END OF AN ERA

WASILLA — For the first time in nearly two decades, John Klapperich isn’t beating the streets of the Valley as the passionate, energized owner of KMBQ FM 99.7 radio.

He’s still as passionate and energetic as ever and — technically — still owner of Spirit of Alaska Broadcasting Inc., but is left on the outside looking in as a court-appointed receiver has taken over Wasilla’s locally owned radio station. In addition to KMBQ, SABI also owns KBYR AM 700 in Anchorage and AM 1430 here. In the end, it’s that expansion over the past five years that eventually led to the corporation’s financial troubles, Klapperich said.

A $2.1 million loan from California-based Wells Fargo Foothill Inc. issued April 12, 2005, included money to pay off KMBQ’s debt and $700,000 to purchase the Anchorage AM station, Klapperich said. It was an implied agreement about the value of a new AM station in Wasilla, 1430, that was the final straw. By that time, the original note held by Wells Fargo had been sold to Gladstone Capital Corp.

“With another $200,000 we could get that last AM station on the dial,” he said. “But, we had to be on the air by December 2008. … I was told that if you get it on the air, you’ve got a big asset and we’ll borrow you some money. Now, that wasn’t in writing, it was implied.”

After months of work that included a public tiff with neighboring landowners surrounding the land where he needed to put his broadcast tower, “We got it on the air with eight minutes to spare,” Klapperich said.

“So now I go back to the bank and they say, ‘You know, the financial picture has changed. We’re not really loaning money,’” he said. “That’s one of the blocks that caused me the challenge. It took all the liquidity out of my company and anything else to put that third station on the air.”

Following that, three large advertisers that owed the station money went bankrupt, he said.

Not being able to infuse the corporation with capital like he thought he could pinched him beyond incoming revenues, Klapperich said.

“I had a little reserved, not as much as I should, but a little — plus everything I could ask my kids and my neighbors for to get it up,” he said. “Now, they say that station is worth about a half a million bucks, and I only wanted a couple hundred thousand.”

Throughout July, Klapperich and Gladstone Capital Corp. wrangled in U.S. District Court, but in the end, he said the judge did all he could to keep the local face of Valley radio at the helm.

Although issues are still being worked out, as of 4 p.m. Friday, Klapperich learned all the locks at the radio station had been changed and messages Klapperich said he left for the court-appointed receiver, Bob Woodward, an East Coast-based consultant, hadn’t been returned by Monday afternoon.

Klapperich admits he’s still stunned losing a business he helped found 25 years ago, but also said he has nothing but kind words about the situation.

“You called me, so I’m not here to ask for a pity party,” he said. “I’m not talking bad about anybody. I want every employee and that radio station to do well and succeed forever. This is not about crying in my beer because something happened to me. … I know when I sign documents to borrow money and I don’t pay it back exactly as according to (those documents), this is what can happen.”

When contacted by the Frontiersman Monday, the radio station’s operations manager, Ray Bavoitz, said it’s business as usual.

“As far as the day-to-day operations, the average person isn’t going to notice a bit of difference,” he said. “Our dedication to that has not changed, will not change. If anything, we’ll take it to the next level.”

Bavoitz referred other questions to the receiver, Woodward, who also said the station would continue operations.

“It’s going to stay local, it’s going to stay committed to the Mat-Su Valley,” Woodward said. “None of that will change at all. That is my direction and we hope to continue to serve the public in the (best) means we can in the Mat-Su Valley. … We just hope to make it better.”

The ‘K’ in KMBQ

That’s a tall promise to make, said David Johnston, president of the Greater Wasilla Chamber of Commerce. Klapperich is a past-president of the organization and is so entrenched in the Valley community that KMBQ is as much his personality as it is a business.

“I wouldn’t be the same without him,” Johnston said. “He’s a true entrepreneur of the Valley. I think it would be a loss for all of us. If it is being taken over, he’d be the first person I’d hire. He’s the spark of this community. He’s so engaging, loves the people and loves himself.”

Klapperich is often called upon to emcee events, like the recent Governor’s Family Picnic in Palmer or the Wasilla Fourth of July parade. He has a reputation of never saying “no” to a community organization or person in need, Johnston said.

“He has done so much. He’s always been there 100 percent, never fail. He always donates air time to anybody in need,” he said. “He’s one of the best there is that we’ve got. It’s a shame we couldn’t grow without destroying the things that started it all. My suggestion to John would be to recreate the wheel. He’s the master, and he’s young enough to do it. I think he’d have enough support and backing.”

It’s that community involvement that also caught the notice of the finance company, Klapperich said.

“She hands me this receivership (paperwork),” he said. “It was stunning, stunning. This is my baby. I said, ‘OK, you’re just protecting your stockholders’ assets.’ We went through all these financial statements and she said, ‘What’s this Curtis Menard Sports Center? What’s this Honor Garden? What’s this Wonderland Park?’ I said, ‘These are things that make a difference in our community.’ She said, ‘It looks like you took better care of your community than you did your balance sheet.’”

On the ground floor

Klapperich grew up on a farm in Wisconsin and first came to Alaska in 1975, settling in Fairbanks. By 1979, he had “bought a run-down lodge and fell back in love with my high school sweetheart, Joanie, and we’ll be married 26 years next month.”

Along with Joan, the couple cleaned up and ran the lodge, working long hours, he said.

“We got married and bought a lodge, a bar, a campground — the Sheep Creek Lodge, Mile 88 Parks Highway,” Klapperich said. “One’s pumping gas, one’s frying burgers, one’s cleaning the cabins, one’s pumping propane, and it was a liquor store and a bar, and it was absolutely (working) seven 20s.”

A few years of that and the Klapperiches were ready for something else, so they sold the lodge and moved to the Wasilla area.

“I was part of the chamber of commerce at that time. I was at the Mat-Su Resort and I was doing a tourism gig,” he said. “I was really thinking that tourism’s where it’s at. I was still fired up on Alaska. I was preaching tourism and I was preaching excitement in 1984. A businessman and two other people came up to me after and said, ‘Man, you’re passionate about this Valley, passionate about Alaska.’ I said, ‘I am.” Then they said, ‘We’re bringing a radio station to Wasilla. Would you like to be on our team?’”

FM 99.7 would be the city’s first radio station, and when Klapperich took the news to his wife, who had a background in radio sales back in Wisconsin, she was just as excited, he said. He signed on to be the salesman/sales manager and went to work to get the station on the air. Then, it was a tower on Shrock Road with a double-wide trailer as the office.

“It didn’t take me long to figure out these guys had a dream, but not a lot of money,” Klapperich said.

They needed another $50,000 to get on the air, so Klapperich went out and sold 100 charter sponsorships of the station at $500 each. By August 1985, KNBZ began broadcasting. It was a country music format, billed as “Country Moose-ic” and had the different call letters because it was an NBC affiliate.

About a year later, though, Sheep Creek Lodge burned. Because the people buying the property hadn’t kept up insurance payments, Klapperich was left with a piece of property without the improvements. He decided that without the income the lodge was providing from the sale, he needed to step back from the radio station to rebuild.

In the mean time, the radio station had suffered one bankruptcy and had new ownership when Klapperich returned in the early 1990s.

“I came back and immediately ran into the current owner of the radio station. His name was Gary Buell,” he said. Buell ran the business with his wife, Caroline. “They said, ‘We’ve heard about you, Mr. Klapperich. A lot about you. You need to come work for us and get back into sales and sales management.’ I said, ‘I’d like to, but I got a big dream,’ and they said, ‘Oh, our dream isn’t that big. We just want to keep it real small, two or three employees.’”

Under Klapperich, the business grew and he “basically ran it like my own” when Gary Buell was diagnosed with skin cancer. Following a battle and remission, a relapse took Buell’s life in 1999. Because his wife is from Great Britain, she couldn’t own the station.

“The FCC doesn’t allow someone who’s not a citizen to own a radio station,” Klapperich said.

That’s when he and Joan decided to buy the station outright and move to its current location along the Parks Highway.

Big dream

Those big dreams Klapperich had when he first met with Gary and Caroline Buell are still there, Klapperich said. Now without control of his company, he admits the family’s emotions have been raw lately.

“It’s so hard for my wife and I,” he said. “We drive by (the station) and we cry for one hour, then we’re happy because we can get cleansed in one respect. … As of today, it’s a very, very strange position I’m in. Am I fired? Am I hired? Technically, I still own the company.”

He knew something was up July 2, when a Gladstone representative and Woodward came out and handed him the receivership papers. That was a Friday. On Sunday, the Klapperiches emceed the Fourth of July parade in Wasilla. The next day, he had a surprise when he went into the office.

“When I came back on Monday, anything that had to do with Klapperich was in boxes,” he said. “I walked up to my office and all my personal stuff was in boxes.”

Johnston said KMBQ is an important cog in the Wasilla business community and hopes Klapperich can work out his financial troubles and keep the radio stations.

“He’s one of those rare individuals who is the business,” he said. “When I see him, I’m going to give him a big hug.”

Contact Greg Johnson at greg.johnson@frontiersman.com or 352-2296.