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There are taxes to pay, advertising bills that are due and monthly bank notes to satisfy.
It’s a tough order when the rooms at your resort are empty, the boat docks are high and dry and the walleye are gone.
“All of our revenue is based on the lake,” said Kathy Zowin, who started Lake Delton Watersports in 1979 with her husband, Steve. “It really affects everything.”
The couple, who rent boats, personal watercraft and provide parasailing rides, estimate their revenue will be down about $800,000 this summer.
When the rains came in early June, some on the 267-acre lake were bracing for the possibility of flooding. But on the morning of June 9, a strip of land that separates the lake from the river gave way, draining the lake and, along with it, a tourist season.
Crews have begun repairing and making improvements to the dam and are scheduled to fix the 400-foot wide breach and rebuild Hwy. A beginning in September. Once those projects are completed sometime in December, according to the
state Department of Transportation, the lake will be refilled by Dell Creek, which has remained flowing through a narrow channel of the lake bed.
Small resorts hurting
At the Sandrift Resort on the lake’s northwest shore, revenue is down $70,000 for the 15-unit motel and could be down by $125,000 by the time Labor Day arrives. Next door, at the eight-unit Thunderbird Resort, revenue is down
60 percent compared with last summer.
While the major resorts such as Chula Vista, Kalahari, Wilderness, Mount Olympus and Great Wolf Lodge feature massive indoor waterparks and are year-round destinations, June, July and August are still make-or-break months for many of the businesses in the Wisconsin Dells area.
A rain-filled summer is one thing. High gas prices are another. Losing your lake for nearly all of the season is unimaginable and crippling for a small business, which defines most of the businesses that rim the man-made lake.
“The good operators will survive with equity. The ones that are highly leveraged will probably have some difficult times,” said Kevin Bernander, senior vice president of the Bank of Wisconsin Dells. “It’s a situation that happened, and we’re looking forward to getting it behind us.”
Timing is critical
For Chris and Linda Allessi, owners of the Sandrift, filling the lake before spring is critical. They want the lake refilled by January, when tourists begin booking their reservations for the summer.
“They come for the fishing, the swimming, the boating,” Linda Allessi, 53, said. “They’re lake people. They’re not waterpark people.”
The Allessis have owned resorts on the lake for almost 20 years and are in their fifth year with the Sandrift, known for its motto “where life’s a peach on the beach.” Rooms, all with full kitchens, currently rent from $79 to $169 a night. That compares with $99 to $289 a night last summer.
They opened the resort this year on May 15 to cater to fishing enthusiasts but closed on June 12 after the lake drained. The resort reopened July 1.
The Allessis had to return down payments to customers who canceled their reservations and are trying to come up with almost $7,000 for advertising needed to promote next year’s season. They also were turned down for a low interest loan from the U.S. Small Business Administration. Linda Allessi said she has a solid credit rating, owns real estate in the Milwaukee area and has never missed a mortgage payment.
“They don’t have the right personnel to handle specialized cases,” Allessi said of the SBA. “I have never been late on any loans and I have never been turned down for a loan in my life.”
However, Tom Diehl, owner of the Tommy Bartlett Water Show and a village board member, said some may be turned down for SBA loans because they have other revenue streams. But he’s encouraging business owners to reapply with the SBA if they’ve been turned down because the new loan offerings aren’t tied to other holdings and revenues.
“A normal SBA loan, they don’t give it to you unless you meet certain criteria,” said Diehl, who also is on the board of directors at the Bank of Wisconsin Dells. “This is totally different. This opens itself up with no strings attached for the businesses affected by the disaster.”
Besides slashing rates, the Sandrift, along with many other resorts on the lake, is giving vouchers and discount coupons for Wisconsin Dells-area attractions. The vouchers and coupons have been donated and one voucher includes free admission to Mount Olympus.
Wally Bochenczak, who has owned the Thunderbird resort for 17 years, has reduced rates and is giving away coupons and vouchers but dipped into his retirement fund to pay the $10,000 property tax bill that is due at the end of the month.
He’s getting new reservations, replacing some that were canceled, but most are for just one or two nights, not the weeklong stays on which he relies most summers.
Insurance dispute/b>
Bochenczak, 62, and the Allessis also are fighting to get their insurance company to pay a claim for loss of income. Both have an insurance policy designed to help cover revenue losses in the event of a fire, tornado or other disaster. Wilson Mutual of Sheboygan has told the resort owners that it was a flood that caused the interruption of their businesses, something not covered by the policies. But Bochenczak and the Allessis say their property wasn’t touched by water and should be covered by their insurance policies.
“They’re fighting it tooth and nail,” said Bochenczak, who has complained to the state insurance commissioner. “Now my attorney is going to handle it.”
Paul Richards, a spokesman for Wilson Mutual, said that while personal property wasn’t impacted, the economic losses stem from flood waters.
“The cause of the loss was flooding, which was excluded from the policy,” Richards said. “The flooding caused the breach.”
New places for revenue
For the Zowins, much of their revenue since the breach has come from removing boats from the lake bed and winterizing boats, something that is usually done in September and October. The snack bar is closed and discounts are being offered on merchandise such as anchors, life jackets and clothing.
Kathy Zowin repeats the story of the breach several times a day to tourists unaware of the breach’s impact to the business and keeps a copy of the June 10 Wisconsin State Journal handy under the counter to show customers what happened.
“On a typical summer day, this place is full,” Zowin said. “We’re kind of getting used to it.”
But the lack of water resulted in creativity and could lead to a permanent expansion of their business. The Zowins now offer weekly boat rentals on Lake Wisconsin and other area lakes and they’re offering hourly rentals on the Upper Wisconsin River.
Parasailing rides, pontoon-boat and personal-watercraft rentals are also being offered out of the Shipwreck Bay Bar & Restaurant on Castle Rock Lake near Mauston. The service was offered at the start of the Fourth of July weekend and could remain, even after water and business returns to Lake Delton.
“They pretty much rolled out the red carpet for us,” Zowin said of Jack and Flo Hall, owners of the Shipwreck. “It might be the silver lining in the big old cloud.”
HISTORY SIDEBAR
Lake Delton is the original waterpark for the Wisconsin Dells area. And, like the modern versions that dot this vacation hub, it also is man made.
The Dell Creek valley, which now contains the lake bed, was a wetland, according to Michael Goc, who wrote a book about the history of the Lake Delton area. It didn’t become a lake until the 1920s.
In the 1800s, officials considered a plan that would have built a dam across the Wisconsin River, at about the same place as the breach that occurred in June. The dam would have created an impoundment in the valley and would have been used to generate power for mills.
Those plans never occurred and in the 1920s, Chicago construction millionaire W.J. Newman purchased land around the Dell Creek valley and had an 18-foot dam constructed to hold back water from the creek. The lake was filled in 1927 and served as a centerpiece for his Dellview Hotel. He also offered boat rides and built an airstrip and a 5,000-seat stadium for rodeos.
“He was a heck of a promoter,” Goc said from his home in Adams. “He marketed the place in Chicago and used all these gimmicks to develop the resort and sell lots.”
But the development screeched to a halt because of the Depression. Newman died in 1931, but his construction manager, Ralph Hines, put together a partnership to buy the property. When World War II started, the property sat idle and Hines went to work at the Badger Army Ammunition Plant south of Baraboo.
The Dells area took off in the 1950s with the arrival of another Chicagoan, Tommy Bartlett, who started a water-ski show on the lake’s south end.
It also marked the arrival of more resorts around the lake including the Anchor Bay Resort, which was located near where the breach occurred, Goc said.
The lake was dredged in the early 1980s to improve navigation, boater and water-skier safety and for swimming.
— Barry Adams
SBA SIDEBAR
The U.S. Small Business Administration has announced that small businesses, small agricultural cooperatives and most private nonprofit organizations in Wisconsin affected by the severe storms, tornadoes and flooding in June are eligible to apply for SBA Economic Injury Disaster Loans.
Eligible businesses may apply for loans up to $2 million at a 4 percent interest rate up to 30 years if they suffered substantial economic injury from the disaster. These working-capital loans may be used to service fixed debts, payroll, accounts payable and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits and are available regardless of whether the business suffered any physical property damage, according to the SBA.
The filing deadline to return applications for physical property damage is Aug. 13. The deadline to return economic injury applications is March 13.
Representatives of affected businesses and nonprofit organizations can visit SBA Business Recovery Centers in Reedsburg (St. John Evangelical Lutheran Church, 307 6th St.); Columbus (Columbus High School, 1164 Farnham Ave.); Portage (Portage High School, 301 E. Collins St.); and Lancaster (Grant County Law Enforcement, 1000 N. Adams St.) or contact SBA’s Disaster Customer Service Center at 800-659-2955. Applications may be downloaded from www.sba.gov/services/disasterassistance.
— Barry Adams
