Utah court hands Park City Mountain Resort to Vail

Utah court hands Park City Mountain Resort over to Vail after 3-year fight

By Jason Blevins
The Denver Post

A Utah District Court ruled Wednesday that Park City Mountain Resort officials failed to renew their historic lease for a majority of their ski terrain and the landowner is allowed to lease the ski area's upper terrain to a new operator.

That means Vail Resorts just won the rights to more than two-thirds of the land beneath Utah's most popular ski area. And it means that Park City Mountain Resort owner Powdr Corp. will go down in history as captaining the ski industry's most costly clerical error: a days-late filing to renew their decades-old, sweetheart lease could forever change their flagship ski area, which has seen Powdr invest more than $100 million.

Powdr Corp. argued it was an "honest mistake" when the resort operator was a couple days late filing paperwork to renew its lease for land beneath Park City Mountain Resort. It was paying landowner Talisker Corp. about $150,000 a year for the land, per the series of 20-year leases first forged in the 1970s. For comparison, Vail Resorts is paying Talisker $25 million a year plus a percentage of revenue every year to lease the adjacent 4,000-acre Canyons ski area.

http://www.denverpost.com/News/ci_25808742/Utah-court-hands-Park-City-Mountain

Are you sure this isn't really from The Onion?

I know what you mean Sponge. WTF?  They forgot to renew?

$150,000 per year for the land. Insane.  That has to be the second biggest fuckup in American history.

denverpost.com looks legit right?

Harvey wrote

I know what you mean Sponge. WTF?  They forgot to renew?

$150,000 per year for the land. Insane.  That has to be the second biggest fuckup in American history.

denverpost.com looks legit right?

I'll bite.  What's the biggest, Harv?

I was just thinking everybody must have something in their mind that was a more colossal screwup than forgetting to pay the rent on Park City.  It'd be personal to each. Like some native americans may wish they asked for more money for manhattan. Or whatever.

I guess it will go to a higher court.

I wonder if this will do such damage to Powdr that Killington is affected, financially.

Harvey wrote

I know what you mean Sponge. WTF?  They forgot to renew?

$150,000 per year for the land. Insane.  That has to be the second biggest fuckup in American history.

denverpost.com looks legit right?

Exactly ---- you don't just forget, do you??? This will be interesting.

Benny Profane wrote

I wonder if this will do such damage to Powdr that Killington is affected, financially.

Oooh. With all my schadenfreude I forgot it might impact me!

The notice to renew the lease was due on Mar 1, 2011, and the extension gave PCMR until Sat, April 30, 2011, to renew. On April 30, VP of Finance Elizabeth Paul was renewing some credit with a lender. The lender knew about the renewal of the  lease and asked to see it. Paul had no idea about the renewal. The recently departed CFO, Jennifer Botter had no clue when she was called.  Jenni Smith, President of Powdr, had no clue. John Cumming had no clue. They called their lawyer, Cary Jones, (office in LA) and he looked for the document in LA and could not find it. He flew out to Park City on Sunday to try and figure out what to do. At some point somebody thinks to call former CFO Richard DesVaux (terminated in 2008!) and he tells them to check his desk. That is where the documents were found. It was rumored that he was canned for questioning the timing of some financial reports relating to bonuses. He later testified that he also had the dates on his Outlook calendar because of the importance of the lease renewal.

PCMR back dated the renewal letter they sent to Tallisker on May 3. Then the fun started.

PCMR still owns the base area. It would be almost impossible for Vail operate the skiing without access thru the base area. PCMR has threatened to remove the lifts on the leased land. What a mess.

i don't know what the big deal is, coach z says the place sucks anyway

Well, it does, but, it's really going to suck without lifts at the bottom.

Benny Profane wrote

Well, it does, but, it's really going to suck without lifts at the bottom.

Vail resorts has already said, if they take the lifts, they'll put up some new ones. Powdr is still living in a dreamworld.  

http://www.supportpcmr.com/

"even if Vail ultimately prevails in this litigation, it cannot possibly operate a resort on the leased property. They do not own the adjacent lands and facilities that are essential for ski operations to take place. And they are not for sale."

Actually, with a connecting lift from the Canyons, they probably could operate on the leased lands on the upper mountains of PCMR.  And, without access to the upper mountains, it's actually PCMR that would lose because no one would go to PCMR if they could only ski the lower mountain.  

Marcski wrote

Benny Profane wrote

Well, it does, but, it's really going to suck without lifts at the bottom.

Vail resorts has already said, if they take the lifts, they'll put up some new ones. Powdr is still living in a dreamworld.  

http://www.supportpcmr.com/

"even if Vail ultimately prevails in this litigation, it cannot possibly operate a resort on the leased property. They do not own the adjacent lands and facilities that are essential for ski operations to take place. And they are not for sale."

Actually, with a connecting lift from the Canyons, they probably could operate on the leased lands on the upper mountains of PCMR.  And, without access to the upper mountains, it's actually PCMR that would lose because no one would go to PCMR if they could only ski the lower mountain.

It would be almost impossible to operate a 3500+ acre ski area with single lift access from the far end of The Canyons.
There is also the grooming equipment and fuel, amenities, safety, electricity, employees, etc. They will have to come to some arrangement, although right now it does not seem possible.

x10003q wrote

Marcski wrote

Benny Profane wrote

Well, it does, but, it's really going to suck without lifts at the bottom.

Vail resorts has already said, if they take the lifts, they'll put up some new ones. Powdr is still living in a dreamworld.  

http://www.supportpcmr.com/

"even if Vail ultimately prevails in this litigation, it cannot possibly operate a resort on the leased property. They do not own the adjacent lands and facilities that are essential for ski operations to take place. And they are not for sale."

Actually, with a connecting lift from the Canyons, they probably could operate on the leased lands on the upper mountains of PCMR.  And, without access to the upper mountains, it's actually PCMR that would lose because no one would go to PCMR if they could only ski the lower mountain.

It would be almost impossible to operate a 3500+ acre ski area with single lift access from the far end of The Canyons.
There is also the grooming equipment and fuel, amenities, safety, electricity, employees, etc. They will have to come to some arrangement, although right now it does not seem possible.

Yes, but if this stalemate continues, it is going to be Powdr that loses since no one will want to stay at the PCMR base and use their facilities if only the lower mountain is open.  

It will be fascinating to see how this plays.  I'd love to know the terms of the lease Vail signed with Talisker for the PCMR terrain.  Vail very well may be on the hook for $10+ million a year, plus the money they have spent fighting the legal battle for Talisker, for a piece of property they may not be able to make economically viable.  Unless they negotiated subletting rights or some kind of out into the lease in the event they can't come to terms with Powd'r, Vail's committing to a long term lease could turn out to be as financially devastating a blunder as was PCMR letting their sweetheart lease lapse.  

PCMR can't operate without the terrain, and Vail can't use the terrain without access through PCMR.  Sure, Vail says they can put an interconnect from The Canyons, but how realistic is that, really?  So it's would seem to be a big game of chicken between a couple of stubborn cocks with big egos.  But not so fast!  What we really have here is a big old Mexican standoff, with the third player being Talisker.  

Wouldn't surprise me to see Talisker come out the only winner.  Once it's established that Vail and Powd'r can't come to terms, and Vail realizes operating a resort of that size via an interconnect, with no power, grooming or facilities, is a financial folly......Talisker can step in and be so kind as to let Vail out of the lease, for a sizable termination fee of course (and don't forget how much Talisker saved by having Vail pay for the legal battle), and then squeeze Powd'r, who will have been nervously stewing for a year in all the shit they shat their pants with, for a humongous lease.  Vail will have been played for several million in legal costs and lease termination fees (loser), Powd'r, tail between legs, will operate at a seriously reduced bottom line because their lease went from $150k to $15m a year (loser), and Talisker comes out smelling like a rose with some $15m a year in additional revenue that they had to spend nothing (in the legal battle) to obtain.  Ding, ding, ding, ding, ding......winner winner chicken dinner!!!!!

Eh, whatever, I'm with Coach. Park City sucks. To bad it's got the only decent ski town in the whole SLC circus at it's base. Oh well, looks like eating and sleeping in strip mall hell in Sandy before the drive up the canyon to Alta/Snowbird.

I still worry that this will negatively affect the finances of Killington, just as it's back on it's feet a few years after bankruptcy. I really don't want to drive another hour to the Bush.

Skidds... this occurred to me too.  It doesn't seem like Vail or Powdr are really thinking this through.

Skidds wrote

stubborn cocks with big egos

This is the only thing I can think of to explain it.

Also agree with Benny. Don't screw with BIG K!

The Town lift is just outside of Powdr's property.  They just need a gondola there to replace the triple and then you have access to the mountain.  Just shorten all of the existing lifts so they are outside of Powdr's property and use the Town Gondola as an access point as well as possibly an interconnect from The Canyons.

Here's the ruling, if you are interested.

http://tiny.cc/633dgx

Too bad ORDA already bought that new lift, there might be a couple of used one on the market...

Harvey wrote

Skidds... this occurred to me too.  It doesn't seem like Vail or Powdr are really thinking this through.

Also agree with Benny. Don't screw with BIG K!

Screw big K - haven't been there in years and have no plans to go again before I die. I do agree that neither Vail or Pwdr are done "thinking this through". Pwdr screwed up twice here, once because they dropped the ball and twice because when offered a deal to stay albeit at a higher rent, they refused.

ski2moro wrote

Here's the ruling, if you are interested.

http://tiny.cc/633dgx

Thanks a lot! Interesting Sunday morning read. Lots of history there. What a massive blunder - but one I can't blame them for - heck I can hardly remember a dentist appointment 6 months out let alone a lease renewal 20 years out.

This is not over by a long shot. Park City (the town) has not wayed in yet. Don't you think they will be looking at their long term tax base from this - they won't care who operates the sucker, they just want it to be successful and to help the community. A long term battle won't help them one bit. They can make things rather ugly if it doesn't get resolved quickly.

In any event, there may be another blip down in the real estate market there if this goes on very long - possibly a good time to buy. All we need is one or two seasons where there is no ski operation and I bet a lot of condo owners will be dumping.