Wintergreen Takes Steps to Limit Losses
SAM Magazine-Amherst, Va., Feb. 8, 2012-Wintergreen Resort is cutting expenses, collecting 2013 membership dues early, and asking its 1,800 members for a $6 million cash infusion to help the resort meet financial challenges stemming from this winter's warm weather and below-average snow, according to several news sources.
Wintergreen Partners Inc. (WPI) said in a letter to its members that it expected a $2.5 million revenue shortfall as of the end of January, and that continued weather and snow issues could add another $1.5 million in losses by season's end. A copy of the letter was obtained by the Nelson County Times.
The resort also defaulted on its $3 million line of credit with Bank of America, which terminated the line in early February. The resort is pursuing a new line of credit.
"Resort management is continuing to work closely with all its constituencies in order to most effectively deal with the challenges which the warm weather has presented to the resort," said Rob Sullivan, the resort's chief financial officer, in a prepared statement.
In late January, the resort invited property owners to a meeting on Feb. 4 to discuss the budge shortfall; about 500 showed up. At the meeting, Wintergreen officials announced the WPI board of directors had approved $1.5 million in cost-cutting initiatives and early collection of 2013 membership dues, and asked members for $6 million in investment via a private debt offering. (A similar call for cash raised $7.5 million in 2009.) The money would be used to self-finance Wintergreen's working capital needs and underwrite operating losses.
On its website, WPI encourages all property owners to become members of WPI, "to enhance and maintain the quality of life at Wintergreen for its guests and members it's the most efficient investment you can make to protect your real estate value at Wintergreen."