Ski co-op closes financial gap

A LOCAL non-profit group that wants to buy the Shames Mountain ski facility is working away at closing a financing gap of nearly $300,000 this year and several hundred thousand dollars more in succeeding years.

  • Oct. 12, 2011 10:00 a.m.

A LOCAL non-profit group that wants to buy the Shames Mountain ski facility is working away at closing a financing gap of nearly $300,000 this year and several hundred thousand dollars more in succeeding years.

My Mountain Co-op has raised about $380,000 so far to buy the mountain but needs $550,000 for the purchase price and is spending approximately $250,000 this year on mountain and facilities maintenance and a further $150,000 on other equipment as well as maintaining an operating account of $60,000.

A preliminary purchase agreement

negotiated with the Shames Mountain Ski Corporation, the current owners of the Shames facility, calls for a three-year

payout requiring $200,000 this year and

the remaining $350,000 in the next two years.

Based on that first payment for this year and the work and expenditures on the mountain that are now underway leading to a winter opening, the shortfall this year is $280,000.

The co-op does, however, have $100,000 from the Kitimat-Stikine regional district and $15,000 each from the Kitimat and Terrace municipal governments. But that money can only be used for operating

expenses and cannot be applied to the purchase price.

My Mountain director Curtis Billey is confident the group will close the gap based on getting corporate grants and negotiations underway at several levels.

“There’s some very big [industry] players right now who want to see the ski hill go,” said Billey last week. “We are confident.”

And he said the co-op, in negotiating a final sales agreement with the Shames Mountain Ski Corporation, is pursuing a purchase price that’s lower than the

$550,000 in the preliminary sales agreement.

The co-op hopes to make a lower price more attractive to the corporation by paying it all at one time as opposed to a three-year disbursement, Billey said.

As for potential private sector donors, Billey and another director, Linda Parker, mentioned Rio Tinto Alcan as an interested party while at an Oct. 3 Kitimat council meeting.

They said, in asking Kitimat council for $15,000, that Rio Tinto Alcan has told the co-op the chances of getting money were stronger if they could show community support.

That didn’t convince Kitimat councillor Gerd Gottschling who said the Shames Mountain ski history has been one of financial red ink.

But councillor Mario Feldhoff said Shames added quality of life to the area and helped attract residents.

Gottschilling was joined by Kitimat councillor Randy Halyk in opposing a motion to provide the co-op with $15,000.

“We have to be really careful where we spend our money and I believe we need to spend it in the community, not outside of it,” said Halyk.

The motion, which passed by a 5-2 margin, also said the money is to be used only for operation expenses.

Rio Tinto Alcan official Colleen Nyce confirmed last week it has been talking with the co-op about some kind of financial assistance.

“We’re now waiting for them to come back with a business plan,” she said. “We’re asking them to show us how it would be a sustainable operation.”

Nyce said Rio Tinto Alcan would be more willing to provide some kind of assistance in purchasing the mountain than in aid for expenses every year.

“If it was a case of them having to come back year after year, then it would not be sustainable,” she said. “That would be a false sustainability. They would need to show a sustainable business plan.”

Nyce said Rio Tinto Alcan does recognize the role Shames Mountain plays in adding to recreational opportunities.

“It’s a great regional asset for young and old,” she said.

A successful sale by the Shames Mountain Ski Corporation of the mountain facilities to the co-op also requires a resolution of the more than $850,000 the corporation owes the provincial government.

The majority, $420,000, dates back to a tourism development loan taken out by the corporation and the rest is money the corporation hasn’t paid the province to lease the mountain.

There are now reports the ski corporation has been successful in reducing the loan amount and there were earlier suggestions the co-op would assume responsibility for the unpaid lease amount.

In the meantime, the co-op was at Prince Rupert’s city council meeting last night asking for $15,000.

First requests made by the co-op to Terrace, Kitimat, Prince Rupert and the regional district for $200,000 each were all turned down.

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