Tuesday, August 7, 2007

Refuge in the Frontier - $ 23.8 million - BC interior working ranch

As seen in the National Post
Saturday, August 04, 2007

"" ALEXIS CREEK, B.C. -One of Canada's largest working ranches is up for sale, and folks in this dusty hamlet are guessing who might cough up the $24.8-million asking price. Best bet is a stranger, someone not from these parts. Someone with a private jet and cash to burn.

The attractions are obvious: The open range, vast forests, pristine rivers, glacier-fed lakes and crisp, starlit nights. Fishing and hunting at one's pleasure. A come-as-you-wish crack at the cowboy life. The high plains of the B.C. interior, north of Kamloops, are playgrounds for the moneyed set.

Attractive to a Saudi sheik, perhaps. An American celebrity or industrialist. A Euro-royal, romanced by silver screen images of the Old West. Or a reclusive eccentric, looking for refuge on what's left of the frontier. The locals are already familiar with these types; they are the new neighbours.

Ironically, the last person expected to buy the old Alexis Creek Ranch -- 4,000 hectares of deeded property, access to another 101,000 hectares of prime grazing land, and 1,000 head of hardy stock cows and 50 purebred Black Angus bulls -- is an honest-to-goodness cattleman: They are few and far between these days.

The current owner is Bruce Blakey, a septuagenarian marine electronics magnate from Seattle. He bought Alexis Creek 14 years ago from a German, one Richard Wittgenstein, a.k.a. HH Prince Richard Casimir Karl August Robert Konstantin of Sayn-Wittgenstein-Berleburg, and son-in-law to the King and Queen of Denmark.

Prince Richard didn't amble about the ranch that much, apparently. Mr. Blakey snapped it up in 1993 when land prices were lower, but his primary motive was the improvement of his health. He wanted to take on something physical, and got his money's worth. Mr. Blakey began travelling to the ranch from his Seattle home every second week. He built a new irrigation system to pump water from the Chilcotin River and then over 725 hectares of hay and silage, perfect homegrown fodder for the cattle. He built a five-bedroom ranch house.
The new airport is his crowning touch. It comes with a paved runway and a massive hangar that easily accommodates Mr. Blakey's Citation jet. It also boasts private quarters for his own flight crew.

Mr. Blakey is an intensely private individual who would not participate in an interview for this story. Instead, he dispatched his Vancouver-based realtor to show me around the sprawling property, about an hour's drive west of Williams Lake.

"I'm selling a first-class airport with a ranch around it," declares Irv Ridd. A good line, made only half in jest. Without the modern airfield, he notes, Alexis Creek might not attract the right kind of buyer. "Qualified people," he calls them. "Persons of great wealth."

"Alexis Creek is a turnkey operation and everything is included in the price, down to the salt and pepper in the shakers," says Mr. Ridd, as we drive up to the ranch house. "But the person who will buy this ranch will do it because of the airport. And because he wants to do something interesting with [his] money. He probably already owns commercial real estate, like a shopping centre or something. But this is different."

The ranch went on the market three weeks ago, and while some potential buyers have expressed interest and have even flown in on their own aircraft to inspect the place, closing a deal could take many more months. The present owner is determined to sell to someone committed to maintaining the cattle operation, which requires at least four full-time cowboys plus farmers and mechanics.

And there's the rub: Running a large cattle ranch in B.C. is not exactly lucrative. Mr. Ridd says the Alexis Creek herd, while relatively small for a ranch this size, does generate an annual profit. But precise figures are closely guarded; financial statements are reserved for prospective buyers, who must sign off on confidentiality agreements before they see them.
Margins have to be slim. Beef prices have long been stagnant. Meanwhile, the cost of labour and fuel keeps rising. Doug Sinclair, a Vancouver architect who owns an organic cattle ranch nearby, says that "trophy ranches" such as Alexis Creek have trouble breaking even.

"Conventional cattle ranching in Canada cannot be sustained much longer," he says. "A calf sold for $500 in 1951. How much does a calf sell for in 2007? $500. Meanwhile, everything else has gone up in price."

Why, then, do people still get into ranching?
"I'm asking myself that every day," Mr. Sinclair says .

Some ranch owners rarely even visit. About 100 kilometres south of Alexis Creek sits the historic Gang Ranch. For reasons all his own, a billionaire industrialist from Saudi Arabia quietly bought the place in the late 1980s. Reportedly, Ibrahim Muhammad Afandi has set foot on his 15,000 hectares only twice. No one paid him much attention until 2002, when a list of alleged al-Qaeda benefactors surfaced in Bosnia. Mr. Afandi's name was on the list.

Further south, near the town of Merritt, lies the more famous Douglas Lake Ranch. A massive, 514,000-acre spread, it was once owned by Bernie Ebbers, the Edmonton-born co-founder of WorldCom Inc. Mr. Ebbers was convicted of fraud for his role in the WorldCom collapse and is serving a 25-year prison sentence in Louisiana.

The ranch was sold to U.S. billionaire Stanley Kroenke in 2004 for approximately $93-million. No one has ever suggested he bought the Douglas Lake Ranch because he loves the cattle business. Mr. Kroenke is a trophy hunter. He owns a handful of professional sports franchises, including the NHL's Colorado Avalanche and the NBA's Denver Nuggets.

"The real lift for big ranch owners is the appreciation in land prices," acknowledges Mr. Ridd. "The rest, including the cowboy lifestyle, is gravy." ""

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