There have been broken promises, fizzled plans, foreclosures and a sheriff’s auction.
The past 30 years have not been kind to Telemark Lodge in Cable. But what is perhaps the state’s best-known resort property appears to be on the cusp of a major renovation and expansion that could lead to its reopening in time for the 2019 American Birkebeiner cross-country ski races.
HK Hospitality Management, a Florida company with years of experience in hospitality management and hotel ownership, has signed an agreement to buy the 1,000-acre Telemark property, including its 215-room lodge, cross-country ski trails and a downhill ski hill. HK expects to close on the deal in early January and plans to spend $47 million to bring the property up to current standards, including removing the existing rooms at the lodge and replacing them with 250 modern rooms. The lobby and its iconic 55-foot tall fireplace, built from 155 tons of local stone, would be preserved.
The announcement comes after nearly four years of research, study and negotiations by HK, which plans to not only make massive capital improvements to the resort but create a year-round destination. HK officials say the amenities will include downhill and cross-country skiing, golf packages, concerts, food and wine events, film festivals, destination weddings, a corporate training and conference center and banquet facility. The company also plans to buy an adjacent 500 acres to add golf courses and lake access to the now land-locked property in southern Bayfield County.
Jim Kelley, one of two managing partners with HK, believes his company’s plans will be the right fit for the isolated resort that is three hours from the Twin Cities and about a five-hour drive from Madison. The start of the Birkebeiner races, which can draw 10,000 skiers and 20,000 spectators, is on property adjacent to the resort and is held in late February.
“We have the management skills, we have the funding and we have the marketing skills to develop it into what it needs to be, a year-round resort,” Kelley said from his office in Florida. “It has never marketed itself well as a year-round resort. You can’t live off of the winter season. We’ll have year-round business.”
for the region
The project could create 150 to 200 construction jobs and 150 year-round positions at the resort, Kelley said. Once the resort reopens, officials estimate that it could increase tourism spending by $25 million a year in Bayfield County. In 2016, tourism spending in the county was estimated at about $42 million, according to a study commissioned by the state Department of Tourism.
“This would be a tremendous economic impact for Bayfield County and all of northwestern Wisconsin,” said Scottie Sandstrom, executive director of the Bayfield County Economic Development Corp., who was first contacted by HK in February 2014. “This is a big thing for us.”
Kelley and his partner in HK, Steve Hedberg, who lives in Minneapolis and has a vacation home in the Hayward area, each have more than 30 years of experience in hotel management and marketing.
Terms of the Telemark purchase have not been disclosed, but Kelley said deconstruction of the two wings of the lodge would begin immediately after the closing and construction completed in January or February of 2019.
HK’s project could also get taxpayer assistance, in part to extend water and sewer lines to the resort, but it would require action by the state Legislature and Gov. Scott Walker. Government and tourism officials from the Cable area are expected to be in Madison on Thursday for an Assembly hearing at the state Capitol for a bill that would allow the town of Cable to create a tax incremental financing district, a provision typically only afforded cities and villages. Kelley said his company plans to ask for TIF funding but said a final number has not been determined.
Art Hancock, chairman for the town of Cable, said he is in favor of TIF for his town and is encouraged about HK’s plans for the Telemark property, despite past failed plans by other developers. However, he does not favor providing money upfront to HK. Instead, he prefers a pay-as-you-go model that releases funds incrementally as the project is developed — a method, he says, that would better protect taxpayers.
“We can’t afford to take a hit. We will reduce our risk as much as possible,” said Hancock, who was elected in April. “I want it to work, but I’m going to be cautious. We’ve been down this road many times. Potential developers have been in here with huge promises, and then it hasn’t happened and that’s been emotionally taxing on our community.”
Resort had years
The development of the Telemark property goes back to the 1940s, when Tony Wise and H.B. Hewitt returned from World War II and used a $15,000 GI loan to buy a hill and create a ski resort that opened in December 1947. A chair lift was added in 1964 to supplement the rope tows and, over the years, more improvements would come, such as townhouses and a network of cross-country ski trails. When the $6 million lodge opened in December 1972, it included fine dining, a nightclub, indoor and outdoor swimming pools and outdoor tennis courts.
Starting in the mid-1980s, the resort has opened and closed and been sold several times. The lodge is in disrepair, has antiquated accommodations, lacks a spa and isn’t located on a lake. The ski hill has been closed for nearly 20 years, and the tennis courts are gone. The lodge has been closed since March 2013, when it was abandoned by its operating company. Clifton Louis, who has ties to S.C. Johnson and owns property on nearby Lake Owen, paid $926,000 for the property at an auction in the fall of 2013 — two years after it was sold for $2 million. Louis is now selling the property to HK.
“I’m very confident. From the get-go, they’ve been very open and honest about what they want to do,” said James Bolen, executive director of the Cable Area Chamber of Commerce. “Little by little, I think (local) people are starting to realize that this is a development group that is different from others that we’ve seen.”
A $15,000 feasibility study by Hospitality Research & Development Services in Oshkosh, paid for by Bayfield County and the town of Cable, praised HK’s proposal, particularly the addition of boutique-style rooms, lake access and the 20,000 square feet proposed for banquet and ballroom space, a corporate training center for Fortune 1,000 companies and breakout facilities.
The study also assumed that HK would ultimately have 36 holes of golf and create a 200-seat restaurant, 150-seat sports grill, 200-seat lounge in the ski chalet and a 50-seat bar in the hotel lobby. HK also plans to replace snow-making equipment and the lifts at the ski hill. But creating events that drive tourists to the resort would be key to its success.
“The re-development of Telemark Resort represents a development with no regional parallel,” authors of the study wrote. “The characteristics and operating advantages detailed here amount to an extraordinary asset that can reasonably be expected to gain recognition as one of the premier resort destinations in the Midwest, and a top-quality facility of this level in Wisconsin.”
Ben Popp, executive director of the American Birkebeiner Ski Foundation in Hayward, said the plans by HK could bring the resort back to its heydays of the 1970s and serve as a base for multiple silent sporting events at the local, national and international levels. His foundation also plans to work with the resort on redeveloping trails and making snow, while the 250-room lodge would help with housing athletes and spectators.
“Any time you’re talking about taking on a project of that size in a community that size, the impact it would have could be pretty substantial,” said Popp. “There’s cautious optimism, but these guys seem to have a lot of their I’s dotted and T’s crossed.”