Squaw Valley CEO Andy Wirth's Negative Letter About Incorporation

[The Suit]

As a privately held venture firm KSL does not have the same legal obligation to maximize profits and increase share value that a publicly traded company has. They have the option of investing for the long term and doing so in ways that benefit the community overall, which will, in the long run, make their investment more valuable. That doesn't mean they can't squeeze out maximum dollars in the short run, but they don't have to. In this day and age we assume that every business, whether public or private, will try to maximize short term profit, but it wasn't always this way and it doesn't have to be.

The pressures are different from those on a public company, but most private investment funds have a limited time horizon, too. KSL may be structured very differently, but venture capital funds typically need to see some kind of resolution of their investment in 5-7 years. I wouldn't put too much hope in KSL's potential for patience.

[The Dad]

KSL is spending the revenue it gets from passholders, who expect a certain level of service on the mountain. When KSL lays off employees and reduces open terrain and lifts and spends the money it saved on propaganda it is breaking its trust with passholders.

I assume that you approach all your purchases accordingly.

The pressures are different from those on a public company, but most private investment funds have a limited time horizon, too. KSL may be structured very differently, but venture capital funds typically need to see some kind of resolution of their investment in 5-7 years. I wouldn't put too much hope in KSL's potential for patience.

Yeah, this. And add to that the fact that even looking at the long term, if a $120k spend now saves them money and time later, due to the expected delta between the effort required to negotiate with the county and the anticipated local municipality, it's money well spent from a corporate perspective.

[FriendsofSV]

A couple IOV developments.

The comprehensive fiscal analysis was rewarded to Citygate Associates

http://www.incorporateolympicvalley....scal-analysis/

An opinion piece from a Squaw Valley resident

http://www.tahoedailytribune.com/nor...lley-community

[FriendsofSV]

SnowBrains' video interview with IOV Board Members Fred Ilfeld and Tom Day.

http://snowbrains.com/incorporate-ol...lfeld-tom-day/

[old goat]

I assume that you approach all your purchases accordingly.

I still buy a Squaw pass, but I don't have to like it when they spend the money on flashy brochures rather than on skier benefits.
Every time some big corporation goes up against the locals and people start to question the actions of the big corporation, the wise guys always try to tell us that these businessmen are smart guys and know what they are doing. Rich, smart guys screw up royally all the time. I think KSL is being short sighted--pissing off everyone in the area is not a wise idea. They would be march wiser to be making nice with IOV--I think they can actually get a better deal from IOV than from Placer County if they play it right, but at this point, if there is incorporation, there's going to be a very hostile relationship.

Squaw Valley development will have an impact well outside the limits of the valley, and the interests of those of us in North Tahoe/Truckee are likely to be better served by the County (although it might take a lawsuit to force mitigation.) For example OV residents would be happy to have water piped in from Martis Valley, but the rest of us who depend on that water will have little voice in any decisions a town of OV makes.

[FriendsofSV]

Curbed Ski provides a recap on IOV vs SOV

http://ski.curbed.com/archives/2014/...w-valley-1.php

[old goat]

IOV has been accused of political campaign violations:
http://www.tahoedailytribune.com/new...-incorporation
"Olympic Valley resident Lawrence Tomlinson filed a complaint in early May with the Fair Political Practices Commission, listing failures by IOV to file a statement of organization, file monthly campaign statements for at least five months and include disclaimers on campaign advertisements to the commission."
I am curious--has SOV complied with these rules, or are they similarly non-compliant?

[The Dad]

KSL is spending the revenue it gets from passholders, who expect a certain level of service on the mountain. When KSL lays off employees and reduces open terrain and lifts and spends the money it saved on propaganda it is breaking its trust with passholders.

I assume that you approach all your purchases accordingly.

I still buy a Squaw pass, but I don't have to like it when they spend the money on flashy brochures rather than on skier benefits.
Every time some big corporation goes up against the locals and people start to question the actions of the big corporation, the wise guys always try to tell us that these businessmen are smart guys and know what they are doing. Rich, smart guys screw up royally all the time. I think KSL is being short sighted--pissing off everyone in the area is not a wise idea. They would be march wiser to be making nice with IOV--I think they can actually get a better deal from IOV than from Placer County if they play it right, but at this point, if there is incorporation, there's going to be a very hostile relationship.

I should've been clearer.

I really don't know whether KSL/SVSH are smart. But I do know that they are behaving according to what they perceive as their rational self-interest, driven by the profit motive. Like most companies, their self-interest doesn't necessarily align with the self-interest of their customers.

As a consumer, you lose control of the money you spend after you spend it. So if you don't like what KSL/SVSH does with the money you spend with them, don't give them your money. If you do that, it has an effect on their bottom line. And if they understand that their actions are costing them money, it seems more likely to have an impact on their decisions than harumphing on teh interwebs.

I am curious--has SOV complied with these rules, or are they similarly non-compliant?

I'm guessing they have, since Tomlinson appears to be closely associated with SOV/SVSH, and they were presumably doing the research for a reason. But if I were in IOV, I'd certainly try to confirm that....

[old goat]

As a consumer, you lose control of the money you spend after you spend it. So if you don't like what KSL/SVSH does with the money you spend with them, don't give them your money. If you do that, it has an effect on their bottom line. And if they understand that their actions are costing them money, it seems more likely to have an impact on their decisions than harumphing on teh interwebs.

I'm not interested in skiing elsewhere. I'm interested in skiing at Squalpine and doing what little I can to make the skiing better for me and the resort better for the environment and for the community. At the moment internet harrumphing, letters to the editor, direct communications to KSL, and supporting local environmental/quality of life organizations are the options if one doesn't vote in OV. I'm doing all of the above. KSL is in the happiness business--they can only piss off the locals so far before the happiness starts to go away. I suspect that KSL keeps tabs on the community's response to its actions, including this forum, and modifies its actions accordingly, at least a little bit. Maybe the negative reaction to the mailer will discourage another one. I don't think incorporation is a good idea, and yet KSL's response to the effort pisses me off.

Your comments remind me of the response to people who question or criticize the actions of our government--"If you don't like what the government does go live somewhere else." Well, it's my fucking country, and my fucking ski area, at least for now.

Looks like the water issue is a non issue (see FOSV thread)--at least as far as reading the one page conclusion of a very lengthy and technical report goes. I certainly don't have the knowledge to critique it.

[creaky fossil]

As a consumer, you lose control of the money you spend after you spend it. So if you don't like what KSL/SVSH does with the money you spend with them, don't give them your money. If you do that, it has an effect on their bottom line. And if they understand that their actions are costing them money, it seems more likely to have an impact on their decisions than harumphing on teh interwebs.

Theory: B+ from the Accounting professor, C- from the Sociology professor, and a sad F from the Anthropology professor. But an A++ and a promise to write a reco for Wharton from the Business Ethics professor.

Reality: One person's buying decisions do not have any leverage over a large deep-pocketed entity, and it takes a lot of conglomeration and coordination of individual buyers' decisions, along with a strident social ...err, ahhh... movement, or whatever, to make any sort of point that could, in a moment of director/officer weakness, be heard and counted for 15 mins or so. Said differently: overheard in a board meeting, just before the Upmanns were broke out, nipped and lit: "nice job, radical activists, those boycotts really do give us a reason to puff a cigar!"

On the other hand, I agree completely about the imagined power of letters to the editor, calls to elected officials, and internet/twitter "activism." May as well scream at a brick wall. Occasionally you may get a congratulatory letter from a reader of your published letter to the editor, but you can get that much feelgoodism and more --so much more-- by posting a comment on facebook and counting your Likes.

[Hugh Conway]

KSL is in the happiness business--they can only piss off the locals so far before the happiness starts to go away.

While this is true I suspect that threshhold is very, very high, because as you imply - there aren't better local options in the minds of most.

[FriendsofSV]

http://unofficialalpine.com/?p=4932

[The Dad]

KSL is in the happiness business--they can only piss off the locals so far before the happiness starts to go away.

Unfortunately, they're in the private equity business. They do the business equivalent of flipping houses.

I don't think incorporation is a good idea, and yet KSL's response to the effort pisses me off.

I'm really not sure whether incorporation is a good idea.

It seems like my comments are being misinterpreted as agreeing with KSL's approach. My point is simply that KSL's behavior - including their willingness to spend to promote their perceived self-interests - is totally predictable. It is possible to thwart a well-financed but predictable opponent, but it requires tactics that minimize the effect of their financial advantage and maximize your nimbleness.

[epicski]

It is possible to thwart a well-financed but predictable opponent, but it requires tactics that minimize the effect of their financial advantage and maximize your nimbleness.

You should've heard the guffaws when Tomlinson (treasurer of HP in 1999-2003) critiqued IOV's figures ...just as the FBI, SEC & IRS Press Room critiqued bribes on his watch. Talk about poor timing

[The Dad]

You should've heard the guffaws when Tomlinson (treasurer of HP in 1999-2003) critiqued IOV's figures ...just as the FBI, SEC & IRS Press Room critiqued bribes on his watch. Talk about poor timing

Or, depending on your perspective, perfect timing.

[skier666]

Well, it looks like KSL sold the Bay Club to JMA and York Capital...interesting is that its JMA (Homewood development) but they also are big real estate bros in SF. A couple of the Bay Club properties in the city (Golden Gateway & Tennis Club) have had development plans to raise condos on the same site of the clubs but have had legal/community setbacks (Golden Gateway). So I'm assuming JMA wants to sell some condos and KSL has some extra capital on hand for other ventures (Squaw?) Hmmmm.

http://www.bizjournals.com/sanfranci...-ventures.html

[old goat]

Unfortunately, they're in the private equity business. They do the business equivalent of flipping houses.


I'm really not sure whether incorporation is a good idea.

It seems like my comments are being misinterpreted as agreeing with KSL's approach. My point is simply that KSL's behavior - including their willingness to spend to promote their perceived self-interests - is totally predictable. It is possible to thwart a well-financed but predictable opponent, but it requires tactics that minimize the effect of their financial advantage and maximize your nimbleness.

It is fair for a business to try to maximize profits. There a lot of different ways to do that, for both the short term and the long term. When you are in the hospitality business--a business that depends on making people happy--in the long run I believe you do better to make the people happy. Sure, you can fight tooth and nail to get your way. That way often leads to lawsuits, while the company hemorrhages money, drives away some of its base, while interest on borrowed money piles up with nothing to show for it. Several projects in the area have gone broke fighting (the crash didn't help any.) If KSL had played this nice the could have worked with (ie, bought off) OV residents, and either had incorporation go away, or wound up with a friendly incorporated OV. Sure KSL's approach was predictable, but not inevitable. They had, and have options.

[epicski]

Or, depending on your perspective, perfect timing.

It was the Fates. As the SEC & DoJ and Kara Stein and Kara Brockmeyer et al were about to release Holder's Not too Big to Jail video, I googled "Hidden Loot Lane", presto, all this stuff came up. Freaky. Hey is anyone on any committees on both sides of the NV/CA Border that procure $ for things like Federal Airports and water to the Federal Reserve at Pyramid Lake?

[FriendsofSV]

http://yubanet.com/regional/Progress...p#.U6ni2fldXSg

[FriendsofSV]

http://ski.curbed.com/archives/2014/...pic-valley.php

[FriendsofSV]

http://www.tahoedailytribune.com/nor...mpic-iov-squaw

[FriendsofSV]

“There’s been a really strong campaign by Squaw Valley Ski Holdings against the incorporation effort, and so for me, it’s one of those red flags when you see the developer actually fighting the community,” – Dr. Robb Gaffney

[FriendsofSV]

The owners of Squaw Valley have now spent almost a quarter million dollars to defeat the incorporation effort.

http://unofficialalpine.com/?p=5527

[FriendsofSV]

Ski Community Fights for Control

http://online.wsj.com/articles/ski-c...rol-1406337547

[old goat]

Ski Community Fights for Control

http://online.wsj.com/articles/ski-c...rol-1406337547

Pay site. Is there anything in this article that hasn't been covered in the other dozen or so articles and blogs you've posted links to?