Yukon North Of Ordinary

News archive for January 31, 2014

Local investors could re-open WildPlay at Mount Sima for next summer

Sima may have a summer after all.

By Whitehorse Star on January 31, 2014 at 4:27 pm

Sima may have a summer after all.

Friends Of Mount Sima vice-president Rod Taylor said this morning a group of nine local investors including Northern Vision Development, among others, is considering purchasing the WildPlay franchise in Whitehorse with Friends Of Sima operating the adventure park.

“At the end of the day it just makes sense,” he said.

Taylor, NVD president Rich Thompson and Great Northern Ski Society president Craig Hougen have been working on the proposal with WildPlay for about six weeks.

Last July, former Mount Sima operators GNSS shut down the hill amid significant financial problems. That closed the WildPlay operation, which was in the second year of a 10-year lease.

While GNSS set to work paying off debts so it could dissolve as a society, the Friends of Mount Sima was formed and were successful in its efforts to re-open the hill for winter operations. Funding came through to pay off many debts owed by GNSS on the chairlift and to local creditors, while negotiations over the lease with WildPlay continued.

WildPlay had sent a letter in September seeking $400,000 it argued it was owed, but also stated it was willing to work with GNSS “to reach a successful outcome.”

Today, Taylor said the new arrangement proposed would see investors purchase the WildPlay franchise and equipment at the hill with the Friends Of Mount Sima operating it through. A clause in the potential agreement would allow the Friends Of Mount Sima to purchase the WildPlay park once investors get their money back.

If, for some reason, the franchise wasn’t successful, he said, the investment would be secured against the sale of park assets.

The agreement would see the facility run on a one-year lease that could then be renewed annually rather than a long-term lease it is in now.

As a WildPlay facility it would continue to meet all safety standards required by the company.

To make the summer operations at the hill a success, Taylor said the business model would be “significantly more conservative” than it was previously.

Rather than focusing on getting the general public to the adventure park through major marketing campaigns, the group would be focused on bringing various groups to the park such as camps, tour groups and such through the summer, though there would likely be some days that it would be open to the general public.

That would reduce the overhead costs, he said.

He noted two or three staff (along with some employees on call) are required to run the adventure park safely and that could mean summer employment for key winter staff working at Sima now.

As for smaller details like whether the restaurant would be open, Taylor said, “honestly, we don’t know.”

Those details would be worked out only if the deal goes ahead. As he stressed throughout the interview, nothing has been signed and the groups are still working on the deal.

The GNSS is “very pleased” with the potential arrangement, Hougen said this morning, adding that WildPlay has always been very flexible and helpful in finding solutions to issues at the Whitehorse park.

“The (park’s) never had a chance to prove itself,” he said, adding it hasn’t run for a full season.

With federal funding for construction at the park coming later than expected, construction was delayed and it didn’t open until August 2012 in its first year, which in turn impacted the hill’s finances.

Last year it was only operated until July 2 when Sima was shut down due to financial problems.

Hougen is confident the new business model will be the way to go next summer.

While WildPlay has been successful with a business model that markets to the general population, he said in smaller markets like Whitehorse it will likely prove more successful to focus on tour groups, guaranteeing business at the park on those days.

As the demand for the adventure park picks up it can increase the time it’s opened to the general public, Hougen said.

“We all learned a lot,” he said of running an adventure park.

That experience saw Sima officials go to WildPlay with the new business model as part of its proposal. While WildPlay hasn’t operated on that business model before, Hougen said they agreed it made sense to do so in the Yukon.

Many ski facilities are finding they need summer businesses for many reasons including staff continuity, finances and so on.

That’s why WildPlay was added to Sima, Hougen said. The Vista Ridge ski facility in Fort McMurray, Alta. is another ski facility that will be adding a WildPlay park for next summer.

While the Hougen group is not among the investors involved in the WildPlay purchase, Hougen said the company purchased a $30,000 Snowcat from GNSS and is leasing it back to the Friends of Sima for $1 per year. When GNSS was selling off assets to pay off debts, there was significant interest in the machine from another ski facility. The Hougen Group purchased the equipment in order to make sure it stayed in Whitehorse should Sima re-open, as it’s vital to the operations.

If the proposed agreement with WildPlay goes ahead as planned, the 10-year-lease between WildPlay and the GNSS would be scrapped and WildPlay would give up any right to litigation with the GNSS, Taylor said, though it was once again noted that WildPlay has been more than willing to work with Sima officials to reach a solution.

While the Friends Of Sima had initially been focused on re-opening Sima for the winter season, Taylor said it became increasingly evident that summer operations and the long-term viability of the hill were going to have to be considered and, regardless of whether Sima was opened, the WildPlay lease had to be tackled.

“That’s what’s driving this,” he said.

He wouldn’t say how much of an investment the local WildPlay franchise would be, though he said it would be enough to provide a settlement with WildPlay, provide capital to begin operating and have a little bit in the bank.

Support from local businesses evident in sponsorships through the winter also appears to be coming through for potential summer operations..

It’s another “incredible example” of the community coming together to support the facility, he said.

In an interview Thursday afternoon, WildPlay’s vice-president of franchising emphasized WildPlay is continuing to work with Sima officials to come up with a solution for its facility.

“WildPlay remains at the table,” she said.

CommentsAdd a comment

June Jackson

Jan 31, 2014 at 4:52 pm

I wish these folks all the luck in the world with this endeavour..

I am not the only person watching SIMA. As long as governments, City and Territorial.. are not funnelling my tax dollar into this project..and it can make it or break it on its own like any other business.. good on ya’.

What?

Jan 31, 2014 at 7:19 pm

1. How is Hougen and GNSS still involved?
2. Has GNSS not disbanded yet?
3. Of course the snowcat was leased back for $1.00 ... without the hill open the ski shop would not make any money.

It’s obvious that “conflict of interest” is alive and well at the Ski Hill.

Yukoner

Jan 31, 2014 at 11:13 pm

They just don’t get it. The ski hill works as a small winter family hill. Give up on the dreams of a year round do everything hill. It has been proven that the Wild Play doesn’t work. Buy out the franchise and be done with it.

Max Mack

Feb 1, 2014 at 1:50 am

Is this another “look what’s in my hand” magic trick to fool the public into publicly bailing GNSS?
Look out for the backroom deals being cooked up on this one.

Yukon Skier

Feb 1, 2014 at 8:05 pm

Two years were not enough for them to understand. This crazy (stupid) project was one of the origin of the problem with Sima..and they want to do it again and again..easy when you deal with someone else money…
Good for them to have Vista Ridge in Fort Mc Murray as a model…this ski hill is a disaster too there is nothing to learn from them…First things they should learn about is about the mistakes done before…but we are far away from that, Sima is politic is not about responsibility.

math is fun

Feb 4, 2014 at 4:30 pm

Just checking the math. 12 investors putting up $15K each is $180K. Various levels of government have put $1.5M into the project to date. So basically 10 cents on the dollar. Not a bad little deal for these as of yet unnamed “investors”

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