Patrick]

Radio interview on CBC this morning.

Friends of Shames on CBC Daybreak North

 

[jamesdeluxe]

Radio interview on CBC this morning.Friends of Shames on CBC Daybreak North

Patrick, you fail at the internet ^^^^.

Try this:
http://livinginpatagonia.com/wp-content ... 3-2009.mp3

Soul Skier is well-spoken for a guy from Argentina. :wink: The interviewer allowed SS to present his case, which he did eloquently, but didn't press him about the issues we've been discussing here.

 

[ChrisC]

I generally support actions like this.

However, I just fundamentally belive that skiing is not something to subsidize. And I am doubtful a small community in BC can support a ski area. What % of the locals ski? <20%. What can they afford for winter recreation? What is the median income? I am liberal, not socialist. Economically realistic.

And the buzzword soup in this thread - 'global' 'co-op' 'ski community'.....so meaningless. And the fact the advocate has never been there???

I think Telluride, CO is a good example -- it's a minor economic disaster, It is not sustainable.

However, Telluride is a huge success story. Why? In the late 80s/early 90s - the mgt realized that no one can afford to get to Telluride. Outside of Reno, Denver, SLC - only top 5-2% of skiers can afford to get to any destination.

And Telluride is a place of Grade A beauty, awesome town, and such obvious ski terrain potential.

Point being - I do not think any community should be subsidizing a mountain that cannot succeed on its own.

 

[jamesdeluxe]

Sorry if I'm being dense, but I don't follow:

I think Telluride, CO is a good example -- it's a minor economic disaster, It is not sustainable. However, Telluride is a huge success story.

And help me with this:

the mgt realized that no one can afford to get to Telluride. Outside of Reno, Denver, SLC - only top 5-2% of skiers can afford to get to any destination. (...) Point being - I do not think any community should be subsidizing a mountain that cannot succeed on its own.

So you're saying that Telluride locals more or less support the ski area, with a small assist from destination traffic?

 

[Tony Crocker]

Yeah, I'm dense too. I have believe 75+% of Telluride's skier visits are fly-in destination people. Why else would it shut down first weekend of April with near max season snowpack and often the powder still dumping?

The Telluride Ski Resort (Telski) announced a total of 426,244 skier visits for the 2006-2007 season

I'm sure ChrisC can fill us in how Telluride got where it is today, but 400K is quite respectable for a place not easy to reach. I'm guessing Telski guarantees some airline seats, but I don't know if there's any subsidizing going on besides that. Telluride has summer tourism too, but I don't know how it compares to winter. At any rate, in terms of scale of ski facilities and skier numbers there is little in common with Shames.

I would recommend keeping the area comparisons within Canada, as average American and Canadian skiers seem inclined to stay within their borders much more than us here on FTO. As I've said before there are numerous interior B.C. ski areas that an avid Canadian like Patrick from the metro areas would have to overlook to go to Shames.