soulskier wrote:Yes, consumers support green businesses, it's been proven.
Same with Ben and Jerrys. Sure it tasted great, but as they developed their business, their brand recognition of helping out in the community as well as being values-based, set them apart from other great tasting ice cream.
I would submit that it was the "great tasting ice cream" part that was the primary driver, with the "green business" part being secondary. If Ben & Jerry's tasted like a stale Hoodsie cup, you would have never heard of them, irrespective of how green they were.
How do you feel about clean energy creation being budgeted into the start up costs of a MRA ski area, knowing that it could forever more offset electricity costs and possibly create another revenue stream in net-metering states? Also keeping in mind that by incorporating clean energy into the business model, rebates, tax incentives (that could possibly be passed on to investors) and grants would be available. Does that make business sense, why or why not?
I think it's a mistake to budget a big clean energy project (be it wind, solar, hydro, cold fusion - whatever) as part of your initial start-up costs. Your goal is to get into business and get profitable as soon as possible so you can ensure your long-term viability. Starting up, or re-starting a ski area is an expensive proposition as it is. Permitting, new/refurbished lifts, new/refurbished base infrastructure, initial marketing spend, designing an avi mitigation program and working capital - it all adds up pretty quickly, especially when your prime season is only 3-4 months long. And that only includes the stuff you KNOW you'll have to spend - the fun really starts with the stuff you had no idea was coming. What happens when the local govt tells you that the access road needs $500K of improvements b/c standards have been changed (better/bigger guardrails, wider shoulder, bigger/stronger culverts) or you discover that the septic system at the base isn't to code or they demand that you have an avi mitigation program for the access road even though the start zones aren't in your tenure/leasehold/property? For kicks and giggles, let's say it will take you $2MM to get into business. I think that's really on the low side, but it's a nice round number and reasonable people can disagree. The Jiminy Peak wind turbine cost $3.5MM to install, and it only generates 1/3 of Jiminy's electrical needs. Now, presumably an MRA resort won't require nearly the power that Jiminy does with its snowmaking, large base infrastructure and high-speed lifts. That said, there are significant fixed costs in any power generation scheme, so you're still looking at $1-2MM for a turbine that can off-set 100% of your needs. So you are now looking at possibly doubling your start-up costs in order to off-set the impact of an expense item which will represent a fairly small % of your total annual budget. In a world in which there's only so much capital floating around, for which competition is rather fierce, do you think that sounds like a wise idea?
Moreover, and this is just as important (if not more), you are looking at a tremendous amount of man-hours to figure out the byzantine permitting and tax incentive processes. These can vary by municipality, county, state/province, and country. You will be going all out to just get your core business up and operating - do you really think it's smart to divert your attention from those activities in order to understand what tax credits you may qualify for and whether or not you're allowed to drive a 50 ft turbine up a windy mountain access road? What if locals object to the despoiling of their "viewshed"? What if some unaccountable environmental group (who cares only about their wedge issue b/c that's what helps them raise money) files a lawsuit b/c they believe your turbine will impact the migration patterns of the Red Breasted, Woolly Toed Coast Mountain Thresh? What if the tax incentives change or are eliminated after the next election cycle? (Speaking of tax incentives, the idea that you would/could/should pass these along to your investors doesn't make sense to me - that's just going to raise the costs for you if you give that money away.) Are you prepared to divert more time, attention and money from your core business in order to deal with this? Do you think there is a bottomless supply of volunteer labor who will perform these activities on your behalf? Even if so, won't they need to be managed/monitored? Again, is that the best use of your time?
Think about it this way. What is your goal? Is it to start-up a kick-ass ski area that operates profitably on a low budget and acts as a good corporate citizen? Or is your goal to be a completely green "ski-energy center"? I would submit that unless you achieve the former, you can't achieve the latter. Getting operating and in the black is the "need to have". Entirely off-setting your carbon footprint (which is anyway impossible given how much carbon will be expended by your customers just to get to the mountain) is a "nice to have". There are a lot of initiatives you can take, for a LOT less capital, that can give you a much greener profile than your typical ski area. Examples are numerous:
- bio-diesel instead of regular fuel
- a shuttle service from town to decrease car usage in the valley
- better yet, a dedicated ride-sharing page on your website to decrease car usage in total
- having sheep graze your trail system in the offseason to cut and fertilize the grass
- solar panels on your lift shacks so they are off the grid
- waterless toilets
- state-of-the-art insulation/windows on all of your buildings
- volunteer days in the off-season to clean up any trash strewn on the hill or for run-off mediation
- no paper marketing brochures, or at least only ones that use 100% recycled fiber (same for trail maps)
- comprehensive recycling program for both employees and customers
This is just a short list based on 2 minutes of thinking. I'm sure you could find hundreds more. All of which are small, manageable, straightforward, and relatively low cost. If you have a program of implementing changes like this every year as time and budgets allow, do you really think your target market will turn up its nose at your kick-ass ski area b/c you're not entirely energy self-sufficient? That's crazy talk. You'll still stand out and be considered on the cutting edge from a skiing and environmental perspective b/c the standards against which you're competing are so low (as you yourself have so passionately argued). Once you are successful and show that you have staying power - to the community, regulators, investors and customers - then you can think about broadening your aspirations in the manner you are suggesting. That will also give you more time to educate yourself and your team on the relevant issues (permitting, tax incentives, returns), study what your consumption actually looks like when operating, definitively determine whether the local utility would buy your excess power (and at what price) and design a solution that best fits your needs and goals. If you try to build it in up front, you'll be flying blind on those fronts.
Again, don't let the perfect become the enemy of the really freaking good (the "really freaking good" being the ski area you propose).
And finally, it's worth reiterating past advice about any representations you make to your investors. The ski business has a prime season lasting 3-4 months, has tiny margins and is subject to the whims of weather patterns and the economy. It's not a recipe for making money on an operating basis. You should be VERY clear to your prospective shareholders up front that this is more of a labor of love than any sort of investment that will generate returns/dividends. It will be much closer to the MRG, or Packers or Celtics models of shareholder ownership than to Google. People should understand that they are investing b/c they believe in what you're trying to accomplish rather than the MRA being a part of some investment portfolio. To suggest otherwise is not only irresponsible, it will harm your credibility with anyone who is intelligent enough to have accumulated the cash to invest in the first place. There's only so many trustafarians out there.
I wish you the best of luck.