The Robertson Business Case: Start small and build

How investments by Yellowknifers could turn the headframe into a local attraction

“The worst thing that happened to Con Mine was that pre-feasibility study that came out a while back,” said the third person I raised this issue with. So what was wrong with that 2009 study? Every single idea cost money, a lot of money, from expensive greenhouses ($20 million), to climbing walls ($3 million), to a luxury hotel ($100 million), or an indoor viewing platform ($20 million).

Few people want to see the headframe go, but following unpopular planned government expenditures like the previous Con Mine heating plan, and the current development happening on Range Street, willingness to see public funds spent turning an old headframe into the “Ice Town Theme Park” is at a low. If less than 50 per cent of the population can be convinced that public financing for strategic land acquisition is a good idea, it’s understandable any combination of “100 million dollars,” “government funding” and “luxury hotel” will be met with eye-rolling.

The solution? Don’t spend the money. Even in our wildest dreams, these were never feasible options. The GNWT only invests $1-2 million annually in all of the territorial parks, so let’s not fool ourselves by throwing around huge dollar amounts. However, we do live in a town starved for substantial tourist attractions. Have you ever had a friend or relative visiting town more than two days? You come out into the living room on day three and feel this pang of guilt because there they are reading a book or watching TV. I often say “Yellowknife is a great place to live, but not great to visit.” So, what to do with the headframe?

Start By Just Getting People Onto The Damned Roof

Myself and the other partners in CloudWorks have always been interested in property development and entrepreneurial business ideas in the North. We thought it might be interesting to write a business plan for the headframe based around the lowest-risk option, charging people to travel to the top of it, and put it in the public domain. It’s available on the CloudWorks website at cloudworks.ws, along with a form allowing feedback to help us make the plan as comprehensive as possible. Here, I’ll try to summarize the plan in four simple steps and fewer than four thousand words:

1) The Abort Button

In discussions with insiders, we discovered that site owner Newmont Mining Corp has already budgeted a large sum to demolish our beloved tower. Why do they want to do this? Demolishing the tower will remove the most obvious remaining piece of the mine, allowing Newmont to wrap up their operations here, and sign off on decades of clean-up operations free from liability. The money, rumoured to be over half a million, is one of their bigger ticket expenses and to Newmont, this money is a sunk cost.

How can we change the situation so we control the headframe’s fate, with no additional cost, and Newmont being free from liability? We ask Newmont to put the money into a trust, only to be spent if demolition has to be carried out, in return for governmental agencies signing off on documents releasing the company from all liability related to the headframe. Newmont gets good PR for allowing a heritage item a chance to live, we get to take ownership of the headframe and can choose to demolish it as planned, if a venture doesn’t work.

2) Raise Private Funds

Word on the street is the City is funding a structural engineer’s report on the tower, which would answer a lot of questions about the viability of the project. I’ve heard everything from the shaft being as solid as the day it was built through to it being damaged beyond repair. We need to know what we’re getting into as this entire plan hinges on spending the bare minimum required to make the headframe accessible to the general public.

If it’s going to cost $5 million just to keep the shaft standing, this isn’t going to work. On the other hand, if we just need to add railings and paint the siding within the next five years, that’s a totally different story.

Provided the City, Government agencies and Newmont are onboard, and the budget is viable, we could do this all with private funds. We think that the best business structure would be a limited liability company with 50 local shareholders executing a business plan similar to the one on the CloudWorks website. As a startup venture this type of business is high risk compared to investing in the stock market, but to balance this equation, with local shareholders, it would also be a public good. We see this as a way that everyone from mining heritage enthusiasts to long term Yellowknifers could be a part of saving a local landmark for a few thousand dollars. The sweetener is, if it works, it should provide them with a nice return, as well.

3) First Year’s Business

For the first year, our market research has shown 94 per cent of Yellowknifers are interested in going up the tower, even if they don’t have a visitor from out of town. We will rely on this novelty factor for income at first. In addition to this, the name of the game is events; everything that costs nothing, from paper dart-making competitions to event rentals. The site should be open for limited hours per day so only two part-time staff are required. Roughly 70,000 people visit the Northwest Territories in a year and nearly 20,000 people live here in Yellowknife. If we can get even 20 per cent of these people to go up the tower for $10, that’s $180,000.

4) Beyond A Tower

The thing the original pre-feasibility report got right is the tower needs to be more than a tower at some point. In a city of 20,000, you can’t expect a tower attraction to pay for its own maintenance over the long-term. You also can’t expect Yellowknifers to want to keep paying $10 to see the view. For that reason, over the long term, we would reduce the rate for locals furnishing an NWT Health Card or Drivers Licence, when they bring their out-of-town visitors along. We would also spend the first year of operation looking for ways to augment the product. Funds and grants for placards and heritage information going up the tower seem the most obvious possibility, but we would be open to any suggestions of simple methods for increasing usage and revenues.

One possibility could be an indoor climbing wall that, if built, would be the tallest indoor climbing wall in the world and twice the height of its nearest competitor. This seems like the most cost-effective proposal in the pre-feasibility study, however, it would cost nothing close to the $3 million estimated and would begin with one simple route. Much like the plan in general, we will phase in the climbing wall as we can afford it, so the financial liability is always manageable. Also, contrary to the report, climbing from top to bottom is possible using existing climbing practices and techniques.

There are also plenty of other low-risk options to augment the product offering. Why not add a little stall selling local Con-Mine inspired gifts? What about hot chocolate at the top or a cold lemonade on a hot day? What about plugins and rental space for food truck vendors? Hey, if it’s going strong after a few years, maybe a restaurant makes sense, but for now we could just have a BBQ for rent at the top.

In Summary

Today, Cameron Falls is the top-rated Yellowknife attraction on TripAdvisor, even though it is a path into the woods to look at a pretty plain waterfall. Yellowknife doesn’t necessarily need to build a revolving restaurant with public funds to keep our icon standing. The attraction is already there, visible from everywhere in town; we just need to make use of it.

CloudWorks is an Adventure Capital startup in Yellowknife that funds creative ideas. In 2013, it raised more than half a million dollars for ventures using its crowdsourcing investment platform. You can view their entire Robertson Headframe business plan and help their market research to strengthen the plan at cloudworks.ws/headframe.

For more real estate stories, the city’s best rental board and property listings, visit Property North

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