What will happen to Park City MR?

[Soups]

Didn't see a thread on this yet. If there already is one I'll delete...

http://www.denverpost.com/business/c...ountain-resort

Vail Resorts offers to buy Park City Mountain Resort assets days before lease lawsuit goes to trial
By Jason Blevins
The Denver Post
POSTED: 03/27/2014 06:53:10 AM MDT | UPDATED: 5 MIN. AGO


Vail Resorts this week offered to purchase Park City Mountain Resort's base-area assets. The buyout offer comes days before the resort titans meet in court to battle over a lease that could leave Vail controlling the Utah ski area.

In a five-page letter to John Cumming, the chief of Park City Mountain Resort parent Powdr Corp., Vail Resorts CEO Rob Katz offered "fair-market value for any of the assets you have that would be helpful for us in operating the resort."

While there was no discussion of price, Cumming said in a statement released Wednesday, "we won't agree to ... a Vail takeover."

"Vail's domination of the ski market in (Utah's) Summit County would be bad for our community, bad for our guests, and bad for our employees," Cumming said.

Vail has a long-term lease to operate the Canyons resort adjacent to Park City. Toronto-based Talisker Corp. owns Canyons as well as a large swath of Park City Mountain Resort land.

Vail took over the lease dispute between Talisker and Park City when it signed the lease for Canyons in March 2013. And thus began one of the more dramatic heavyweight battles in the ski industry, pitting family-owned Park City resort against the ever-expanding Vail Resorts, the largest ski area operator in North America.

The dispute revolves around whether Park City properly renewed a nearly 40-year contract in 2011 for roughly 3,700-acres — about 85 percent of the ski area — it leased from Talisker for $155,000 a year.

Park City had the option to extend the lease for another 20 years, but Talisker argues the resort did not provide proper notice of its intent to renew. Park City argues it did renew the lease and sued Talisker in early 2012.

According to Katz, Talisker offered Park City a new lease "with more expensive terms," but the resort refused the offer and filed the lawsuit.

Vail Resorts took over defense of Talisker in the lawsuit as part of its 50-year, $25-million-a-year deal to lease the 4,000-acre Canyons, and in August filed an eviction notice demanding Park City vacate the Talisker-owned land.

Then the fireworks really started.

"While there has been much emotion and drama regarding these events, what transpired is relatively simple: a landlord believed that its tenant's lease had expired and wanted higher rent," Katz wrote in his letter to Cumming. "The tenant refused to pay and sued the landlord, so the landlord found a new tenant."

Katz said that when he approached Talisker to discuss Canyons in 2012, the company indicated the Park City land was available as well.

"They indicated they were not happy with PCMR as the tenant wanted to bring in an operator like Vail Resorts," Katz wrote.

If the court sides with Park City, Katz said he would remain "very interested" in working with the resort owner. If the court rules Park City's lease expired, Katz said, "it is absolutely our intention to utilize and operate that terrain."

Cumming — the son of famed Wall Street financier Ian Cumming and the founder of outdoor apparel company Mountain Hardwear — has said Vail would struggle to operate Park City without access to the base facilities or parking lots it owns at the bottom of the ski area.

The resort owns the water rights for the area as well, which enable snowmaking. In an interview with Businessweek in February, Cumming said he could abandon the ski area and convert his sliver of ski terrain at the base of his resort into a freeskiing and snowboarding training ground to compliment his 2011 purchase of Camp Woodward, the action sports training facility with locations at its resorts at Copper Mountain and California's Boreal, and in Pennsylvania and Beijing. (Park City fielded many Olympians in Russia last month, including slopestyle gold medalists Sage Kotsenburg and freeskier Joss Christensen.)

"The Olympic halfpipe is right there; it's on our land. We have terrain features all over the place. We train skiers on our land and we'll keep doing that," he said in the Businessweek interview. "I will be horrified and appalled if they force me to do just that."

Katz, in his letter, expressed dismay that Cumming would separate his land from the ski area and refuse access to Vail Resorts-operated ski terrain. The value of that land comes from its access to skiing, Katz said.

Cumming ardently rejected Katz's arguments. In a statement, he said Vail has refused to disclose documents that reveal Talisker's plans to take over Park City.

"People should not be swayed by Rob's attempt to try the merits of this case in the press," Cumming said. "We will present our arguments to the court beginning next week."

Jason Blevins: 303-954-1374, jblevins@denverpost.com or twitter.com/jasontblevins

Read Rob Katz's letter to John Cumming here:

http://www.scribd.com/doc/214790714/...-of-Powdr-Corp



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[Bromontana]

See: Talisker worst enemy of Wasatch thread

[schindlerpiste]

I really look forward to Woodward being at the base next winter.

[stuckathuntermtn]

Affordable PCMR/Epic pass?

[hatchgreenchile]

$25 parking on Lowell Ave...

[Johnny Deep]

I can't possibly imagine what a $549 season pass would do to PCMR.

[sarcasm off]

[Skidog]

I can't possibly imagine what a $549 season pass would do to PCMR.

[sarcasm off]

Nothing since hardly anyone but touristas ski there anyway. Noone i know in the wasatch skis that place. In fact I know quite a few that live in that area yet come to Alta/Bird or Soli/Brighton to ski.

[Johnny Deep]

Nothing since hardly anyone but touristas ski there anyway. Noone i know in the wasatch skis that place. In fact I know quite a few that live in that area yet come to Alta/Bird or Soli/Brighton to ski.

True dat. I acquired a bunch of PC Passes this year. Haven't been once.

[Soups]

$25 parking on Lowell Ave...

Actually it'll be free BUT only after the new $25/day parking garage they build fills up.

[Skidog]

True dat. I acquired a bunch of PC Passes this year. Haven't been once.

I think what they should do is interconnect all the fucking Wasatch back resorts and make it tourista heaven and they will never come over to bcc/lcc.

Beater central with tremendous food and "nightlife". This way we keep most of the "backcounty" that all the whiners keep bellyaching about and the added benefit of less traffic overall in bcc/lcc.

[GPP33]

If they shut PCMR down there should be plenty of cheap lodging and lots of fun low angle avy safe BC options. Of course that's probably even more tourists for Colorado.

[jmedslc]

i expect that within 10y Vail will own both PCMR and Solitude and we will begin to see collaborations, links, even roads across the canyons. Vail got the foot in the door and with that amount of money and national influence, there will be changes.

[TBS]

Despite all the drama PCMR will still be run by Powdr, just paying way more on their land lease.

From where I sit, Vail and Powdr have a pretty firm grasp on each other's nut sack right now. Sure, Talisker owns the dirt that comprises most (but not all) of the ski area. But Powdr owns the lifts and the dirt, buildings and equipment making up the base facilities, as well as the dirt making up a portion of the permitted ski area.

I really doubt Vail wants to go nuclear here, kicking out PCMR, and putting in new lifts, new lodge, parking, shopping and all the other shit comprising the touron ski experience - and deal with all the permitting, zoning, construction time, delays, etc that goes along with it - to have two resorts in the least loved part of the Wasnatch.

[ncskier]

True dat. I acquired a bunch of PC Passes this year. Haven't been once.

Been skiing the wasatch for 26 winters straight which is quit an accomplishment considering I live on the East Coast. I can honestly say I have skied park city twice. The first time because I didn't know any better and the second time because I met someone who was staying there and they didn't know any better. It was 20 years between visits and honestly I could go another 20. It's like the killington of the West. Wife just had friends that came back from a spring break visit and proclaimed "they love it". I told the wife to scratch them off the family vacation ski list if that was a place they loved. I don't get it.

[itsnowjoke]

Been skiing the wasatch for 26 winters straight which is quit an accomplishment considering I live on the East Coast. I can honestly say I have skied park city twice. The first time because I didn't know any better and the second time because I met someone who was staying there and they didn't know any better. It was 20 years between visits and honestly I could go another 20. It's like the killington of the West. Wife just had friends that came back from a spring break visit and proclaimed "they love it". I told the wife to scratch them off the family vacation ski list if that was a place they loved. I don't get it.

Yes. I've lived here nine years and have only skied there four times or so. The surprising thing is that most locals that I know DO actually have a pass there. PCMR has an amazing terrain park and race program. Many get a pass there because that's where their kids want a pass. I find the place completely boring, laid out worse than Canyons, and only go when company wants to ski there.

Having said that, I do hope the place is Epic next year. PCMR does have some redeeming qualities, but nothing I want to kick down funds for a day pass for though.

And yes, other posters are completely correct. There's a very large amount of locals who do ski exclusively at Alta /Bird. A very large amount of tourists make the drive over as well.

[Damian Sanders]

Despite all the drama PCMR will still be run by Powdr, just paying way more on their land lease.

From where I sit, Vail and Powdr have a pretty firm grasp on each other's nut sack right now. Sure, Talisker owns the dirt that comprises most (but not all) of the ski area. But Powdr owns the lifts and the dirt, buildings and equipment making up the base facilities, as well as the dirt making up a portion of the permitted ski area.

I really doubt Vail wants to go nuclear here, kicking out PCMR, and putting in new lifts, new lodge, parking, shopping and all the other shit comprising the touron ski experience - and deal with all the permitting, zoning, construction time, delays, etc that goes along with it - to have two resorts in the least loved part of the Wasnatch.

It is my understanding that per the lease, anything built on the land is the property of the land owner - lifts, lodges, infrastructure, etc. This is pretty common in ski area leases. Can't point to a source on that right now though.

Vail's letter has made it clear that they intend to operate the terrain with or without the PCMR base area. Looking at the map, this will only require at minimum 1 lift returning from PCMR to Canyons. A couple lifts more lifts could help. I highly doubt that Vail cares about the snowmaking on that terrain, or that people will be forced to access it through the Canyons. Look at the layout of Vail, Breck and Keystone - it can take 4 lift rides to get to certain areas of the mountain. Vail has no problem laying out Canyons/PCMR just like that.

We at Killington are watching this closely because of our corporate overloards POWDR. Make no mistake, John Cumming is an epic douche. He is clearly stubborn enough to run the lower area as camp woodward when Vail takes the rest of the mountain. IMHO, this will actually happen. Soon.

[yabyum]

Make no mistake, climate change will crush the Wasatch back first.

[SKIORFORGETIT]

pcmr- how much do they spend on marketing this crap place?

[powdork]

If they shut PCMR down there should be plenty of cheap lodging and lots of fun low angle avy safe BC options..

If vail is the landlord you can forget about that.

Katz, in his letter, expressed dismay that Cumming would separate his land from the ski area and refuse access to Vail Resorts-operated ski terrain. The value of that land comes from its access to skiing, Katz said.

more specifically, the value of the land comes from paid access to skiing.

[Bromontana]

business week from a little while back.. water rights owned by PCMR. Did PC even have natural snowpack at 7,000' after January this year? Last time I sped past en route to Cannarado they didn't.


http://www.businessweek.com/articles...untains-future

[Canada1]

business week from a little while back.. water rights owned by PCMR. Did PC even have natural snowpack at 7,000' after January this year? Last time I sped past en route to Cannarado they didn't.


http://www.businessweek.com/articles...untains-future

PCMR losses a third of it's season most years without water. I don't know if Payday, or king Kong (bottom third of mountain) could exists without man made.

Snows is correct that most families in town ski PCMR. Deer valley prices themselves out of a lot of families budgets, and some families have at least one kid that snow boards. They also shorten their season on both ends. The Canyons has crap access and snow and that typically drives a shorter season by a week or two at either end..

PCMR is a perfect for the Vail model. Lots of low angle groomers and stuff that tourist eat up. Walkable Main street access to mine era store fronts. Lots of similarities to Vail and Breck. Canyons probably has the better low angle terrain, but they don't have the community access and the access of the mountain itself is set up poorly around housing. They have better lodging options than any of the others, but the resort complex has no character and no mountain town feel. It is laid out much like the full mountain. Poorly planned. Think Keystone for base accommodations and character but cluster chair lay out on the mountain.

I just wish it would all be resolved. I want to buy my family passes and go have fun skiing. If my four year old were good enough, it would be snowbird next year at this point. Unfortunately she isn't there yet, so PCMR it is. Back to training for Alaska.

[M111S]

Whilst sking UT this Feb, heard that PCMR were talking to DV about removing the boundaries between em. PCMR would rather do this than sell to VR but DV would have to allow snowboarders to sweeten the deal. How true this is and if it makes sense ?? no idea.

Liking the idea of joining all three up for tourist heaven under one pass. No need to go back there now and this wouldnt entice us to go back.

will be interesting to see how all this pans out and what other knockon effects it has on the Wasatch

[cuseo]

Now the rest of the world knows what Aspen has known for years...

VAIL SUCKS!!!

[jwolter7]

Vail was taken from George Gillette by the Apollo Group from New York. The Apollo group specializes in LBOs (leveraged buy outs)
http://en.wikipedia.org/wiki/Leveraged_buyout
As financial sponsors increase their returns by employing a very high leverage (i.e., a high ratio of debt to equity), they have an incentive to employ as much debt as possible to finance an acquisition. This has in many cases led to situations, in which companies were "overlevered", meaning that they did not generate sufficient cash flows to service their debt, which in turn led to insolvency or to debt-to-equity swaps in which the equity owners lose control over the business and the debt providers assume the equity.

Apollo's top officers have lunch everyday with the biggest bankers in the world and through those contacts they find out who is in trouble and who is asking for money the banks don't want to lend to. They then offer financing to the target (junk bonds) http://en.wikipedia.org/wiki/High-yield_debt companies they believe are well managed with highly sought after assets.
http://www.businessweek.com/stories/...eets-dr-dot-no

http://money.cnn.com/2008/05/12/news...ion=2008051412


In the case of Vail Apollo then took the company public (IPO) raising money for themselves, they then stack the board with their own people, Rob Katz. http://www.bizjournals.com/denver/st...23.html?page=2

http://www.vailresorts.com/Corp/info...directors.aspx

Then they quietly stepped back out of the view of the public by selling off their majority shares... But they sold those shares only to their own private equity partners.
http://www.deseretnews.com/article/5...ke.html?pg=all

Apollo's Leon Black is the one calling the shots on this one.
At the 2013 Vail Resorts Leadership summit Rob Katz explained how he took his new Executive Vice President & Chief Financial Officer Michael Barkin to New York to have a meeting with their top investor (the photo shown at the presentation was taken in the New York office of Apollo's Leon Black). There went there to convince their top investor of their ability to create continued growth.


If you want to have the maximum impact on the takeover of PCMR. don't refer to this as Vail taking PCMR, refer to it as Apollo Group's taking of PCMR.

Everything done by Vail Resorts is done to please their investors, many of whom would prefer to stay out of the spotlight.

The PCMR deal has been done for quit a while now, the legal experts will all tell you that. Vail will take control of PCMR. If want the proof of that then just look to find what other events may have caused Vail Resorts's stock price to raise to the levels it is today so soon after their really poor year last year?? The stock price was in the mid 40s just a short time ago.
http://investors.vailresorts.com/

The bulls seem to love Vail more and more each day.
Sentiment on MTN
http://www.marketwatch.com/investing/stock/mtn


If someone really wanted to stop this deal then I would spend a lot of time looking at how its financial division was able to create such a good profit after such a poor snow year in 2012-13. Rob Katz mention at the 2013 VR Leadership Summit that the Financial division (and in particular the VR tax people) were somehow able to pull that thorny cat out of some type of hat??

Also PCMR would not be able to not runs their lifts next year even if they lose this current battle because just about every lift in the world is not paid for with cash they are financed and somebody else will surely want that cash flow to continue with PCMR lifts and parking lot so they can get paid back...

Don't blame Colorado for VRs overly aggressive actions in attempting to gain more market share, blame New York's/Apollo's Leon Black.

http://files.shareholder.com/downloa..._10-K_Wrap.pdf

Page 11
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS

Roland A. Hernandez
Richard D. Kincaid
John T. Redmond
Hilary A. Schneider
D. Bruce Sewell
John F. Sorte
Peter A. Vaughn
Robert A. Katz
Michael Z. Barkin
Blaise T. Carrig
Fiona E. Arnold
Mark L. Schoppet
Jeffrey W. Jones

http://investors.vailresorts.com/annuals.cfm


What's next for Apollo and Credit Lyonais ?
The cover of the 2013 VR Leadership Summit guide had a photo taken from the top of Verbier Switzerland.

http://investing.businessweek.com/re...597&ticker=MTN

http://en.wikipedia.org/wiki/Crédit_Lyonnais
Recent controversy
In 2001, Denis Robert and Ernest Backes book, Revelation, showed that Crédit Lyonnais was one of the many banks to hold unpublished accounts in Clearstream, a Luxembourg-based transaction clearing company, which has been accused by the authors of being a huge international money-laundering machine.

[whipski]

Most likely it will become Vile