Keweenaw Mountain Lodge board provides profit-loss update

By Jane Nordberg

COPPER HARBOR - The Keweenaw Mountain Lodge board is projecting a net loss of $30,000 for the county-owned facility by Oct. 31.

Joel Tuoriniemi, board chair, presented a year-end report to the Keweenaw County Board of Commissioners at their meeting Wednesday at the Horizons School in Mohawk.

Although operating expenses were down overall by 10 percent in 2008 to date, Tuoriniemi said, revenue has stayed flat.

However, despite the revenue news, profit margins have tripled, he said, largely due to increased efficiency and decreasing food costs.

Food costs were 51 percent for 2007, and now account for 46 percent of Lodge expenses, he said. An effort to keep bar costs down has been successful, he said, so has an effort to keep wages more in line with profit margins.

"It hasn't been a pleasant process to try to get wages stable with the percentage of revenue, but employees are working with management and understand that is what we need to do," Tuoriniemi said.

Facility rental and banquets have accounted for a significant amount of revenue since the lodge's expansion last summer, Tuoriniemi said, however, that has had an unforeseen impact on dining room revenue.

"Every time we had a banquet or event, our dining room revenue went down," Tuoriniemi said.

Suspecting the problem was a lack of parking, he put his suspicions to the test, watching one Saturday night as potential diners came up the driveway only to turn around and go elsewhere for dinner.

"It was a revolving door, because we had a wedding or a party, there were no other parking spaces for regular diners," he said.

Adding parking behind the current motel would provide 25 additional spaces, he said, while elimination of the tennis court would add another 40 spaces.

Another big concern for the board, he said, was utility costs.

"They were up nearly 20 percent this year," Tuoriniemi said. "That's real money."

Utility costs are hovering between $50,000 and $70,000 a year.

The board is looking into alternate sources of heat, such as wood pellet stoves in the dining room or exterior wood-burning structures.

In the meantime, the board recommended closing the lodge to daily traffic from Jan. 3 to its usual annual opening the Friday before Mother's Day in May 2009.

The closure keeps the lodge in compliance with loan requirements of the U.S. Department of Agriculture Rural Development program, he said.

"They know our recommendations and are in support of this plan," he said.

Commissioners unanimously approved the plan, in addition to the request of a $95,000 loan against the lodge's $220,000 line of credit with Rural Development.

Of that, $40,000 would be used toward additional parking, while $55,000 was estimated for the cost of winter trail grooming equipment and snow removal.

With Tuoriniemi choosing not to run again for the Keweenaw County Road Commission when his term expires in December, he was thanked for his efforts on behalf of the county.

"He deserves a lot of credit for what he has done for the Mountain Lodge," said Kim Stoker, director of the Western Upper Peninsula Planning & Development Region, a funding agent working with lodge management.

Tuoriniemi, in turn, recognized the efforts of the county parks and recreation committee for putting in "countless hours" toward trail development and having the lodge's best interests at heart.

"They are diligent and intelligent people who are a pleasure to work with," he said. "I urge the board to let them do their job."

In closing, Tuoriniemi said while lodge management planned to hire an individual to market the lodge, he felt it was everyone's job to keep the facility in mind.

"It's everyone's job to sell, sell, sell the Mountain Lodge," he said. "Whether it's dinner or a banquet or a place to stay or a conference, we need to get that word out to both locals and people from out of town."

Jane Nordberg can be reached at jnordberg@mininggazette.com