John Colson: Something seems fishy about the Rocky Mountain Resources mess
Hit & Run
The unexpected discovery of a new subterranean cave network near Glenwood Springs, coupled with revelatory recent news stories in the Glenwood Springs Post Independent and The Colorado Sun about the financial troubles of the company behind a proposed limestone quarry expansion in the same area, which some say will destroy the newly found cave, may spell trouble for the expansion plans.
And well they should.
The company involved, Rocky Mountain Resources, has been working for some time now to expand its existing quarry, now comprising fewer than 20 acres, to some 450 acres in size.
The quarry expansion, many believe, probably would have a negative impact on two vitally important recreational businesses in the town — the Hot Springs Pool on the banks of the Colorado River, and the Glenwood Caverns Adventure Park, which includes entrances to the famed Fairy Cave and other cave formations in the rugged terrain above the Hot Springs Pool.
The expansion effort was first viewed by the U.S. Bureau of Land Management, which controls development in the subject area, as relatively routine, and seemed destined for quick approval until an assortment of community groups, municipalities from Rifle to Aspen and even Garfield County objected to the expansion.
The plan’s critics maintain that RMR, if it is allowed to expand the quarry, would be digging into limestone formations that include the newly found cave, as well as disrupting the delicate and intricate system of underground springs that provide the hot mineral water that is critical to the Hot Springs Pool’s business.
The potential impacts on the Adventure Park do not get as much attention as the underground springs, but the discovery last October of the new cave, which has been named the Witches Pantry, puts a new light on things.
Though this reportedly is the first true “cave” to be discovered since 1985, the Witches Pantry offers the tantalizing possibility that there may be many more such marvels hidden beneath the surface, which could easily add to the tourist draw that already exists in the form of the Adventure Park.
And since Glenwood Springs is a tourist town, well, it doesn’t take a genius to understand the ramifications of the discovery and possible loss of the cave as an attraction.
But what I found just as intriguing as the discovery of the new cave was the discovery that Rocky Mountain Resources is not exactly in good shape, financially speaking, at least according to stories by reporters Thomas Phippen of the Post Independent and Jason Blevins, of the Sun.
According to the stories, RMR has been losing roughly $800,000 per month, as revealed in its latest filing to the federal Securities and Exchange Commission.
In the company’s own words to the SEC, Phippen reported, “(RMR) does not have sufficient cash or other current assets, nor does it have an established and adequate source of revenues, to cover its operating costs and to allow it to continue as a going concern.”
The company reportedly lost $8.2 million in the year starting in March 2018 up until March 2019, and a total net loss of $35.4 million since the company was created in 2014. Blevins also reported that the company has not filed any financial reports to the SEC for the past nine months of 2019, “citing budget constraints and a lack of accounting personnel.”
The firm reportedly is calling on investors to come up with $10 million to $20 million in emergency cash so the company can get on with business, and is counting heavily on federal approvals of the quarry expansion as well as other industrial projects around Colorado, to turn its fortunes around.
Does that sound to you like a company that is up to the job of expanding the quarry by a factor of 20? And that question does not even touch on the likelihood that RMR will abide by environmental requirements and restriction.
It may be that RMR’s true goal, as is the case with many development proposals, is really only to get the permits to expand, then sell the whole kit and caboodle to some firm with greater financial resources.
One interesting aspect of the recent reporting is the news that the company’s CEO and founder, Chad Brownstein, was retiring from his post, though he would remain as the nonexecutive chair of the company’s board of directors.
What’s interesting, though, is the contention that Chad’s dad, Norm, heads a law firm that once employed Interior Secretary David Bernhardt, who oversees the BLM — the same agency that is now considering RMR’s expansion proposal.
Even more interesting is the fact that Bernhardt, who was confirmed in his job last April after nomination by President Donald J. Trump, was raised in the city of Rifle and first got involved in politics there as a teenager.
Finally, there is the tidbit reported by Phippen that RMR originally was created as something called Online Yearbook, “which touted a platform for schools to create and print yearbooks. The company sold no yearbooks, according to financial disclosures.”
Something smells fishy here, and I’m not referring to rainbow trout in the Colorado River.
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Editor’s note: This column has been updated to correct the spelling of David Bernhardt’s last name and he was the one cofirmed in his job last April.
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