CUED
Center
for Urban Economic Development
University of Illinois at Chicago
Grand Portage Lodge Project Critique
Project Number: 157
Report Date: August 1981
Author(s): William Markle
We have conducted a study of the various factors related to the commercial-resort facility, Grand Portage Lodge, located in Grand Portage Minnesota. We have included in the accompanying report estimates of future income and expenses at various time periods of operation. This study was prepared based on a visit to Grand Portage Lodge, interviews with Radisson Management Company and certain State of Minnesota officials in August 1981. This report is divided into several sections including analyses of information provided in two audit reports and comments from hotel management, a market study, training efforts of management practices and Indian tribe cooperation. Other sections of this report are an assessment of the current and future market of Grand Portage Lodge, determination of adequate working capital and suggestions of possible sources, and discussion of means of implementing the recommendations.
Our conclusions are summarized as follows:
1. The physical plant at the Grand Portage Lodge is quite satisfactory. The services
in all departments while not superior are, in this consultant's opinion, very
acceptable. To this we might add that we consider the food itself excellent. The
scenery and other amenities such as ski trails and museum are added attractions.
The accounting system and bookkeeping system are in excellent condition.
2. In addition to the present existing sales efforts we feel emphasis should be
put on the mid-week ski package, fishing program, and personal sales calls in
the Twin Cities area and Duluth.
3. The section of this report concerning
converting to wood chip burning in place of oil burning is perhaps the most economically
important. To emphasize this, even if the mid-week ski package and the fishing
programs are not successful, the savings in dollars by this energy conservation
can more than offset these failures. The importance of a management trainee to
back-up the manager is primary to the future of the inn. Keeping in mind the limited
hotel managerial experience of the present manager, we would advise a management
consulting firm be engaged on a very limited basis for a period of one year, as
so advised in this report. The funds for this management trainee could either
come from the tribe or from the operations of the hotel, if not from a government
source. Funds for the energy conservation program might very well have to come
from a grant from a government agency or at the very minimum a low percentage
of interest loan from a government agency, as the cost and availability of money
today from private sources is undesirable to say the least. There should be a
re-scheduling of principal and interest payments to the EDA and BIA with a possible
moratorium for an extended period of time.
4. If the EDA were to insist
upon immediate prompt payment of both principal and interest it would certainly
be the demise of this project. It is felt that if given enough time the project
will be able to stand on its own, particularly if the energy conservation program
is somehow accomplished. If the property should close because of being unable
to pay its debt service to EDA, only certain minimum financial recoups would be
possible as the lodge could be of little use for other than what it is.
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