Vail Buys Heavenly; Triple Peaks Sues ASC
At presstime, Vail was closing the Heavenly deal, which is reported to be in the neighborhood of $102 million, but might fall to between $96 and $99 million because of cash adjustments. The purchase price is about 6.2 times cash flow—Vail’s current market evaluation is about 8.2 times cash flow.
Vail plans on investing $40 million over five years to improve the resort, with $25 million in new and upgraded lifts and on-mountain facilities and $3 million annually in increased maintenance. No personnel decisions had been made at presstime.
Steamboat Deal Cancelled
On the same day as the Heavenly announcement, ASC alerted the potential buyers of Steamboat that the deal was off. As a result, Tim and Diane Mueller and Triple Peaks, LLC have filed suit in the United States District Court of Denver, Colo., alleging that ASC unlawfully breached its binding agreement with Triple Peaks.
The closing for Steamboat was originally scheduled to take place on March 14, but was delayed at ASC’s request until March 26. On that day, at the closing in New York, Triple Peaks was informed of the cancelled sale. While Triple Peaks stands to collect $500,000 from ASC for terminating the contract, the company claims that it does not apply in this case because ASC was in breach of the contract. At presstime, Triple Peaks was still assessing damages.
ASC Delisted
Before the sale of Heavenly, ASC’s stock was delisted by the New York Stock Exchange on March 14. The per-share price had ultimately fallen to below 20 cents from its opening price of $17 to $18 in 1997.
In addition, second quarter figures (ended January 27) showed a 22.5 percent decrease in revenues to $121.2 million. The net loss to common shareholders was $43.5 million.
After releasing the second quarter figures, ASC cited the sale of Steamboat as crucial to their ability to address some high interest loans coming due or which were already overdue. Even with the sale of Heavenly, questions remained as to how ASC will address the more than $400 million of debt.
United Park City Mines Agrees to Sell
United Park City Mines (UPCM), owner of the land on which Deer Valley and Park City sit, has agreed to sell the company for $81.3 million to Capital Growth Partners. The biggest draw for Capital, though, are two other potential developments that are included in the deal: Flagstaff Mountain Resort and Bonanza Mountain Resort, both at Deer Valley. Plans for these properties include luxury houses, condominiums, hotels and retail space. Capital’s purchase will be via stock buyout. UPCM’s 3.2 million shares have averaged $19 this past year, but sale terms will give stockholders $25 per share.
The Flagstaff proposal has been proceeding slowly through the planning and approval process. “I think, in general, the plans are on the right track and reflect the development agreement,” Planning Commissioner Chris Larson told the Park City Record. But, Larson said, details of the project, like the road layout and the size of the buildings, still must be agreed upon. Road and infrastructure construction could begin this summer, but housing construction isn’t likely until 2003 at the earliest.
WestRock Moves Ahead
WestRock developers are engaged in lease negotiations with the Idaho state lands department for 2,100 acres of WestRock’s proposed development, about 20 miles southwest of McCall in west-central Idaho. The proposed $1.2 billion resort would encompass 3,608 acres of private and state land.
Should lease negotiations with the state conclude successfully, which could happen this spring, the next step would be to secure specific conditional use permits from the county. With those in hand, construction could start this summer. Developers hope to open the resort in 2005. WestRock would be the first new major resort in the U.S. since Beaver Creek, Colo. The ski resort would include 62 runs serviced by fourteen lifts, one of which is a proposed funitel. Summer activities would include hiking, mountain biking, boating, and golf on a planned 18-hole course.
Delays for Resort Expansions
Resort expansions at Durango Mountain Resort (DMR) in Colorado and Powder Mountain in Utah have been put on hold by local opposition groups. In Durango, citizens forced the La Plata County commissioners to reconsider their approval for the resort’s 25-year plan to add nearly 1,650 residences and 400,000 square feet of retail space. This challenge effectively postpones construction, scheduled to begin this fall, to 2003.
In Utah, where developer Brent Ferrin has an option to buy Powder Mountain from the Alvin Cobabe family, local residents have challenged proposed zoning changes that would permit Ferrin to add 10 to 15 new ski lifts, plus two villages with 2,000 luxury homes, condominiums, and townhomes, three golf courses, two helipads, and a small airport. Ferrin’s option expires July 15 and he won’t exercise it unless one of two counties agrees to the zoning changes by then.
In the East, Okemo’s owners, Tim and Diane Mueller, have run into problems with their proposed development of Mount Sunapee, which they lease from the State of New Hampshire. The New Hampshire State Economic Development Commissioner put off a recommendation on whether any expansion can take place until the Muellers meet certain conditions, such as buying 100 acres for donation to the state for conservation. In addition, the commission has called for a new master plan that will meet the satisfaction of state, regional and local officials—something that could take another year to hash out.
At issue is the development of some land Okemo purchased last year. In its proposal, Okemo was asking to lease 175 acres of state land to connect the site to the ski area.
Booth Creek and Vail Post Increases
Booth Creek’s revenues rose 22.9 percent to $60.1 million for the quarter ending February 1 over the same period last year. Total EBITDA was $20.9 million compared to $13.4 million in 2001. Resort operations contributed EBITDA of $18.5 million, $5 million over 2001. However, this year’s quarter ended February 1 whereas last year’s quarter ended January 27, which contributed to the big increases. For example, between January 27 and February 1 this year, Booth Creek generated 106,000 skier visits who accounted for $4.8 million in revenues.
Total skier days at Booth Creek’s seven resorts climbed from 1,062,000 in the first quarter of 2001 to 1,202,000 visits for the 2002 period, reflecting the additional six days, as well as good conditions across many of its resorts, especially in Lake Tahoe and Washington.
Vail Resorts also saw increases in its second quarter thanks to real estate. Despite a 5.4 percent drop in skier days for the first half of fiscal 2001 (2.1 million visits at all four resorts), total revenue for the second quarter was $217.8 million compared to $189.4 million last year. Resort revenue only increased 0.6 percent to $180 million, however real estate revenue for the second quarter jumped 273.6 percent to $36.7 million.
SIA News
SnowSports Industries America announced that the organization is moving its 2003 SIA SnowSports show from the Las Vegas Convention Center, its home for more than 25 years, to the new Mandalay Bay Convention Center. The show is set for January 24 to 27, 2003. This move follows the news that the Outdoor Retailer and SIA shows, which had been discussing a possible co-location or merger, will not combine forces in 2003. OR officials determined that the change could not be made in time for the 2003 show(s).
SIA’s next-to-last retail audit of the year showed that retail sales, like skier visits, rebounded from the post-9/11 uncertainty. Sales nationwide were off 5-8 percent, from $2.1 billion to $1.9 billion. The bright spots: specialty stores posted year-to-year gains for X-C gear (5.3 percent) and snowboard equipment (7.2 percent). Sign of the times: only 790 pairs of traditional straight skis were sold, compared to 65,000 snow decks and snow skates.
Bachelor Law Suit
The Pape Group has filed a federal lawsuit claiming that Powdr Corp. paid just $4.5 million for Mt. Bachelor stock worth at least $21.8 million. According to the Bend Register-Guard, the March 22 lawsuit caps more than a year of hostility between Pape and Powdr for control of Mt. Bachelor, Oregon’s premier ski resort, located about 30 miles west of Bend.
Helmet Rules at Aspen
On March 23, the Aspen Skiing Company put into effect a new rule requiring all ski school kids six and under to wear helmets for the rest of the season. Aspen has since said the requirement will be expanded to cover all ski schoolers age 12 and younger for next season.
Helmets were made available at the ski and snowboard school’s preschool registration area and at shops throughout the resort. At presstime, only Vail Resorts said it was planning a similar requirement for next season.
For more on the story, see page 48.
Report Released on Kaprun Disaster
A team of experts from five alpine nations concluded that the circumstances which led to the Kaprun fire could not be foreseen. The funicular fire in the Austrian tunnel took the lives of 155 people in November, 2000.
While the panel recommended several fire prevention measures, the experts did not recommend giving over control of the doors to the passengers, concluding that more accidents were likely to occur if they had the control. The issue is important because many of the deaths inside the tunnel were blamed on the fact that passengers could not escape the burning funicular because the doors would not open. The incident, however, marks the first fire on a funicular.
Ultimately, the experts agreed that it would be up to state regulatory agencies to rule on the issue.
Cuchara in Trouble…Again
The small southern Colorado ski area called Cuchara has become the source of a $43 million lawsuit. A Texas entrepreneur, Bruner, filed the suit after ski area owner, John Lau, backed out of a deal to sell the area to Bruner. Lau bought Cuchara for $2.9 million in 1997 and invested $1 million for general improvements. However, in July 2000, Lau closed the operation and sought out buyers. Two months ago, Lau signed a contract to sell the area to Bruner, who would have been the area’s eighth owner.
Since the signing, Bruner alleges that Lau has borrowed $2 million against the ski area, which would be a violation of their contract. It would also be a violation of the Forest Service permit, which is already in jeopardy of being pulled because Lau broke a Forest Service obligation requiring him to operate the area for at least 90 days this past season.
Even if the Forest Service does not pull the permit, it is set to expire at the end of 2002. Bruner would have to reapply separately if he wins his suit to buy Cuchara.
Ski Smithers to Expand
The Canadian Rocky Holdings Company, owners of Ski Smithers in British Columbia, have entered into an agreement with Hudson Bay Mountain Adventures for the future development of the ski area operation, including new ski runs, additional lodging and new amenities. The first phase, a ski operations assessment and study being done by Ecosign, is underway and when completed, the companies will present a master plan to the Provincial Government.
Winter Park Sees Turnaround
Winter Park, Colo., will post a $1 million profit this year in contrast to the $2.3 million loss from the 2000-2001 season. Management at the area credits better business practices and more snow for the increase.
Winter Park is also starting to see the effects of the Intrawest agreement, a 50-year partnership between the Canadian company and the town of Denver to run the area. Real estate firms have reported record sales in the area as people try to buy in before Intrawest starts its improvements to the resort town.
Bolton Valley Lays Off Most of its Staff
According to published reports, Bolton Valley ski area in Vermont, laid off all but eight of its staff members at the close of the season. The move comes after the ski area’s owners filed for Chapter 11 bankruptcy protection in December 2001.
The owners, Ned Hamilton and John Biondolillo, bought the beleaguered ski area out of bankruptcy in 1998 for $2.2 million.
Ski NH Forms Alliance
Ski New Hampshire has joined with the United Kingdom’s Leisure Estates International (LEI) to launch a new tour venture. The new White Mountains division of LEI will provide complete vacation booking services and will print a 40-page brochure dedicated to New Hampshire skiing. LEI will promote the nine-area lift pass, New Hampshire’s proximity to Boston and the ease of travel to the Northeastern U.S.
Obituary
Salt Lake Organizing Committee press operations director Bruce Dworshak died in Los Angeles on April 9, 2002 at age 48. Dworshak started working in major-event media in 1984 with the Los Angeles Olympic Organizing Committee. From there, he has worked with the Pan American Games, the Goodwill Games and FIFA World Cup.
People
Kellee Katagi has been promoted to senior editor at Ski magazine. Katagi oversees several departments, including Healthy Skier, Ski Fit, In Gear and the Pacific region, in addition to her day-to-day editing tasks.
The U.S. Ski and Snowboard Association (USSA) has named U.S. ski team coach Jesse Hunt to the job of alpine director. Also at USSA, Ted Morris has been promoted to vice president of sales and marketing.
Harbor Resorts has announced that Stephen Fina goes from being vice president of planning and development to vice president of resort real estate.
Gina Kroft, director of public relations for Crested Butte Mountain Resort, Colo., was the winner of this year’s Bob Gillen Memorial Award. The award is sponsored by Colorado Ski Country USA and the North American Snowsports Journalists Association and honors a person for their communications expertise.
In New Hampshire, Mount Washington Hotel & Resort has made Michael Palombo executive chef of all culinary operations, including the food service at Bretton Woods ski area… Ragged Mountain Resort has appointed John Baker ski school director.
At Mount Snow, Vt., Andrew Rubenstein has become director of public relations. Also in Vermont, Okemo’s director of the Cutting Edge Learning Center, Marty Harrison, retired at the end of this season.
Supplier Personnel
CWA Constructions SA/Corp., which was sold to Doppelmayr by the Frech family, have announced the final changing of the guard. André Frech terminated his activities at CWA last September and Heinz Frech retired as president of CWA on January 1, 2002.
Felix Rhyner will become the new CEO of the company and Angelo Caneri becomes vice president. Rico Wehrli stays on as director of sales and marketing and Walter Zimmerli as director of purchasing.
Neal Trask announced his retirement from Trask Decrow Machinery, effective as of September 2001.
Supplier News
After 14 years of joint marketing and sales efforts, Snow Machines, Inc. (SMI) and York Snow will part ways, citing a change in business strategy and changing markets.
Elan USA will be an official supplier to the U.S. alpine ski team as of the end of this competition season.
Toyota Canada has signed on as a sponsor to the Canadian Ski Patrol System to the tune of $50,000 and five four-wheel drive trucks. In exchange, all patrollers will wear a Toyota logo on their jackets.
InTouch Technology is moving to larger premises to accommodate growth. The new address is Intouch Technology USA, Inc., 1604 State Street, Santa Barbara, CA 93101. Phone is (805) 682-9999 and fax is (805) 564-1124.
Alpina Snowmobile distribution will be taken over from Geise Engineering by Eric Anderson at ABR Trails Cross Country Skiing. Anderson can be reached at East 5299 West Pioneer Road, Ironwood, MI 49938 or by phone at (906) 932-3502.
Kaser Corporation of Italy, manufacturers of conveyor lifts for beginners for the past five years, announces the opening of its North American division in New Hampshire to introduce a new technology. The head of the office is Bruno Beinder, who can be reached at (603) 863-6222 or by e-mail at [email protected].
