Thursday, February 14, 2008

Gunflint Lodge Prepares for the Next Kerfoot

The following email was received from Lee Kerfoot of Gunflint Lodge-

At Gunflint Lodge we are in the process of trying to transition from one generation (Bruce & Sue Kerfoot) to the next (Me). The resort does not generate anywhere near the necessary cash flow to pay for the shares of the resort my father owns, even at a severely discounted rate. We need to come up with the financing to pay for this transition.

We will be taking 13 of our already existing cabins (there will be NO new construction) and creating a planned unit development. The cabins in the PUD will be sold as 1/5th fraction, which is technically a timeshare. We will be protecting all of the open space in the PUD so it can not be built on in the future. Once these cabins are sold Gunflint Lodge will be the management company and will rent these cabins. To someone eating in our restaurant or just renting a cabin, nothing will look different then it does now. It will continue to look and operate as one resort called Gunflint Lodge. Some of the cabins will have multiple owners, but Gunflint Lodge will be cleaning them and making sure they are properly maintained. Obviously since we will be renting the cabins in the PUD it is in our best interest to ensure they stay in good shape as they would reflect back on the rest of the property.

The alternative to not doing a timeshare is to either sell some of the land (which will ultiately be developed by whom ever purchases it), or to do a residential planned unit development (which has other significant negative implications), or we could build a hotel (again this has many negative implications). We have no interest in doing any of these, and we believe by creating the proposed Planned Unit Development it will keep things the same and the property will not significantly change.

In summary we will be building NO new cabins, we are trying to change things as little as possible, we do not want to build a hotel, or ask for a residential PUD, and we will be protecting in perpetuity all of the common space inside of our proposed PUD. Additionally we told the Gunflint & Loon Lake Home Owners association about this at their annual fall meeting. Furthermore we also told the Gunflint Trail Association about our plans at their annual fall meeting.

If you would like to discuss any of this further please call me and I will be happy to answer your questions as best as I can.

Regards, Lee Kerfoot

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