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Stokely Creek Receives $550K in pledges, needs more

Wed, May  16, 2007 - By Doug Pitt and Steve Holmes

Update May 10, 2007:

As a follow-up to our April 19, 2007 newsletter, your Board and many friends have been working fast and furiously to establish contacts and encourage folks to pledge towards the goal of protecting the Stokely Creek Lodge and surrounding King Mountain property. While many folks are still considering their personal contributions, we have received a total of $550,000 in pledges to date. This is a good start, but clearly we still have a way to go before we can feel comfortable about approaching Astina with our commitment to purchase. If you haven’t made your pledge, please be generous and continue to spread the word to anyone you feel may be interested in supporting our cause! Several folks have asked us questions as they consider their pledges and we’ve tried to summarize these, along with the answers we’ve been giving below. Please monitor the website for updates on frequently asked questions (FAQs).

On another note, we recently applied for and received a grant from Human Resources Canada (HRDC) to hire 3 students for a period of 14 weeks this summer. We will hire long-time Stokely employee Alex Lapensee to supervise 2 of the students, who will work at various jobs on existing AHC properties, including some major cleanup at Norm’s cabin, trail-work on the Robertson Lakes cliffs, and maintenance on the warm-up huts at King Mountain, Walker Lake, and Sam Lake. The third student will help us in the office with communications and marketing.

Answers to Frequently Asked Questions

1) What does the AHC plan to do with the lodge; it seems to struggle to make money every year? Pending the outcome of our request for pledges and the development of a business plan, the AHC will formulate a strategy that best addresses our overall goals. While protection of the land remains our number-one priority as a conservancy, we recognize the importance of the Lodge to a large part of our donor base. As such, we are committed to the Lodge being open as usual for the 2007-08 season, and are prepared to purchase it and the associated trail equipment and hire staff, to make this happen. Meanwhile, we will be carefully exploring an array of options for the long-term sustainability of the Lodge and are not fully committing to any particular option at this time. These options include continued AHC ownership; leasing the Lodge to an entrepreneur; running it as a limited partnership; and finding a buyer (e.g., someone who is looking for a lifestyle change and the challenge of operating Stokely as a business that is compatible with the goals of the AHC). No matter what the outcome, we are NOT prepared to sacrifice our funds or our donor’s funds to “keep the Lodge afloat” in the long term. We should all, therefore, expect to see Stokely operated under a somewhat different model from the past. Some of the ideas being considered for improving the balance sheet include a greater proportion trails groomed for single-track back-country skiing, and more off-season uses, including mountain biking, hiking, outdoor education, and conferences. We feel strongly that, with good marketing and a keen entrepreneurial spirit, Stokely can come back, bigger and better than ever!

2) Will the overnight accommodations and dining continue? In the short term, yes. In the long-term, this will depend on the business model under which the Lodge operates.

3) What is the Lodge’s and associated grooming equipment’s current state of repair? As we draft this note, we have enlisted the services of Northern Residential Inspections Inc. to conduct a full visual inspection of all of the buildings, including plumbing, electrical, and structural aspects. They are preparing a written report for us that will itemize necessary repairs and upgrades, with estimated costs. These figures are being used by BDO Dunwoody to prepare a business plan for the AHC. We will keep you posted on the development of this plan. As for the grooming equipment, Jamie Martin and his staff did a thorough job of servicing the equipment at the end of the season. He has prepared a list of repairs that should be done, and the costs of these will be factored into the business plan.

4) What will happen if we can’t raise the funds? By June 5th, we hope to have a good idea of where we stand financially with respect to the purchase of the Lodge and the 2600 ac that comprise the King Mountain area. If, however, the pledge total is insufficient to justify proceeding with the option to purchase, Astina has informed us that they will try and sell off the Lodge and grooming equipment (they are not interested in operating it). They have also told us that they will NOT sell the 2600 ac to anyone else. The entire 8000 ac property that we know as Stokely will be placed under sustainable forest management, very likely with wide open public access. It is therefore important that your pledge be counted towards the sum that we need to make a rational decision to enter into an agreement to purchase with Astina.

5) What is the AHC’s current financial status and prospects for outside funding? The AHC currently has approximately $500 K in cash assets. However, the availability of these funds for the purchase of the property depends very much upon the total amount of donation pledges. The AHC will use its available funds in a strategy that best addresses our overall goals, as stated in (1) above. We currently have an additional $550 K in pledges and are somewhat confident that we can raise $500 K more in outside grant funding. Clearly, our need for pledges is still very real! Stay tuned to our website for an up-to-date reading on how close we are to our goal.

6) Will pledges only be activated if the sale goes through? Yes. By the end of the summer, we will outline the course of action that we will be taking for the Lodge and the subsequent purchase of the 2600 ac. At this time, we would hope that you would endorse this plan by honoring your pledge in accordance with the plan timeline.

7) Will all pledge dollars go towards the purchase of the property? Yes. At this time, any operating funds we require will be drawn from current AHC funds and not donations. Anyone who wishes that their donation be applied directly to the purchase of the land can make this stipulation and we will honor it. We are currently looking at a $500 K / $1500 K split for the Lodge and the land, respectively, so the bulk of the fundraising will be applied to the purchase of the land.

8) Will all the current trails including the Sam Lake area, Belleau Lake loop, and Hakon Lien be available for use? Yes. Under our current negotiations with Astina, the AHC will hold guaranteed access to the entire trail system under a form of license agreement. From time to time, Astina may need to close a portion of the trail system due to ongoing forest management activities, but they have agreed to work with us to mitigate such impacts wherever possible. The Belleau Lake trail currently loops through Astina’s property and we have been using this trail under an informal agreement with them for a number of years. A section of the Hakon Lien trail crosses property owned by Lorne Ebare. The property has been heavily harvested over the past couple of years and the trail has been closed as a result of logging debris. Over time, we envisage acquiring permission to clean this up and reestablish this much-loved trail.

9) Why do we need to purchase the land if we own the lodge and have access to the trail system? The mandate of the AHC, as a land trust, can only be fulfilled through the purchase and protection of the 2600-ac property. The importance of the Lodge to the AHC is secondary, in that it will help us to achieve our primary goal of land conservation. The AHC has no desire or mandate to be solely a business operator for the Lodge. To guarantee the long-term viability of the Lodge as a haven for silent sport recreation, whatever the final business model, we see it as crucial that there be continued access to the larger trail system, in conjunction with a significant expanse of protected property.

10) Will the AHC need the pledge amount all at once in August, or can a pledge be paid over time? We plan to extend our fundraising efforts over a period of two years, since that is when our option to purchase the land expires. Thus, honored pledges over time will work just fine. It is important, however, that the pledges accurately reflect the total amount that can be raised. Regardless of the amount, each pledge will factor into the grand total we need to make a rational decision to enter into an agreement to purchase with Astina.

11) Are all donations tax deductible? Yes. The AHC is a not-for-profit organization with charitable status in both Canada and the US. Appropriate receipts will be issued upon donation. We hope that we have answered any questions on your mind. If not, please don’t hesitate to contact us at info@algomahighlandsconservancy.org. We also appreciate any suggestions or ideas you may have to offer. Thank you in advance for your continuing support. Together, we can bring Stokely back, bigger and better than ever!

Doug Pitt, President
home: 705-649-1281
work: 705-541-5610
email: info@algomahighlandsconservancy.org

Steve Holmes, Vice-President
home: 705-949-9017
work: 705-541-5661
email: erin.steve@sympatico.ca