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Whistler Sport Legacies Society and Callaghan Country part ways

Documents reveal Society is running a $2 million shortfall
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The post-Olympic business reality for a small backcountry lodge living in the shadow of the $120 million Nordic facility in the Callaghan Valley is fast unravelling.

Ties have officially been severed, at least for this year, between Callaghan Country, a long-operating lodge with a cross-country trail system in the Callaghan Valley, and the operators of the Whistler Olympic Park - the Whistler 2010 Sports Legacies Society (WSL). The move signals an abrupt departure of the working relationship built up over years while Whistler prepared for the Games, a disappointing outcome for both parties.

Meanwhile, a Pique investigation has found that the WSL has received $5.6 million from the province in extra funding to cover an ongoing operating deficit.

"There are problems we need to solve financially," admitted Keith Bennett, WSL president and CEO. "The province has helped us out this year."

The $5.6 million in extra funding fills in an annual operating gap of $2 million for 2011 and 2012. A further $1.6 million is for capital investments next year. Whistler's Olympic legacy assets are worth $270 million, most of which was funded by the federal and provincial governments.

Bennett said his team is working hard to try and make the Olympic legacies sustainable. But he projects that it will take at least four to five years for the Whistler Olympic Park in the Callaghan and the Whistler Sliding Centre to rely solely on the 2010 Games legacy trust fund, which was set up by provincial and the federal governments to manage the multi-million dollar legacies.

"We are looking at every option we have to help manage our finances and to do more for what we were set up to do which was help develop sport... and help support high performance sport."

Brad Sills, president of Callaghan Country, takes issue with that. He said the whole idea of working together was to grow the business together under the "Ski Callaghan" brand, marketed as more than 90 kilometres of groomed trails on the other side of Whistler - roughly half the trails belonged to WOP, the other to his facility.

He was dumbfounded to learn that the society would not be working with Callaghan Country this year; the spirit of cooperation, and of growing the cross country ski business together for their mutual benefit, now a thing of the past.

"That was the implicit agreement," said Sills, "that we would prosper by working together.

"We're joined at the hip. Our trail systems inter-mingle."

The two sides failed to come to an operating agreement by early August this year, prompting a decision from WLS to go their separate ways.

"We couldn't find an arrangement that each side was comfortable with to do that," explained Bennett, who too was disappointed with the outcome. "So they will run their operation from their own property just like they've always done, with the exception of last year."

Last year the legacies society groomed and patrolled Callaghan Country's 42 kms of trails and gave the company a presence in the park. The WLS, on the other hand, kept the gate money from guests, who were allowed to use WOP trails and Callaghan Country's for over 90 kms of cross-country experience.

This year Sills was looking for a Reciprocal Use Agreement, much like he had in place with Olympic organizers VANOC for four years while the facility was being built for the 2010 Games.

Under that agreement customers could use one common ticket for both venues, but whatever business sold the ticket, kept the revenue.

That was also a different time, said Bennett.

"VANOC was not necessarily focused on the business side of operating a cross country ski area," he added.

He said that the Reciprocal Use Agreement does not make sense from a business perspective.

"There were some different forms of agreements I guess with Callaghan Country that allowed them to sell seasons passes that were good in Whistler Olympic Park," he said. "When we took over we fundamentally felt that allowing somebody else to sell your product and keep the money was not the right way to go.

"We're just not prepared to go into a situation, and I'm surprised any company would do that, where you allow someone else to sell your product and keep the revenue."

With 30,000 paid skier visits to the park last year, there is still a significant funding gap for WOP to the tune of $1.5 million.

"We have a huge operation with very big facilities but a relatively small business at this point," said Bennett.

To that end, the society is considering the potential for overnight accommodation. The area has a multi-million dollar road leading to the park, sewer lines, power and Internet. But before any of that could go forward, there would be extensive public consultation, said Bennett, including First Nations input.

"We're doing investigative work just to see if there is even a viable business case whether it even makes sense," he said.

"Before we even go down that road it has to be the right thing to do."

WSL is also looking to develop a new cross country trail called the "Madeley Highline Trail" which would start at the top of the ski jump chairlift and wind 8 kms over the Madeley Lake. It would give beginners easy access into higher alpine areas.

"We recognize that we need to develop new skiers for Whistler Olympic Park," said Bennett. "It's a big venue and there aren't really enough cross country skiers out there right now that would keep it full and keep it viable for days. So we need to develop skiers in the future and we need to try to augment the number of skiers that are out there right now."

But with accommodation potentially on the way and more trails like his own, Sills is looking at living side by side with a publicly funded partner, with seemingly deep pockets.

"If it was a private corporation I wouldn't have any gripes about that," he said. "That fact is it's a public trust. It just brings up a whole host of questions as to: appropriate use of public funds, due process, honouring past agreements, your own corporate visions, your own corporate missions. All those things all come under scrutiny at that point because you've pretty much just tossed everything aside and decided, hey, this is what we're going to do now."