Defining and Conveying Portfolio Company Operations Improvements

Background
Bass Creek Advisors, Ltd.

Bass Creek Advisors takes its name from the Bass Creek drainage in the Bitterroot Mountains, approximately 25 miles south of Missoula, Montana. The headwaters of Bass Creek are up an 8 ½ mile glaciated canyon, formed in the Early Wisconsin Time (up to 75,000 years ago). At the top of the canyon is Bass Lake, a one mile long alpine lake stocked with native cutthroat trout.

Charles McKenna Rial, Principal of Bass Creek Advisors, first lived there in the 1970s. The Rial Family was able to buy the property in 2005. The property consists of 160 acres which sits kitty-corner across the Bass Creek Canyon. The property is what is known as an in-holding, surrounded on 4 sides by the Bitterroot National Forest. This in-holding results from the original land grants made to the Northern Pacific Railroad as an incentive to build the railroad out west. The railroads were given every other square mile of land on either side of the tracks for 20 miles, arguably the largest act of corporate welfare in U.S. history. Weyerhaeuser, Plum Creek and Potlatch Lumber Companies were primary beneficiaries of the land grants having been spun out of the railroads. The Bass Creek property is the 20th mile from the track from the original Northern Pacific line going through Missoula.

1 ½ miles west of the western edge of the property is the boundary of the Selway-Bitterroot Wilderness. The Wilderness Area along with the adjacent Frank Church River of No Return Wilderness and Anaconda-Pintler Wilderness comprises the largest contiguous wilderness area in the lower 48.

In 2008, Charles McKenna Rial and our oldest son Griffin began modest re-development of the property. Renovation of the original Root Cellar (now used for equipment storage), along with building a guest house on top of the old sauna foundation were first steps. Also in 2008 construction of a 28’ by 28’ foot cabin began that year which is now our Bass Creek residence. Griffin, over the 2 ½ year building phase received his practical education.

The residential area of the property sits on the north side of the canyon almost facing directly south. The cabin and outbuildings sit on the southeast-facing ridge of Little St, Joe at about 4600 feet elevation. On a very clear rain-washed morning you can see 55 miles from the porch.

Our Forestry practices focus on the approximately 45 acres of the property that are not stone cliffs or on the south side of the canyon that is relatively inaccessible. The very long-term goal is to get the predominant Ponderosa Pine Forest back to old growth-cycle management. Thinning is a primary management practice, which will allow the dominant trees remaining to garner more resources and accelerate their growth. We are also focused on invasive weed reduction and fire mitigation. The essential goal is to return the property to its native state in terms of vegetation and forestry.