The Glen Arbor Sun interview with Liko Smith

Eneliko “Sean” Smith, Sugar Loaf resort’s enigmatic, aspiring new owner

Glen Arbor Sun: It’s been interesting to see how the local papers have reacted to an outsider coming in and hopefully acquiring Sugar Loaf. What do you think about the local media’s reaction to you so far?

Liko Smith: Sugar Loaf is a very emotional issue. Being an outsider meant that I really didn’t know how much. But for me this is an investment. A lot of people are very passionate. I translate that emotion into inherent demand. I wasn’t surprised about the passion, because I’ve done lots of high-profile projects in my life. Because it’s a very emotional issue, that can help me and hurt me at the same time, being an outsider. There’s a lot of passion here. A lot of people have skied her, and a lot of people have memories of the place. So I understand that it’s emotional. From an investor standpoint, that creates an inherent demand. But am I surprised? I’ve done a lot of projects in my life — a lot of them were high profile. You take the good with the bad when you’re an investor. It comes with the territory.

I know what I want do, so I’m going to go out and get it done. The bank’s in place, Kate Wickstrom’s in place, Ed Fleis is in place. The players are in place to get the deal done, so the emotion doesn’t affect me all that much.

(The media) likes to think that their job is to report the news, and while that’s true, they don’t operate in a vacuum. How you spin your coverage to some degree affects the public perception, whether you’re being fair and balance. I don’t want to be an outsider, and that’s why I’m moving here. Secondly, there are a lot of jobs tied to this. If you spend too much time demonizing the person who’s bringing in the projects for you, there might be fewer jobs — only 75 jobs when I could have brought in 200 jobs. There is a repercussion.

The only kind of guy who would buy this resort in this type of economy is a guy who knows what he is doing. If you don’t know what you’re doing and you’re just a happy-go-lucky guy who walks in with a ton of money, your investments will get taken advantage of. Yet apparently that’s the only guy who will pass the muster with the local paper. In other words, in order to be liked by the paper, you’re inherently going to fail. You’re going to be squeaky clean and not have a track record, not have done any bad deals. The reason I have bank financing is because I’ve done a lot of deals. Banks weigh their options and say, ‘OK, we’ll finance the guy’.

When I was first approached (about Sugar Loaf), they wanted to know my master plan. ‘What’s your master plan?’ That’s equivalent to a guy walking into the emergency room with a gunshot wound and he’s seen by a physical therapist. That’s so far from what’s needed right now. Why don’t we just get the hotel open, and then the resort open, and then see what happens? Until we do those two things, we don’t even know if there’s demand yet. Then you’re telling me to structure demand for four-five years from now? I don’t know if there’s demand six months from now.

But I do know this — people want to ski at Sugar Loaf and there are 17 wineries, and I know that I’ve got a horse trail where people can cross-country ski. I know the grounds are pristine. I know there is a tremendous amount of people willing to go to work — because unemployment in Michigan is close to 20 percent. I can only deal with what I know I know. What I don’t know, I don’t know. I won’t know until I know it. There are things I don’t know yet, and until I know those things, there is no master plan. There seems to be this idea that this guy will come in here and know what’s gonna happen five years from now.

The real Liko Smith

Sun: Who’s the Liko Smith that you want people to know? What does he do in his spare time? What does he read? Watch on TV? Like to eat?

Smith: Well, you know, aside from working, I’m a pretty boring guy. I’m on my laptop a lot to do work. I go to Borders sometimes to watch people, I watch a bit of Fox News.

Sun: Do you cook much?

No, I don’t cook much. I travel a lot, so I eat out a lot. I probably eat out four nights a week, except when I stay home and work, then I’ll make some garlic bread or French bread or something like that. Cheese and crackers and some wine, and just relax.

Sun: Do you still box? I know that you were a boxer in your younger days.

Smith: Yeah, I was a boxer for a long time. Whenever I settle down, I’ll start boxing again. Here in Traverse City, I’ll find a good boxing gym and start again. It’s really the key to get me to work out, because I’m more of a linear person. I used to box for the Army and box for the U.S.A. team. It got to the point where I wouldn’t even go to the gym if you weren’t sparring — it seemed pointless. You don’t get into boxing to hit the bag or hit the mitts. So it takes me longer to find a gym because I’ve got to find a place where people actually spar instead of just learning the art. I haven’t found one yet in the Traverse City area.

In Monterrey, California, I started teaching kids and adults how to box. That kind of helped me too. I made sure they weren’t going too hard at each other. I have a very scientific way of teaching boxing. But at the same token, you can have all the knowledge about how to box, but until you step into the ring, it doesn’t really matter. So I usually go places where I can actually box. Even when I was opening and running The Block Hotels in 2005, I managed to train and was able to compete enough to go to the Oceania Games, even at 34 years old. That was the last time I could fight at the Olympic level.

Sun: Assuming that everything goes well with the Sugar Loaf acquisition, there are lots of good recreational things to do in our area — swimming, biking, kayaking — what might begin occupying your spare time?

Smith: If time opens up for me, I could see myself horseback riding and jogging, and spending time around nature, something I haven’t done much over the last 39 years. I’ll probably also get back to snowboarding. My 12-year-old son Rey is in Vegas with his mother. He’ll come visit me as often as he can.

Sun: You and Sarah recently got married. Congratulations. When did you tie the knot, and where?

Smith: It was March 12, at the Troy County Courthouse. Then we went out to dinner afterwards. Sarah and I met on the island of Samoa. I was out there on a project, and she was singing at a resort. I thought she was quite enticing. I didn’t ask her out then. It took me a while. Six months after that I asked her on a date, and things just kind of progressed.

Sun: How’s her singing career going?

Smith: It’s going great. She has sung at every place I’ve been to. Las Vegas, Orlando, Santa Barbara, Detroit. As a matter of fact, she sang at the Top of the Park (in the Park Place Hotel) in Traverse City a few nights ago. She sings a very unique classic jazz and has a beautiful voice. She took the mic (and played with local pianist) Tom Kaufmann. It was really nice. Sarah’s singing is excellent. It also helps me relax.

Sun: If you were to make an analogy, what performer does she sing like?

Smith: Her voice is classical. Norah Jones would have to be closest. If Mary Chapin Carpenter and Norah Jones had a baby, that would be it. (See a YouTube video of Sarah Frances Johnston performing “Bewitched, Bothered and Bewildered”).

Sun: By the way, do you prefer to be called “Liko” or Sean?

Smith: I go by Liko when I’m doing personal projects, because everyone knows me, especially in Samoa or in Las Vegas. When I’m working in the Midwest or on the East Coast, I use Sean, my middle name, because I gotta tell you, if you’ve never had a unique name, when you have a common name, it’s so much easier. Nobody has to ask about your name or how do you pronounce that? It saves a lot of time and energy. It’s just easier to get things done, because you don’t have to deal with that whole ‘Where you from?’, ‘What do you do?’ stuff. It’s just Sean Smith.

Adjusting to the Heartland

Sun: From a business perspective, from a marketing perspective, how do you find the Midwest compared to, say, the West Coast?

Smith: I don’t know yet. I think that in a lot of ways the Midwest sells itself short. It has a lot of unique attributes, but then it could just be unique to me because I’m from the West Coast. The Midwest has been primarily known for farming and automotive, not withstanding the musical talent that comes from here that seems to be very creative —especially names like Kid Rock and Eminem. Sports are a big part of the local culture. As far as business acumen, business and agriculture have been done in the same way for quite some time — assembly line or union thinking.

I think that if you can be a maverick in the Midwest, you can do some amazing things out here. That’s all over the West Coast. (If you open a resort) in L.A., it’s just another hip hotel — whereas out here, if you can create something unique, then it can be very successful.

Typically (the Midwest) is very utilitarian. At the end of the day, the people in the Midwest are real “meat and potatoes”. You have to really do it. You can’t just create some gimmick environment. In L.A. you can halfway deliver something, and as long as you’re close enough, people will accept it. I think in the Midwest you’ve gotta be more substantive. Overall, I like the Midwest. I like the people here. Sarah and I both enjoy it here. It’s a much better environment for family, a decent environment for business too.

Sun: How long do you plan on staying in the Cambria Suites in Traverse City? Will you move somewhere a little more permanent?

Smith: We’re looking right now. I think we’ve found our place — a place on the lake. We wanna get to know the place a little bit more. Right now we’re looking to relocate to Northport.

If you’ve lived in Lake Tahoe during the season, you know that it’s bumper-to-bumper traffic. This place allows me to come home to a quiet house, and also allows me to go straight to Sugar Loaf. I can take a step back from the tourism.

Sun: Where do things stand now with Sugar Loaf? How are things coming?

Smith: Things are coming along great. Right now we’re in the final process of closing (the deal on) the Ed Fleis properties — the wastewater treatment facility, the development parcels on the other side of the mountain — because those are integral parts of the deal. Without the golf course — and not taking anything away from the previous owners — but nobody could have made it work the way it was structured. Nobody, I don’t care who you are. I don’t care how good you think you are.

Even having all the assemblage, I’m trying to bring in the best team that I can. I got guys who are top-shelf players in both marketing and food and beverage development, and golf course design. Even having all these assets, I’ve got to have the right product and the right marketing plan for that product. This is having everything under one roof. If I would have purchased the property the way it’s been purchased the last 20 years, I would be falling flat on my face right now, no matter who I am.

Sun: When are you hoping to finalize the sale.

Smith: April 31st. Coming right up.

Sun: Assuming that happens, what becomes your next immediate task?

Smith: The next big thing would be a 6 a.m. meeting with my renovation staff, and then probably a 4 or 5 p.m. wrap-up. I almost have the team in place. I will by the end of the month. I’ve gone through that (hotel) building a few times. We feel very confident about opening those 100 rooms.

Sun: July 4 is the date by which you hope to have everything open. What is the likelihood of that happening?

Smith: I guess right now … I haven’t been up to the top floors, the third and fourth floors. When I say ‘open the resort,’ I mean that whatever we do we’re gonna do right. So we may open two bars and one dining room, and 100 rooms. Unless something comes at me that I’m not aware of, there’s a big rainstorm or some fire breaks out — right now, without the deal signed on Ed Fleis’ side, I’d say (the chances of opening July 4 are) 60-40. But call me after the 1st of May and I can answer that question much better.

Sun: You did some pretty interesting things with The Block Hotels, style-wise, architecture-wise, and target-wise out in Tahoe. Will we see any of that touch here at Sugar Loaf?

Smith: You will to some degree. I mean, The Block was an accident. We wanted to try something new on some very dilapidated buildings, to the degree that we could. At the same time, the space was too small, the market was very seasonal, and the product wasn’t exactly what I was looking for. Nor did we own the mountain or the club or the restaurants. Now we (will soon) own it all, so I think it would be better to take a much more sophisticated approach. I think (Sugar Loaf is) gonna be much higher-minded. The touch of the village and the authenticity are more easily defined, they’re tied directly to Sugar Loaf.

So you won’t see New York at Sugar Loaf. You’ll see Sugar Loaf at Sugar Loaf. You’ll see memorabilia from the old days, the archives, the history of Sugar Loaf. We’d like to get all 17 wineries involved, and feature beers from all the breweries on our beer menus. I’d like to create an atmosphere that’s unique to Sugar Loaf.

Sun: Will you market to the snowboard crowd?

Smith: Absolutely. There will definitely be a terrain park and a half pipe, a 2,000-square-foot game room. There’s probably a good chance for an Xbox console. The “echo boomers” will definitely be represented. That’s an integral part to ski resort marketing.

Sun: I assume your son is excited about that.

Smith: Oh yeah, I already showed him the spot. That’s the last thing I do before I buy something, I show it to my kid.

Sun: Is he a consultant for you in terms of knowing what’s going to be a hit with teenagers?

Smith: Yeah, he is. He’s a consultant. There are a lot of people who know what they are doing. But 8-12 year olds, or 8-15 year olds aren’t to be underestimated. They’re very powerful consumers. Or, they aren’t consumers, but their parents are. At the same time, I’ve been to hotels that are kid-geared, geared for my son, but not for us. Sugar Loaf needs to be geared for everyone: the golf course for the father, the spa for the mother, the winery tours for the mother and father, the game room for the kids, and then you’ve got the snowboarding. You’ve got to have the horseback riding: the horse pens for the real young kids, the trails for the teenagers. No one should have to feel guilty about playing golf, while the wife’s at the spa, the kids are at the arcade. They can meet back and have a very relaxing dinner — as opposed to the father playing golf and everyone else just sitting around picking their teeth. There are also needs to be wireless Internet access so people can get work done.

Sun: Liko, you’ve mentioned Kate Wickstrom and Ed Fleis. Who are other folks that have been integral in the effort to get (Sugar Loaf) going?

Smith: There are four parties here: TransCapital Bank, Kate Wickstrom, Ed Fleis and myself. Carolyn Collins from Coldwell Banker has also been a wealth of information. She put me in touch with Kate Wickstrom. She’s helped guide the process ever since I first looked at the property. She’s sent me village materials and everything I needed to make a decision.

Sun: Tell me about “Friends of Sugar Loaf”. That’s Sarah’s project, right?

Smith: Sarah is putting together Friends of Sugar Loaf because we need as much memorabilia as possible. There’s almost none at the property. We’d like to decorate the inside of the property. She’s gotten a lot of emails. I haven’t checked the mailbox there yet, because I want to buy it first. But she’s gotten a lot of emails. I was tepid at first, but it’s picking up. We even want to hire an archivist, a librarian that comes in, gathers all the stuff together, archives it, puts it together and makes sense of it. Apparently, every high school that had a ski team would practice and compete there. So there’s all kinds of memorabilia. Hans Teichner (a native German who served in the U.S. Army’s 10th Mountain Division during the Second World War) was instrumental in starting skiing at Sugar Loaf.

There is a tremendous amount of history at Sugar Loaf. Not unlike the way the Hard Rock celebrates music history at their hotels. Not with that pizzazz, but I envision doing something similar to that with Sugar Loaf. We’d like to create a book that goes in all the rooms so that people can understand what it has taken to move Sugar Loaf from where it started to where it is today. A lot of the people involved are still alive.

There are lots of social networks already focusing on Sugar Loaf. I’d rather partner with them — they created this before it was cool to do it. We want to get to the people who have their hearts behind Sugar Loaf.

Sun: What will happen to the golf course at Sugar Loaf?

Smith: It’s been open for two years, but the golf course has had a real tough go with the hotel being closed. With the hotel being closed, people assumed that the golf course was closed too. They’re integrally entwined, but they had no reason to work together. So now that we also own the golf course …

Sun: Any remodeling or reshaping in store for the golf course?

Smith: I’m talking with Paul Albanese, who has a company that develops golf courses. I would like to improve the golf course and focus on a certain style of golf. There are definitely plans in the works for an 18-hole course, which is a good product to have in this environment. I’ve played golf after work and come back and gotten more work done afterwards.

The Polselli factor

Sun: Local media have focused on Remo Polselli and your relationship to him. What do you make of that focus on Polselli, and what’s your take on him?

Smith: I know Remo from when he came out to Las Vegas. To me he is as ordinary a guy as you can be. It’s perplexing to me that he’s been so demonized in the press. Granted, he had some issues 8-10 years ago. It just doesn’t make sense to me that there are guilty pleasures in some writers who demonize him so much. He’s a real nice guy. In his lifetime he’s probably owned over 90 hotels.

Not all of those deals went over swimmingly. I know he did some time (in prison), and that’s not easy for anybody. But as far as what I know about him, he’s a very helpful, outgoing person, and he’s been nothing but a decent human being to me.

Sun: Have you asked Polselli for any advice on Sugar Loaf?

Smith: He has helped me along by explaining to me all the mistakes that he made — not being here full-time, not being here enough to oversee the operation, hiring people that weren’t necessarily skilled in the ski operations. A lot of what I’m developing as far as a plan is based on the mistakes that were been made by Remo Polselli and Kate Wickstrom. Using their mistakes to reverse-engineer my own plans.

Sun: As things move along, as papers are signed, and the deal closes, will you look to him, call him occasionally, for more advice?

Smith: Yeah, probably as things go along. It depends on what issue we’re talking about. In the very beginning, it was critical for him to explain to me what he did wrong, and what went wrong with his investment. In that sense, I sort of looked at ways to sidestep those problems, and what Kate Wickstrom did wrong. And also the history of how this mess got to where it is today. These are very top-level, high-altitude snapshots of the investment. As we get closer to getting on the ground and doing the work, I’ll probably be speaking to Kate and Remo less and less. Now we’re talking about now, today. We’re not talking about strategic issues, we’re talking about real-life, on-the-ground issues. Once we get down to little-altitude issues, I probably won’t be discussing Sugar Loaf with Remo and Kate.

Sun: Besides not being in the area permanently, what were some of the other pitfalls that Remo fell into that hurt Sugar Loaf?

Smith: Number one was the way the property was purchased. Regardless of what you think, that doesn’t help anything. Having the ski resort and having someone else own the golf course and the wastewater well is just a recipe for disaster. And the development parcels behind you. All the land on the other side of the mountain was owned by a third party, and that couldn’t have been helpful. Not to mention the fact that the general manager of the hotel had no ski resort experience. Nor did he want to learn any ski resort experience.

Sun: On top of that were two winters of little snow, right?

Smith: Exactly. And there wasn’t enough money spent on snowmaking because the general manager didn’t know enough about resorts. I gather that $700,000 to $800,000 should have made its way to the hill, in the form of snowmaking equipment. There were two bad winters. And they really had no summers because the person didn’t know resort marketing, didn’t know anything about packaging golf with rooms. They were only counting on the winter, and once they lost the winter, all they had was a losing operation.

Sun: Are you worried about what the snowfall will be like this coming winter? Is global warming going to affect profits?

Smith: Oh no, global warming has nothing to do with me. That’s something else. That’s between Al Gore and God.

My big investment is snowmaking. No matter what, the snow’s gotta be there. It’s like a hotel. When you walk into a basic business hotel, no matter what, you’ve gotta have the wireless. Same thing with a ski resort. The snow’s gotta be there. Our focus is on getting state-of-the-art snowmaking equipment. That’s our first focus for the resort.

Liko’s future

Sun: Liko, where do you see yourself 10 years from now?

Smith: I’ll probably still be here, probably working on developments that involve self-sustaining energy issues, and also the ecological living sites. I’d like to break ground on developing some self-sustaining, ecologically sound energy and living accommodations.

Sun: Interesting? What drives that interest? Is it moral, economical, environmental?

Smith: It’s to be able to do so once it reaches a certain level of cost. Also, there’s a demand for it. There’s a lot of looking for things that are more ecologically sound. And morally, I’ve always been that way. I’m not really big on tearing up landscapes to put in buildings. I’d rather come up with something innovative that works within the landscape. That’s not new by any means. But it’s the way that I think.

I’m very pro-worker as well. I want to bring in sharp people and pay them a decent wage. I’m not into cutting costs or bringing in robots to replace people. But if we can do something sustainable, and do something that doesn’t affect the environment, then we should do it.

Sun: How many jobs will Sugar Loaf create? What do you think?

Smith: Overall, at the end of the day, I think the resort itself will create a job number in the 70s. The (indirect) total will probably be 200 jobs. Think about opening the resort, and the businesses that will benefit. You’ve got downtown Cedar. You’ve got 17 wineries. There are six wineries directly adjacent, very close to the property. You’ve got downtown Leland. You’ve got downtown Glen Arbor. There are lots of people who will be positively impacted by the opening of the resort. It’s sort of the glue that brings in the customers from around the county.

Sun: Liko, how much money will it ultimately take to open up Sugar Loaf, and for subsequent projects to get everything running?

Smith: For the acquisition it’s about $10 million. For the renovation and improvements it’s about $3-5 million depending on how you look at it.

Sun: Thanks for the chat. Anything else you’d like to add?

Smith: There is one thing I’d like to say to people who are sitting out there waiting. I think I’ve read 1,400 emails from people hoping for Sugar Loaf to reopen, and that doesn’t include the Friends of Sugar Loaf. All I want to say is: ‘don’t just sit and watch, get involved. Do something. Take action.’ Do what I’m doing, right or wrong, just take action. Move forward. If you have an opinion, send it in. If you have materials, send them in. If you know about a person that may help us, send us an email. But don’t stay on sidelines.

It’s gonna take a tremendous amount of human effort to reopen by July and reopen the hill by Christmas. As a businessman, I know that it’s always twice as hard as you think it’s going to be. I’m an eternal optimist because I know that when I get hit by that second or third wave I keep going.

The next day Liko Smith answered these follow-up questions via email:

Sun: Liko, what are your best qualities, and how have you employed them during your career?

Smith: The best qualities I have employed in my career are the same that I employ in life, fearlessness and leadership. Also, an understanding of being able to get things done through people much more qualified than yourself in the areas you require; I haven’t always been this way, life leads you through a series of transformations as a leader and as the stakes get bigger, so should your leadership skills and I’m lucky that is the case in my life. It hasn’t always been a straight line but it’s definitely been a transformation. Also, delivering 110 percent all the time, I think it’s important especially when times are good, because the inclination is to do the opposite, and I only stepped away from that once when I was having personal issues;..never again. I keep myself in check now … at all levels … good or bad day, it’s the best day I could come up with … for now.

Sun: In turn, what qualities or attributes are you less than proud of? How have you learned from them? And what mistakes have you made in the past?

Smith: Well, that’s an easy one. I got egotistical for a short period in my career because everything I touched sort of turned to gold, real estate, TV, speaking circuit, etc. and then things got shaky for about 18 months and I literally had to slap the sh– out of myself and get myself back on track, Back to “transformation” it was all part of the learning curve, I’m thankful that it happened at a much smaller scale than I’m at today and I developed a better understanding of myself. I’ve seen things the last three years I couldn’t explain; business owners going from multimillionaires to nothing, and watching some people just give up … it was important that even at my worst, I never tied my self image to what I was doing but always to who I was, so I always kept my center and that has made all the difference. The lessons I learned in business are on my website, but the lessons I learned in life are three very simple rules 1) always ask questions 2) never assume 3) surround yourself with good people, everyone is susceptible to overconfidence, but not everyone can come back from it. I remember, being a fighter, its very easy to defeat the guy that doesn’t mind losing, he’s a loser, it’s even easier to beat the guy that’s overconfident because once you take away his confidence, he gives up, but it’s nearly impossible to beat a guy that just likes to fight because he’s not going anywhere … that’s how I feel about hotels, I was born to own hotels.

Sun: Finally, is this move to the Midwest an opportunity for you to start fresh, both in terms of business, (marriage) and reputation?

Smith: Yes, but not really, I regained my reputation by working hard and making results for some other partners and on a daily basis, being smarter than I was when my reputation was being questioned … but it was always there, intact beneath all the BS and drama that unfolded from my last company. The move to the Midwest is an outward manifestation of better decisions as a businessman and a person. Marriage is a big part of it though. Starting fresh with Sarah is a big part of my life. We basically put the kabash on our wedding plans because of Sugarloaf; I told her that I was going to go for it, and it would take at least a year or two from my life and I couldn’t promise a wedding day until it was all said and done and settled. We decided to get married in Troy (downstate), and then Sarah let me pursue what she knew I would pursue. The life of a hotelier’s wife isn’t for every one., we work to understand each others’ passions.

Sun: And I know that you came upon Sugar Loaf in serendipitous fashion. What were the chain of events that lead to you and Sarah vacationing in northern Michigan in the first place? And what were your immediate impressions of this area — both good and bad?

Smith: I was working on a couple of hotel projects in Troy and Romulus. Our Troy hotel had an agreement with Grand Traverse for discount rooms, it was Valentine’s Day and we decided to drive up in the snow as we didn’t feel like flying to Vegas. The area is beautiful, the selection of things to do, restaurants, etc, was excellent and the roads easy to navigate, I was extremely impressed. I’ve been to resort towns worldwide — Italy, Austria, France, Switzerland, Poland, Spain, Denmark, Sweden, and in the United States, — California, Colorado, Vermont, New York, and Traverse City has it all. When I found out that Sugar Loaf was the only place for snow sports, I couldn’t understand why it wasn’t open. So the questions lead to more questions, which lead to conclusions. We’re still working on the answers. I think I’ve got a top shelf team for Sugar Loaf and we’re still working on the answers, but not having any movement is the wrong one. This is the time to move forward.