Traverse City Record-Eagle

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June 11, 2010

Sugar Loaf purchase on shaky ground

Sugar Loaf owner bans would-be buyer from property pending formal offer

CEDAR — Las Vegas entrepreneur Eneliko "Sean" Smith burst onto the Leelanau County scene a few months ago with big plans and bold proclamations for down-in-the-dumps Sugar Loaf Resort.

He'd invest $10 million to buy and millions more to upgrade the once-bustling ski and golf resort near Cedar. Sugar Loaf's hotel would be open by summer, ski lifts would hum by winter.

By April, Smith identified himself as the resort's owner in his e-mail messages.

Now it's June, and Smith is back in Nevada. He's no longer allowed on Sugar Loaf property. The would-be deal is at an impasse and appears tenuous, at best.

One-time supporters have backed away from Smith. Purchase talks with Sugar Loaf owner Kate Wickstrom are little more than a war of words these days.

"I'm at the height of frustration," said Smith, who said Wickstrom's "greed" is indicative of "what's stopped this thing from moving forward in the past."

Wickstrom in turn accused Smith of trying to "bully" her.

"I'm not going to stop the progress of Sugar Loaf because we need that back. We need those jobs. I just don't want the people of Leelanau County to get hurt anymore," she said.

Negotiations disintegrated to the extent that Wickstrom won't allow Smith or anyone working for him onto the resort property, including engineers to inspect two ski lifts.

Wickstrom's attorney, Joseph Quandt, of Traverse City, said she has yet to receive a written purchase offer, and she's not willing to sign the deed over on the promise of a deal.

Smith said he offered to pay off Wickstrom's mortgage, bail her out of multiple lawsuits and write her a $20,000 check, but she instead demanded a $200,000 payment.

Quandt said Wickstrom awaits a legitimate, in-writing offer from him.

"(A deal) didn't happen because none of the people he said he had deals with did he have deals with," Quandt said. "I'm not driving the bus. I would be fine if he'd just honor the deal he said he'd make."

Wickstrom wants to "disentangle herself" from pending litigation and her debt with the mortgage holder, and be reimbursed for her expenses trying to bring together a deal with Smith, Quandt said.

"She's not asking for a windfall. When this guy has some sort of legal commitment and the money ... we will be happy to move this along," he said.

But Smith returned to Nevada and said he won't come back until Wickstrom signs off.

And Smith said the price tag for a separately owned golf course at Sugar Loaf is double what it's worth. An on-site treatment plant's owners demanded $500,000 before they'll turn on sewer services to the resort, he said.

Ed Fleis and a partner own Sugar Loaf's original golf course, and they also own a majority share in the treatment plant.

Fleis said it's not in their best interest to sell to Smith unless he gives full financial disclosure about his money sources, something he's refused to do.

"He's lost a lot of credibility with me," Fleis said. "I think it's raised questions about his financial ability to take on this project."

Fleis confirmed he wanted a $500,000 payment to restore sewer service as a re-connection fee.

So now Smith said he doesn't want the golf course and treatment plant and will settle for the resort and ski hill for $6 million.

He threatened to walk away if a deal isn't reached soon.

Leelanau County Commissioner David Shiflett once supported Smith's Sugar Loaf efforts, and introduced him to local media members and some in the business community.

He changed his mind after information about Smith's background came to light, including a criminal tax case in California.

"I suspected this was going to break down all along," said Shiflett, who added he now keeps the potential Sugar Loaf deal "at arm's length."

Quandt said others recently have expressed interest in purchasing the resort, but he refused to identify them.

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