Sale of stocks?
With 54 questionnaires in so far, a lot of options for the future of the Osceola Tug Hill Cross Country Ski center have been suggested. A land trust, non-profit entity, State purchasing solely or with the assistance of an outside agency or group. The one individual who was looking at purchasing at least at the current time, seems to have taken a step back and is out of the equation.
With the backing that has been shown so far, conversations can be initiated with groups like the YMCA, Boy Scouts or existing businesses like Planet Fitness. We can show that 50 to 70% of purchase price can be raised by a core group of skiers, kick starter programs etc. We are a business that after the initial purchase price, revenues would more than cover operating cost. Would your organization be interested in operating the ski center as an added benefit to your membership?
A vast majority of the returned questionnaires have responded that they would be willing to buy stocks to keep center going. There is a fairly even split between dividends and reduced prices at the ski center. My concern is the logistics of selling stocks. Someone would have to maintain stock ledger, pay dividends or disburse reduced prices, 1099 form’s would have to be generated for any dividend paid. Would they also have to be generated if reduced prices are given as that would also be value disbursed? The $1000 per share price was for everything – business, ski inventory, grooming equipment and while I currently own all the property, that too would be deeded to the corporation and included in the stock price. I am hesitant also in selling stock for a second and even bigger reason. If I sell my stock and the new operators do not do a good job and the skiing is not good. Are people going to be mad at the corporation, the new operator, or me?
Another option would be for people to buy a share at $550. $50 of the $550 would go into a reserve fund that all three board members would have to agree on for new equipment, trail expansion etc. At the $550 per share price I would still own the property and rent the property to the group at the same rate the corporation pays me now and that is taxes paid + $6000 per year rent. At the $550 per share price point, all share holders would get a life time membership to the ski center. Life time memberships would be limited to the 500 available shares. These memberships could be sold by the owners to other individuals if they were no longer skiing. Advantages – less risk for skiers with memberships and also for myself without the property being put at risk. With owners getting memberships there should be no issue with having to generate 1099 forms. Dis-advantages – Ski center would be run more like a non-profit entity and grooming would vary year to year depending on who would be staffing the ski center. Staffing would be paid for with 25% ? of all trail fees and equipment sales being put into a payroll account. Taxes, heat, insurance, rents, phones etc. would have to come out of operating funds.
As I have told skiers since this has started, I will guarantee that I will run the ski center through the end of next year. I will be hiring help next year to help me. This takes some of the burden off me and hopefully gets a feel for who would run the ski center down the road. If this formula works out, I might stay involved for a couple more years.
Best outcome is still for an individual or group to buy the center outright. We will not start doing any thing with the sale of stocks until next year to make an outright purchase as easy as possible. No one has stepped forward to get the process of a land trust or non – profit started. It makes more sense for who will be involved down the road to be familiar with these entities than for me to set up and then leave. Still trying to get the State involved. I will make a trip to Prospect in Vermont to see how they set up as a non – profit once we close for the season.
Thanks for your patience in this matter. It is to important for my wife and I to be able to retire. It is also important that the ski center stays open Therefore we hesitate to rush into a path that does not accomplish what it needs to do.
SUMMARY OF MARCH 2 MEETING
At the end of our ski day March 2, 2019 we had a meeting of around 35 individuals to discuss what is in the future for the Osceola Tug Hill Cross Country Ski Center. My wife and I are getting ready to retire and would love to see the ski center stay a ski center. All present seemed to agree that the ski center should continue. Many options to keep the ski center open were discussed. Currently there is an individual that would like to take over. The main problem is that due to the value of the business, property and assets, banks are hesitant to lend the amount of money needed to a seasonal business.
After consulting with lawyers and accountants this individual will decide if he wants to proceed and connect with the group about possible alternative funding sources. The main focus of the group was to obtain the funding needed and lend to the individual at a better interest rate than the banks can or will offer. Details on the fund raiser will be defined more as the process continues. In the effort to get the right balance in this effort I have enclosed a quick questionnaire below so as to get a better feel for the best way to go. During the meeting, a combination of selling existing stocks or forming something like an investment club seemed a possible solution. Various ways to raise the monies needed include approaching other area businesses such as B & B’s, hotels, food and drink establishments. Online fund raisers like a go-fund me page and kick starter were also brought up. I am not sure how this would work, but many younger computer savvy minds around that could help.
The agenda for the meeting was:
All of the above are still on the table. By filling out and returning the following questionnaire to the Osceola Tug Hill XC Ski Center at 1486 Osceola Road, Camden, New York 13316 we can get a broader opinion of where to take this process than just the thoughts of 35 individuals.
QUESTIONAIRE: available at ski center or print out and mail to us.
Are you currently a cross country skier? Yes ____, No ____
Have you ever skied at the Osceola Tug Hill Cross Country Ski Center? Yes ___, No ___
If existing format of the corporation remained and we have 500 shares to sell
Would you be interested in purchasing a share at $1000? Yes ___, No ___
If yes would that be 1 share ____, if more than 1 share how many? _____
Would you prefer dividend Yes ___, No ____ or reduced prices at center Y ___, N ___
If shares are sold, elected board of the corporation would determine what if any dividend (2% to 3% estimate), or other benefits would be given to stock holders.
If you would like to contribute to the continuation of the ski center, but at a lessor commitment than the purchase of a share, what would be best for you.
A donation to group trying to raise money for a loan to new owner? Yes ___, No ___
Online fund raiser such as go-fund me or kick starter? Yes ___, No ___
Would something like a 5 year membership be of interest to help with
funding needed? Yes ___, No ___
Would you send letters, e-mails or call elected representative to try to get a government
entity involved in purchase of property so that a nonprofit could better afford
to operate the ski center? Yes ___, No ___
Would you contact a college or university to help get them involved? Yes ___, No ___
If you are already in an investment group? Would you introduce our ski center to
your group? Yes ___, No ____. Not currently in such a group ___
Would you be interested in approaching area businesses, alumni groups etc. about
helping with needed funding? Yes ___, No ___
Do you have any thoughts about how to best keep the ski center open. Please include your contact information with name, address, phone number and e-mail
Please send to Osceola Tug Hill XC, 1486 Osceola Road, Camden, New York 13316
OSCEOLA TUG HILL CROSS COUNTRY SKI CENTER INC.
Saturday MARCH 2, 2019 AT 6pm
Any and all interested parties are invited. Meeting will be held at the ski center.
Purpose: Determining the future of the Osceola Tug Hill Cross Country Ski Center
First and foremost – The ski center is FOR SALE
My wife and I have built and run a very special place to a lot of people.
Our ski center is a profitable business that we have enjoyed running for the past 39 years. While it is still enjoyable, we both feel that we need to have the freedom to spend more time with our family. Not limited to, but especially with the grand kids.
Our guarantee is that the ski center will operate until at least the end of the 2019 – 2020 ski season:
We will start selling next years memberships on March 1, 2019. We have done this the last 10 years to help with summer maintenance cost of the trail system. By continuing this practice we will be able to keep improving trails making the skiing the best we can and making the ski center more viable for the next owners. If health or other circumstances make opening the ski center for the 2019 - 2020 season impossible, all membership monies will be refunded.
At the completion of the 2019 – 2020 season ( without new ownership ) we will make a decision to run for another year or to close. The closing of the ski center is not the option that we or anyone else wants. If we do decide to close the ski center the property would be sold and activity on the property would be determined by new owners. Highest value of property other than a ski center would probably be an out of state snowmobile club.
Options for keeping Osceola a cross country skiing destination:
1) Individual or group buying the ski center outright.
2) Being a corporation, we can sell stock to an individual or group.
The property, business with assets etc. is selling for $497,000.00
We have up to 500 shares of stock without par value available.
Each share or stock would sell for $ 1,000.00. Each share or stock would have one vote on decisions made by ski center. Some of the decisions that need to be made include, who to hire to run ski center, compensation paid to staff, what to charge for skiing and equipment etc.. Decisions can also be made as to benefits to stock holders – examples, free guest passes or memberships to stock holders, dividends paid to stock holder of 1-3%. The board making these decisions can be all stock holders or a limited number of elected individuals. The board could also explore the possibility of taking the ski center into non-profit status as others including Craftsbury in Vermont have done. The only way selling individual shares or stocks works for us is with a minimum of 200 shares sold initially to various individuals or a group.
3) Non-profit status – One of the biggest advantages to a non-profit is the availability of grant monies not available to a for profit business.
4) Exploring the possibility of a Government – State or County to purchase the ski center. As 50% of our skiers come from out of state, we provide a big economic boost to this area. A campaign would need to be put together to let for example the State know that there is a lot of support for acquisition of a ski center by the State in an area that actually gets snow.
5) Contact Colleges or universities to purchase and use our ski center as a working lab for their students.
6) Possible other directions that we can go. Hopefully any other options available can be discussed at the March 2, 2019 meeting.
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Osceola Tug Hill XC Ski
1486 Osceola Rd
Camden, NY 13316
Phone: +1 315 599 -7377