2011 and Earlier / Outdoors

'Loaf update: Trails ready, lease unsigned

An opportunity to open Sugar Loaf Resort for cross country skiing and other outdoor activities this winter may be melting with the snow — or not.

Organizers of the non-profit Sugar Loaf Mountain Club are turning up the heat — or sweetening the pot, depending on your point of view — to persuade resort owner Kate Wickstrom to sign a lease agreement that would allow them to move forward with their plans to bring the ski area back to life after being closed for nearly 12 years.

“There’s still plenty of snow on the ground, the cross-country ski trails are ready to go, and we even have a surface lift ready to get snow tubers up the hill,” said Erik Zehender, an organizer of the Sugar Loaf Mountain Club.

“The Club also has a transaction-capable website ready to sell tickets and build membership — but it will not be launched until a lease is signed,” Zehender said. “A signed lease is really all we’re waiting on right now.”

When discussions were underway last year between Wickstrom and organizers of the nascent non-profit organization about plans to revive Sugar Loaf “one small step at a time,” Wickstrom agreed verbally that she would not seek rent from the club in its first year of operation, according to Zehender.

“But she changed her mind – so we got our lawyers to write up a new lease agreement that will give her up to seven percent of the gross receipts from operation of the club in the first year, or a minimum of $500, whichever is more,” Zehender explained.

“I’ve checked around the country, and the industry standard for the lease of a mountain for skiing from a property owner is one-percent,” Zehender said, “so this is a pretty generous deal for her because the lease agreement also ensures she has no liability and incurs no cost whatsoever.”

One of the sticking points, however, appears to be a determination of parties that must be named on an insurance policy the club plans to acquire for a $7,500 annual premium. The policy requires that the names and addresses of those covered by Wickstrom’s title insurance also be named on a policy covering her and the Sugar Loaf Mountain Club should any accidents occur on the resort property.

Wickstrom acknowledged last year that she has not made any mortgage payments on her property in many years, and was at a loss to explain why those holding her mortgage had never foreclosed on her. Among those backing a mortgage on the resort is Hanna Karcho-Polselli, the wife of a former owner of the resort, Remo Polselli. Polselli is no longer able to hold an interest in such properties as a consequence of his felony conviction years ago in connection with another of his former properties.

Polselli told the Enterprise last year that regarding Sugar Loaf, “Powers way above me are controlling that property.”

Polselli declined to say who those “powers” might be, however.

“Given the community priority to get a lease signed as soon as possible so that some skiing and tubing can still take place this winter,” Zehender said, “Tim Haring of Leelanau Peninsula Title and president of the Leelanau Peninsula Chamber of Commerce has agreed to update for free the latest title search he is aware of on the property.”

Zehender added that the Sugar Loaf Mountain Club has taken numerous other steps to ensure the process of operating the club at Sugar Loaf goes smoothly. In addition to getting a website ready for launch, arranging for insurance, arranging for a title search, and hiring lawyers to draft lease agreements, the club has also:

• Filed articles of incorporation with the Michigan Department of Licensing and Regulatory Affairs.

• Obtained an employer identification number with the Internal Revenue Service.

• Joined the National Ski Area Association

• Acquired about $10,000 worth of ski trail grooming equipment.

• Prepared ski trails and other amenities at the resort.

• Repaired a surface lift that could be used for snow tubing at the resort.

• And brought a state inspector to the resort to assess other ski lifts there.

“We’re very confident that with a little money, time and effort over the summer, we would get the ‘triple lift’ operating by next fall so that a number of the slopes could be used by downhill skiers in the 2012-2013 season,” Zehender said. “Right now, though, we just need a signed lease agreement.”

Asked to comment on the situation this week by an Enterprise reporter, Wickstrom responded by email, saying that she had received the latest revisions of the lease document from attorneys just last week.

“In speaking with Erik (Zehender), I have offered several options,” Wickstrom wrote. “(I’m) just waiting to hear back from him and the Club.”

Zehender said this week he had not heard from Wickstrom since she was presented the new lease proposal last week despite several attempts by him to contact her.

By Eric Carlson
Of The Enterprise staff
eric@leelanaunews.com

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