SANY FIGHTS SALES TAX ON TIX
Talk about being caught between a rock and a hard place. The Governor of New York State, staring at the possibility of a multi-billion-dollar deficit, has proposed 150 new fees and taxes, including a sales tax on recreation fees, such as lift tickets and lessons, that could effectively amount to eight percent. Ski Areas of New York (SANY) is fighting the proposal and enlisting its guests to do the same. SANY is arguing that the tax on lessons will increase the cost of many school programs offered by NYS resorts; these involve more than 500,000 children. And it will hamper business at the state’s 47 resorts, which contribute $1.1 billion to the economy in mostly rural areas. To help make its case, SANY is also organizing other affected sports industries, such as camping, golf, health clubs, karate schools and bowling alleys, as the new tax would discourage recreation and fitness generally. The state tourism council, of which SANY president Scott Brandi is a board member, is mobilizing as well.

SANY is also taking the fight to the streets. It launched www.stoptheskitax.com in early February to inform skiers and riders and to provide them with a simple and easy way to contact state legislators. SANY’s member resorts are linking to this site and posting information at tickets windows and in cafeterias. Some resorts have posted signs on their access roads; others have printed the website on their lift tickets. A few posted them on restroom stall doors and above urinals. Why not? If voters get pissed and raise a stink, the pols just might flush the proposal. The legislature is expected to consider the bill in April.


TAMARACK ON LIFE SUPPORT
It is possible that Credit Suisse and the court-appointed receiver running Tamarack Resort, Douglas Wilson Cos., have shut down the area by the time you read this. At press time, a late February funding deadline loomed, with no agreement in sight. Talks were described as “challenging.”

Tamarack’s options are limited. The tattered real estate market and the deepening recession make refinancing difficult, both for Credit Suisse, which claims it is owed $270 million, and potential buyers. Operations this winter have been supported by a $2 million balance left over from a $10 million fund Credit Suisse provided to prepare the resort for winter operations. One sticky wicket: operations so far have fared worse than anticipated. With little marketing heading into the season, Tamarack recorded just 27,000 visits through early February. The resort ran at a loss of $300,000 for the season at that point. Given the uncertainty of continued funding, Douglas Wilson is planning for all options, from continuing full operations to a “shutdown scenario.” In that case, the golf course could go to seed this summer, and winter facilities could be mothballed, if not simply abandoned.

More bad news: buyers who placed deposits on condominiums that are part of the unfinished Village Plaza began demanding their money back after the Dec. 31 delivery date passed. Eventually, $12 million in deposits will have to be returned. Existing homeowners can only hope that a white knight will purchase the resort, continue operations, and complete the village.


Beginners Were Everywhere in January
Let’s call the inaugural Learn a Snow Sport (LASS) Month a success: it turned out 30,000 or more new skiers and snowboarders at more than 200 resorts in 23 states. In Michigan, 6,000 newbies showed up. In Utah, 2,000--including 700 at Brian Head alone. Both New York and New Mexico recorded at least 1,000 newcomers, and Vermont added 850. Forty percent of the areas claimed that the program increased visits for the month. Not bad for an effort run on a shoestring with next to no staff.

The effort succeeded in part because it drew strong support from state associations, who pushed it out to their members, and from most major ski and snowboard publications, which ran free ads urging existing snowsliders to introduce their friends to the sports. Local TV, radio and print media provided strong local exposure. In six states, the governor declared January “Learn a Snow Sport Month.” And it all worked.

Ski Utah’s Raelene Davis, who is the driving force behind LASS, is already planning for a bigger push next year. “I’d love to see the resorts really pick this up and run with it, come up with really cool things,” she told SAM. She is working with the advertising program at Brigham Young University to produce a series of PSAs, and hopes to get U.S. ski and snowboard teamers to star in them. The NSAA Conference in May will be a good place to find out more about next year’s initiatives.


Evil Spirit?
The city of Duluth, as part of its overall bid to gain a share of the $787 billion federal stimulus bill passed in February, included a $6 million request for new snowmaking pumps and water supply system for city-owned Spirit Mountain. That set off a howl of protest from privately-held areas within three or four hours of Duluth. The areas claimed unfair competition and sought to block this use of the stimulus funds. Media reports were generally unfavorable; one termed it one of the worst possible uses of the federal money.

The situation is not so black and white, though. The Spirit project was included in the city’s bid because it was shovel-ready, and because it would ease water issues in other parts of Duluth and allow additional economic development by uncoupling Spirit’s snowmaking operation from the city’s water supply--all of which was part of the area’s master plan, which was approved last summer. As such, the project appeared to meet the key requirements of the stimulus bill. Coincidently, it would also double Spirit’s snowmaking capacity.

Will Spirit get this windfall? That remains to be seen. Spirit will be competing with lots of other projects in the region. Despite the initial criticism, the city has encouraged the resort to apply for the money. It is an infrastructure project, after all, and could spur economic expansion in Duluth proper.


Fur Flies at Yellowstone Club
The Yellowstone Club saga grows weirder by the day. With Credit Suisse tussling with distressed-property investor CrossHarbor Capital Partners for ownership, founder and former owner Tim Blixseth has also announced his intention to buy the Club back, charging that his wife and her lawyers intentionally drove it into bankruptcy to buy it on the cheap.

This comes after a creditors committee sued Credit Suisse for allowing the Blixseths (primarily Tim) to, they allege, fraudulently abscond with $200 million or so of a $375 million loan that put the Club in hock in the first place. The suit does not name the Blixseths, oddly enough; that could be because, as Blixseth claims, the terms of the loan allowed him and his ex-wife to pay themselves a $209 million dividend.

To win support for its $175 million bid to purchase the area (hmm, that’s the amount of the Credit Suisse loan, minus the $200 million the Blixseths took out for themselves) CrossHarbor proposes to pay unsecured trade creditors in full, at a cost of $7.5 million. It would value the Credit Suisse loan at about $70 million (the bank and its partners could recover more through a so-called liquidating trust), and invest $75 million into the Club.

It’s very unusual, of course, for unsecured creditors to get paid while secured creditors do not. But Yellowstone’s situation is nothing if not unusual. And most of those involved agree (this may be the only point they agree on) that the goodwill of employees, vendors, contractors and the community at large is critical to the long-term success of the club.

For his part, Blixseth claims that he will fight back in court to protect his name and reputation and to prevent what he calls the “theft” of the Club at a fraction of its value. Credit Suisse has much the same motive; it claims that the global real estate collapse and divorce of the Blixseths has created a situation that CrossHarbor could exploit.

There’s some basis for that claim, at least on the surface. CrossHarbor principal Sam Byrne, a member of the club who owns several properties there, tried to purchase the Club a year ago for $400 million. His current offer is less than half that amount.

Ah, but the Club and CrossHarbor say that Credit Suisse’s tactics have poisoned the atmosphere and discouraged other bidders. To protect itself, Credit Suisse can make a “credit bid” for the amount it is owed, but it would still need working capital. And that, for an overextended bank, is tough to find.

A final settlement isn’t expected before May at the earliest.