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Options for Great Wolf Resort's Blue Harbor Resort
 Include Possible Sale or Repositioning

$54 million 182-suite Waterpark Resort Not Performing
 as Expected Since Opening in 2004

By Judy Newman, The Wisconsin State JournalMcClatchy-Tribune Regional News

November 11, 2009 - --The Blue Harbor Resort & Conference Center in Sheboygan might go up for sale.

Kim Schaefer, chief executive officer of Blue Harbor's owner, Great Wolf Resorts, said no decision has been made, but the resort along the Lake Michigan shores "hasn't performed as we expected" since it opened in 2004.

"We love the asset," Schaefer said in an interview. But she said it was a risk to build the $54 million, 182-suite, indoor waterpark resort and conference center in a newly created tourism district.

"It's very difficult in that market being an only draw," she said.

Great Wolf took a $24 million non-cash impairment charge related to Blue Harbor during the third fiscal quarter, and it was a factor in the Madison-based indoor waterpark development company's $42.1 million net loss for the period that ended Sept. 30.

"We concluded we may now actively explore a number of alternatives for the property, including a possible disposition or potential repositioning of the property," Schaefer told a conference call with analysts last week.

It was the second impairment charge Great Wolf has taken on the Sheboygan property in three years. In 2006, Blue Harbor was listed as one of two resorts responsible for a $51 million pre-tax, non-cash write-down in value blamed on market and economic conditions.

Schaefer said Great Wolf is considering several options for Blue Harbor, but added, "We are not looking to close it."

Dee Olsen, executive director of the Sheboygan County Chamber of Commerce, said Blue Harbor has been a mainstay since it opened five years ago.

"They tend to bring in a great number of conferences and it's a great family attraction," Olsen said. "I think it's been beneficial to have a property of that caliber and nature here."

Blue Harbor is part of the South Pier District, a 42-acre former brownfield that juts into the lake. The city of Sheboygan loaned Great Wolf $12 million for project construction costs and provided about $10 million in public improvements for South Pier.

Blue Harbor is the only one of Great Wolf's 12 resort properties that does not carry the Great Wolf name.


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