What will happen to Park City MR?

[skifishbum]

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Park City Mountain Resort, a crown jewel of Utah’s multi-billion dollar ski industry.

one mans crown jewel is another' s
zirconium prince albert
i hope the giant douche chokes on it's shit sammie

[Canada1]

Question: Does Vail get any of the lease payments from PCMR if an agreement were reached??

I haven't read everything....but Talisker owns the land, they are the landlord, they would get the lease payments correct? If this is the case then Vail has zero interest in negotiating lease terms to PCMR. The only way Vail gets any benefit is by being the operator of the upper mountain. Period. If my understanding is correct, then it is completely useless to have Vail and PCMR going to mediation. The way I see it Vail will only crack when contractors show up to dismantle the lifts..........at that point Vail is removed from the picture and Talisker and PCMR reach an agreement for leasing the land.

Having Vail operate Canyons is one thing.......but handing the negotiation torch to them hasn't helped anything. Talisker is basically saying to Vail......"see what you can squeeze out of these guys....if you are successful we will let you operate on those parcels.....best of luck....report back....."

Last night I had a "insider" tell me Jack's unbelievably difficult and that he is the hurdle. In the past I have been told the bank is driving the ship and it was them that threw Talisker to the curb. Direct employees have told me Jack is a good guy, shrewd business man who just made a really bad decision on ski link. In short order, I don't frickin know who is driving the bus on the Talisker side.

The reality of it is, Talisker owns 2/3 of the property. Powder owns the key parcels and all of the significant assets. Decide who drives and how to split the profit. Get out of the way of my daughter doing French Fry and Pizza past your toothy monsters.

Selfishly, I like how things are and so my preference is Powder. Vail isn't bad either, but I know they will gouge for parking and gouge on food and probably do away with fast tracks(a pay to cut the line system) which is really what makes the ski experience there bearable for my uptight self.

just get it done.

[Danno]

I haven't read everything....but Talisker owns the land, they are the landlord, they would get the lease payments correct? If this is the case then Vail has zero interest in negotiating lease terms to PCMR. The only way Vail gets any benefit is by being the operator of the upper mountain. Period. If my understanding is correct, then it is completely useless to have Vail and PCMR going to mediation. The way I see it Vail will only crack when contractors show up to dismantle the lifts..........at that point Vail is removed from the picture and Talisker and PCMR reach an agreement for leasing the land.

I'm no expert here, but isn't Vail the current leaseholder? If so, they could sublet the land to PCMR (assuming such a thing is permitted under the primary lease). Talisker, as the LL, gets the same lease payments regardless of who is operating the resort, no? If VR negotiates a sub-lease with PCMR, Talisker isn't entitled to any additional lease payments, unless their contract with VR has provisions for that.

[My Pet Powder Goat]

Question: Does Vail get any of the lease payments from PCMR if an agreement were reached??

I haven't read everything....but Talisker owns the land, they are the landlord, they would get the lease payments correct? If this is the case then Vail has zero interest in negotiating lease terms to PCMR. The only way Vail gets any benefit is by being the operator of the upper mountain. Period. If my understanding is correct, then it is completely useless to have Vail and PCMR going to mediation. The way I see it Vail will only crack when contractors show up to dismantle the lifts..........at that point Vail is removed from the picture and Talisker and PCMR reach an agreement for leasing the land.

Having Vail operate Canyons is one thing.......but handing the negotiation torch to them hasn't helped anything. Talisker is basically saying to Vail......"see what you can squeeze out of these guys....if you are successful we will let you operate on those parcels.....best of luck....report back....."

You didn't read my quote to your last post, did you?

Ya, that's not gonna happen....PCMR has already tried to negotiate a lease above market value. VR wants to run and combine PCMR/Can. MTN will end up selling or leasing the chairs/water/etc to VR, not the other way around

[Bromontana]

I'm no expert here, but isn't Vail the current leaseholder? If so, they could sublet the land to PCMR (assuming such a thing is permitted under the primary lease). Talisker, as the LL, gets the same lease payments regardless of who is operating the resort, no? If VR negotiates a sub-lease with PCMR, Talisker isn't entitled to any additional lease payments, unless their contract with VR has provisions for that.

Right and I highly doubt VR has any intention of giving Talisker more money. The existing lease to VR is a silver bullet for Talisker's financial woes. That's likely why they are so keen to evict PCMR and keep that $25m gravy train from VR. Any outcome where PCMR continues to operate the upper mountain would put a lot of pressure on the VR/Talisker marriage, as one or both would be very much at risk financially. VR if they sublet without renegotiating the overarching lease; Talisker if any form of subletting occurs as VR will then be incentivized to GTFO of Utah.

[PointOfRelease]

Why would VR want to sublet the land back to PCMR unless it were for a huge sum?

I'm no expert here, but isn't Vail the current leaseholder? If so, they could sublet the land to PCMR (assuming such a thing is permitted under the primary lease).

[Danno]

Why would VR want to sublet the land back to PCMR unless it were for a huge sum?

Not saying they would or wouldn't (though $$$ talks). Just refuting the earlier post saying that any lease payment would go to Talisker; VR is on the hook to Talisker, but if VR leases the land back to PCMR, those sublease payments would go to VR (again, assuming there's no relevant contract provision that says otherwise). As for why they might, well, right now they have a ski area with no base area or base infrastructure, and possibly with no lifts. In this game of chicken, someone has to blink first. It could be VR, it could be PCMR.

[PointOfRelease]

Agreed that Talisker shouldn't matter unless there's some kind of sublease contract provision. On subletting, VR has 1.9 Park City ski areas right now and PMCR has 0.1. I think you're overstating PCMR's case. Sure someone has to blink first, but I don't see it being VR. I also can't think of a number that PCMR would be willing to pay that Vail would accept.

Not saying they would or wouldn't (though $$$ talks). Just refuting the earlier post saying that any lease payment would go to Talisker; VR is on the hook to Talisker, but if VR leases the land back to PCMR, those sublease payments would go to VR (again, assuming there's no relevant contract provision that says otherwise). As for why they might, well, right now they have a ski area with no base area or base infrastructure, and possibly with no lifts. In this game of chicken, someone has to blink first. It could be VR, it could be PCMR.

[creaky fossil]

Why would VR want to sublet the land back to PCMR unless it were for a huge sum?

Title 26 of the US Code

[Hutch]

Title 26 of the US Code

Ha. See Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985).

[Hutch]

The boundaries of the Talisker land come down further onto the front side than I thought. I

http://maps.summitcounty.org/flexviewers/countymap/

Zoom into PCMR. The parcel PCA-S-98-PCMR is a 2500-acre parcel that is part of the land in question. It includes the top terminals of Town, Payday and Crescent.

[creaky fossil]

Ha. See Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985).

Only 44 footnotes. That's what I call clear thinking by JP's clerk(s). How many of JayPee's clerks skied at Aspen pre-clerkship?

[Hutch]

Only 44 footnotes. That's what I call clear thinking by JP's clerk(s). How many of JayPee's clerks skied at Aspen pre-clerkship?

Some interesting backstory on that opinion here: http://supremecourtopinions.wustl.ed...984/84-510.pdf

[Bromontana]

Agreed that Talisker shouldn't matter unless there's some kind of sublease contract provision. On subletting, VR has 1.9 Park City ski areas right now and PMCR has 0.1. I think you're overstating PCMR's case. Sure someone has to blink first, but I don't see it being VR. I also can't think of a number that PCMR would be willing to pay that Vail would accept.

Saying PCMR's assets equate to 10% of the resort operation is not close to accurate. Brand, acreage, buildings, ski infrastructure, personnel, water rights to a base area that lacks natural snowpack often times, etc. = more like 70%+. The VR-leased land is near worthless without the assets PCMR controls. The value cannot be unlocked without spending $100m on another base area, all new infrastructure, securing water rights for snowmaking, paying off S.Co. to mushroom stamp the Wasatch with VR logos, etc. The reality is VR signed a lease for 2 resorts, paid for 2 resorts, and actually controls ~1.3 resorts. The legal wrangling is peanuts compared to the present value of what's at stake long term. PCMR has had years to prepare for this and there are no indications they are lacking in any category required to stick it to VR.

[TBS]

^^^Not to split hairs, but I think your analysis assumes the court will rule that all the lift towers & terminal buildings are lessee's personal property and not part of the leased premises. I have no idea of the lease wording, but that assumption could be a roll of the dice.

That said, I would imagine the water rights are the key asset. I assume Utard water law doesn't have some sort of use it or lose it obligation?

[Bromontana]

Good point, lifts are very much in the hands of the court. Keep in mind PCMR invested $7m between the lease expiration and the notice of failure to renew. Their claim to those improvements, physically or financially, I imagine is quite strong. Couple other things in play I think, though the lifts decision would certainly have an impact on the next steps.

While mediation may not work, I really hope the content somehow makes its way to the Park Record

[kkerley33]

I'm no attorney, and I can't comment on the strength of the reporting in the link below, but it seems to insinuate that Vail realizes that PCMR will tear down and move out once this plays out so the true question in my mind is this...

It seems that most of us have been looking at this from the angle of what is PCMR going to do to try and stay, but couldn't PCMR be dragging this out to force VR into leasing the lower mtn for an huge sum while "selling" the leasehold improvements?

FWIW, in my commercial dealings, my leasehold improvements have always remained lessee property unless I "failed to remove them" when I vacated the premises. So assuming similar wording, is the eviction date Aug. 27 or is Aug. 27 when the clock starts ticking for vacating the upper mtn?


http://www.theskichannel.com/news/fe...t-really-mean/

[itsnowjoke]

^^^Not to split hairs, but I think your analysis assumes the court will rule that all the lift towers & terminal buildings are lessee's personal property and not part of the leased premises. I have no idea of the lease wording, but that assumption could be a roll of the dice.

That said, I would imagine the water rights are the key asset. I assume Utard water law doesn't have some sort of use it or lose it obligation?

Water rights are certainly an important part of the puzzle.

But it's hard to imagine that VR would have willingly and voluntarily assumed this lawsuit without having a serious plan B in case Powdr failed to play ball. Plan B for the water rights, base area, etc.

I read an article in the last year or so that showed how Snowbird got all of their snowmaking water from a mine shaft located on the ski area property. Since Talisker bought the United Park city Mining company property outright, can they tap into mine shaft water? Do the water rights pertain to surface water only? Also, remember that Talisker owns the huge swath of UPCM mining lands in Big Cottonwood Canyon as well. Perhaps they know a water source there and will merely pump it over? I don't know the answer, just thinking out loud. A new base. Where would a new base area be located?

The Judge's ruling didn't provide closure, but did let Powdr know that they have no chance whatsoever of operating the resort any more. So thus begins a 60 day cooling off period. Interesting times indeed.

[My Pet Powder Goat]

I think water rights are huge, canyons needs access to that water if they,re ever going to compete. We just don't have enough available on premise. Culinary water is too expensive to expand snowmaking without that cheap water from pcmr. Which I understand they have a lot if both in the mine shafts and surface source.

Still I'd think: don't over think this. Pcmr most likely won't take their ball and go home. They'll reach a settlement to either sell outright, or pcmr will lease their asset to VR. Money talks.

[itsnowjoke]

I think water rights are huge, canyons needs access to that water if they,re ever going to compete. We just don't have enough available on premise. Culinary water is too expensive to expand snowmaking without that cheap water from pcmr. Which I understand they have a lot if both in the mine shafts and surface source.

Still I'd think: don't over think this. Pcmr most likely won't take their ball and go home. They'll reach a settlement to either sell outright, or pcmr will lease their asset to VR. Money talks.

I agree 100%. How often do we agree? AND it's the summer solstice. Weird.

[Danno]

That said, I would imagine the water rights are the key asset. I assume Utard water law doesn't have some sort of use it or lose it obligation?

It does (though I don't know the specifics of its abandonment proceedings). Regardless, it's not "use it now or lose it forever", it takes a while to establish that a water right has been abandoned. IOW, they would have time to sell and/or change the right to a different use.

[Hott Butt Mud]

PCMR has been on the 'extend and pretend' campaign for a long time. Extend the battle as far as possible into the court system and pretend that they have a fight in the battle. It's a pretty standard maneuver.

[TBS]

Thanks for that Danno. Sorta what I figured but IANAL

Still I'd think: don't over think this. Pcmr most likely won't take their ball and go home. They'll reach a settlement to either sell outright, or pcmr will lease their asset to VR. Money talks.

On the other hand...
Everything up to now has just been getting the pawns off the table. I can't imagine a scenario where Vail is better off investing the dough necessary to get lift access, snowmaking and amenities to the upper part of PCMR, all to increase their operating risk in a new market where their existing resort is a black hole of despair. Much better off to find the lease rate that makes Powdr scream in mortal agony, but not quite die.

That allows a nice stream of predictable earnings, giving Vail time to get the Canyons in order. And if they get that accomplished, they can make Brighton or Soli offers they can't refuse.

[creaky fossil]

Some interesting backstory on that opinion here: http://supremecourtopinions.wustl.ed...984/84-510.pdf

I was on the edge of my chair for hours while unpacking the dense and rarefied rhetorical jousting contained within.

[bobstevens]

The Cummings are simply throwing a temper tantrum after years of bleeding PCMR to feed their lavish lifestyle. They think they can hold the town hostage, but little do they seem to know, that Park City is full of very wealthy, very politically connected homeowners who know US Senators, Congressman and Presidents. If I were the Cummings, I'd cut the best deal I can with Vail before all their other land-holdings get re-zoned, taken by imminent domain, or their numerous commercial land use permits get cancelled or repealed by the local politicians. (FYI -that's how the 'ol US of A works).

And then we'll have massive Park City Canyons Resort...