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Owners attempting to sell cabins via essay contest

Posted: Friday, September 27, 2002

JUNEAU (AP) -- Brian Johnson is selling his cabin rental and youth hostel business in Haines for the asking price of $200 and 400 well chosen words.

And the words don't even have to be spelled correctly.

After twice trying to sell their business in Haines by more traditional means, Johnson and his wife Laura are now trying something completely different.

They are holding an essay contest, with the winner taking possession of the rustic property on 2.5 acres.

Contestants pay $200 each to enter the contest and then send a 400-word essay detailing how owning this business would fulfill a dream, enrich their lives or just let them ''escape the rat race.''

The Johnsons are advertising it as a turn-key business that includes a two-bedroom house, six cabins, two 10-bed cabins that are used as youth hostels and a late model van. Appliances, furniture and other items are also part of the deal.

''It's everything you need to run a business,'' said Brian.

The couple have owned the business since 1996 when they moved from Girdwood after buying the property on contract from previous owner, Lucy Harrell.

The cabins and hostels cater to vacationers who travel the Alaska Highway and to young tourists from foreign countries. They also receive business from campers who run into bad weather and vacationers who don't want to pay the cost of hotels, Johnson said.

Johnson's wife also runs a gift shop in Haines that the couple relied upon for their income. The cabins provided a place to live rent-free and a few thousand dollars in spending money, he said.

A statement of earnings published at the couple's web site said that in a five month tourist season the business earns enough to pay utilities, insurance, property tax, repairs and maintenance with between $12,000 to $16,000 leftover.

The couple has been paying an annual one-time mortgage of $14,000 to the previous owner. The next owners would not have that mortgage payment, Johnson said.

But they can expect a substantial tax bill on their winnings, estimated at between $30,000 and $40,000, Johnson said. Under the rules of the contest, 15 percent of the entry fees go toward that tax burden, Johnson said.

''It's not a free and clear deal,'' Johnson said. ''We're not going to guarantee it will cover their money.''

Johnson works in Juneau and his wife lives part of the year in Haines. They are selling the property so that she can relocate to Juneau year-round, he said.

''We are just ready to move on with our lives, our intent is not to hit the lottery on this deal,'' Johnson said. ''We are going to get some of our money back.''

The contest requires that at least 1,000 entries be received and no more than 1,500 will be accepted. Proceeds from the contest could range from between $200,000 and $300,000.

The winner gets free and clear title to the property, its business assets and a two-bedroom house, Johnson said. The owners place the value of the deal at about $150,000.

A panel of seven judges have been picked to chose the winning entry based on the message and not necessarily the sentence structure, Johnson said. ''It's not an English class by any means. We've kind of instructed them that that's not the issue, grammar and spelling,'' he said.

Holding an essay contest can be a good way to hand over a business to a seller with more ambition than money, said Janice Cox, who operates a 188-year-old country inn in Center Lovell, Maine.

Cox and her husband, Richard, won the inn in 1993 by writing a 250 word essay on why they would like to operate the business. They heard about the contest from the Donahue Show, she said.

''It's a great way for someone who can't afford to go out and buy a place like this. And there are a lot of people in the hospitality industry who are great at what they do but don't have the resources to do it,'' Cox said.

After operating their inn for 10 years, the Cox plan to hold their own essay contest to find the next owners. They plan to announce the winners sometime in November, she said.

Attorney General Bruce Botelho said the contest appears to be based on writing skills rather than a game of chance. On its face, Botelho said, it appears to be at least legal.

''If you were to pay the $200 fee and it was drawn by lottery, that would be gambling,'' Botelho said.

But he said entrants would be wise to ensure there are no liens on the property and that if there are any restrictions that they are prominently displayed.

Johnson said the only lien on the property is the mortgage and that will be paid for by the revenues from the contest. If the minimum number of essays aren't met by Jan, 31 then their money will be refunded, Johnson said.

The couple has made provisions to extend their deadline if too few entries are received, Johnson said. But ultimately, he doesn't expect to make a fortune on the deal, he said.

''We're not doing this to make a huge profit, we are doing this to get our money back and move on,'' Johnson said.

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On the Net:

Essay contest rules: www.alaskaessay.com.

The couple's property records under Fantaska Corporation and Bear Haven Subdivision: www.dnr.state.ak.us/ssd/recoff/search.cfm



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