As acquisition date nears, hurdles loom for Sugar Loaf resort

Eneliko Smith linked to Remo Polselli through business ties, but Smith maintains, “I’m nobody’s front man”

By Jacob Wheeler
Sun editor

Eneliko “Liko” Sean Smith still plans to acquire Sugar Loaf resort this spring from Kate Wickstrom, and open the long shuttered ski hills this coming winter, though he might not ink the deal by the end of this week as originally planned. (In a previous interview with the Glen Arbor Sun, Smith had inadvertently named April 31 as the targeted date — a fictitious date, though that fact initially eluded both Smith and this journalist.)

Photo by Karl Kitchen

“Where we stand now, I’m making Kate feel comfortable that nothing will come back to haunt her,” said Smith during a phone interview earlier today. “I’ve got to feel comfortable that when she signs the property over to me, I’m not going to find out about something three months down the road.” Smith has set a personal deadline of closing on the Ed Fleis properties adjacent to the resort by this Friday — before he purchases Sugar Loaf itself.

On Friday night, April 30, Smith will hold a Quad Fund mixer in the Lotus Room at Red Ginger, a restaurant next to the State Theatre, in nearby Traverse City (For more information, visit www.LikoSmith.com). Approximately 100 people who have paid $100 to Smith through an online PayPal account will gather from 6-9 p.m. to “Discuss the plans for the December Opening with Liko Smith, the new owner of Sugar Loaf”.

Smith confirmed that over 100 locals have committed to the Quad Fun — many of whom are professionals (textile and carpet manufacturers, ski resort management operators), says the Samoan boxer turned businessman. Those investors would clearly benefit if Sugar Loaf reopens. The event will likely exclude debate about whether reopening Sugar Loaf this year is wise, and whether Smith is the right man for the job — both the subject of village chatter, from coffee shops to online forums. “We don’t really have time or convenience for a town hall gripe session,” Smith said. “We’ve got to get going on this.”

Liko Smith also categorically denied that Remo Polselli or his wife Hanna Karcho Polselli have any role or financial stake in the Sugar Loaf acquisition. Remo owned the resort from 1997 until 2000 and was sentenced to prison in 2003 for tax evasion — unrelated to Sugar Loaf. Kate Wickstrom purchased the resort in 2005, but Hanna Karcho maintained a financial stake, and the Leelanau County icon remained closed. Theories have abounded among locals that Smith was a “front man” for the Polsellis to reacquire Sugar Loaf.

“I’ve known Remo since I met him in Vegas three years ago,” explained Smith. “The most important part of our relationship is that, in no way, shape or form will he be involved in the ownership of Sugar Loaf. Not one dime. Not one penny of Remo’s money or influence will be involved. And that goes for Hanna Karcho as well. There’s no way in the world they will have any influence in this deal. It’s strictly a Liko Smith project. I’m nobody’s front man.”

Smith was pressed on his business relationship with Remo Polselli after a team of amateur local sleuths — acting on a tip from Travis Wood, a disgruntled former investor in Smith’s failed The Block hotel project in Lake Tahoe on the California-Nevada border — discovered an active link between the two men.

A call to Hotel Management Advisors (HMA) — whose website lists Smith as Corporate Director of Business Development, and which once used a virtual front desk in the Flynt Building in Beverly Hills, Calif. (owned by Hustler Magazine publisher Larry Flynt) — ultimately led to the Bloomfield Hills, Mich. phone number of Resort America, LLC, where Remo Polselli is an investment advisor, and whose name is registered by Krystol L. Rappuhn, Remo’s attorney. Rappuhn is also the agent for Palm Springs Investments, at Hanna Karcho’s address. The person who took a call last week at Resort America’s number answered for both Liko Smith and Remo Polselli, and said they were both “traveling”.

Smith confirmed that he was still “loosely involved” with HMA, “There are deals that others may have that I want to assist, because I’m good at what I do. But as far as Sugar Loaf, there’s been a lot of confusion.

“Sure I know Remo,” Smith explained. “I know Michael Eisner; I know Donald Trump, too. We’ve been in business a long time. Some relationships you maintain throughout your life and career. But Remo Polselli has enough on his plate with the hotels he owns.”

Smith called me back minutes later to defend Remo’s reputation. “I just want people to know that all my dealings with Remo Polselli have been positive. I wasn’t there 10 years ago. And from where I’m sitting, it doesn’t seem like he’s gotten a fair shake (by the local media).” Smith explained that Remo’s pitfalls with Sugar Loaf 10 years ago are the reason he has engaged the local media and communities as much as he has.

Liko Smith discovered Sugar Loaf while honeymooning in northern Michigan earlier this year, he maintains, adding that Remo Polselli never told him about the shuttered resort.

“He’s a regular guy who did a lot of real estate deals — some good, some bad — but he’s not a big bad wolf,” Smith added. “Since Remo found out that it was me who wanted to buy Sugar Loaf, he’s been my biggest supporter — knowing that he won’t be involved — because he knows where he stands with the local community.

“Instead of saying, ‘Screw you, guys,’ he has called me, saying ‘You gotta move there, you gotta be part of the community’. (Remo) isn’t an embittered person. ‘Do it,’ he’s told me, ‘But don’t do it the way I did it’.

“He’s a good guy, which is why HMA and Resort America are linked,” Smith concluded. “Five years from now, I could absolutely see myself doing a deal with Remo Polselli. But the one thing I won’t do a deal with him on is Sugar Loaf.”

Ski hill will require gargantuan effort

Phone calls to ski resort managers, both in the Midwest and nationwide, yielded mixed opinions about whether Sugar Loaf will ever turn a profit, and whether Liko Smith can open the hills by this winter — which is fast approaching, even though it’s still April.

Smith admits that only Lift 2 is salvageable: the others will have to be replaced. One of the questions he and his management team faces will be where to install the other lifts, and whether or not they need to be high-speed lifts. The water supply used to make snow is currently insufficient, but Smith intends to introduce a 4 million-gallon water well. He also said that negotiations have begun with a company in Australia that may be interested in leasing the mountain. The identity of that company — and what their role would mean for local skiers — are unclear.

Michael Berry, President of the Denver-based National Ski Areas Association, thought that reopening Sugar Loaf was entirely possible. Berry guessed that one could acquire new ski lifts and snowmaking equipment at Sugar Loaf for $4-5 million, and satisfy insurance company standards within two or three months (there are only two or three players in the industry).

Berry highlighted positive trends for the ski/snowboarding industry. He said that lift ticket sales have increased from 52 million to 59 million annually, mostly because three generations of Americans are now on the slopes: the baby boomers, their children, and now grandchildren. Berry explained that we are no longer seeing the drop-off rates that ski resorts experienced in the 1950s and ‘60s.

Furthermore, Berry said, snowmaking has become so much more efficient (since Sugar Loaf closed 10 years ago) that one can make snow in higher temperatures — provided those temperatures are still below freezing.

But one ski expert at a Midwestern resort, who asked to remain anonymous, doubted Berry’s optimistic prognosis for Sugar Loaf, and estimated that it would cost at least $10-15 million to buy equipment, make snow, and open the hills. He added that Smith would have to order lifts by next month, or there would be no way to get them in time for next winter.

While it’s true that the national ski market has increased, this expert said that skiing in Michigan is down by 10-12 percent as the downtrodden state has lost 1.5 million people and now boasts the highest unemployment rate in the nation.

“Sugar Loaf would have to pull skiers away from (nearby resorts) Crystal Mountain, Nubs Nob and Boyne. … The market isn’t getting any bigger. Sugar Loaf would have to draw from the existing players.”

While Sugar Loaf’s rigorous conditions make it excellent for training top-rate skiers, the challenging hills pose a marketing problem, he added.

“It’s an expert hill in a place where experts no longer make up the marketplace. Instead, you need a broad-based, family market approach, and the way Sugar Loaf’s face is set up, there aren’t a lot of beginner facilities.”

Stay tuned for more coverage of Sugar Loaf resort in future editions of the Glen Arbor Sun.