One day after the biggest news in Park City history hit the web, the initial shock is still blistering through this small Utah mining town. Parkites and ski enthusiasts are now asking more questions than there are answers for. In other words, what will Vail Resorts’ ownership mean for the community of Park City?

Powdr Corp. gave up the legal fight for possession of their hill yesterday, selling to Vail Resorts for $182.5 million in cash and allowing VR to net nearly 700,000 square feet of commercial and residential development at the base of PCMR, and a combined ski acreage of 7,000.

“Of course it was always about money,” posted John Sands. “Said to friends a long time ago, PCMR would sell for the right price. The “fight” was simply posture, simply business; nothing personal.”

“This change allows me to access more terrain and more importantly it’s going to give me the ability to ski with all of my friends that have traditionally bought those PCMR passes but on the other hand I’m having a hard time fathoming how what amounts to a clerical error has forced such a monumental impact. It’s as if I were late to pay my property taxes and, as a result, I was forced to sell my house,” said local Brett McVey.

There is no obvious consensus regarding the purchase. Most business owners express relief, some see the move as a hostile takeover while VR’s offer to include PCMR into their Epic Pass library seems to have tempered the majority of ill will. However, not everyone is convinced Park City will be better off.

“The town seems pretty split, as am I,” posted long-time local photographer Mark Maziarz. “I love that buying one pass for a pretty affordable rate ($749) will let us ski two big resorts. But I’m not excited about the corporate presence of Vail in Park City. Especially owning two of the three resorts. I’d prefer a little corporate diversity.”

“Hope it’s a benefit,” posted Colleen Konicek. “Been skiing this mountain for over 40 years and would hate to see too drastic changes. I’m still nostalgic for the mountain and town of my youth every time I visit.”

Other outsiders are rejoicing however. Andrew McGuigan posted “I’m stoked, I now have Park City under my season pass. Let’s be real, $560 for Heavenly, Kirkwood, Northstar, Keystone, Mt. Brighton, A-Basin, Afton Alps, the Canyons, and now Park City – that’s a deal and a half.”

But to some, skiing outside of Utah isn’t a perk. “Epic does not treat student locals as well as PCMR or how the Old Canyons used too,” wrote Darcy Papenfuss. “I wish they would remember we ski during off season, we teach our children to ski, and we have the best snow here, so jacking up the price so we can ski elsewhere does not appeal to us locals.”

Andrew Soulo wrote, “I have a lot of mixed feelings about this…on one hand f*ck Vail Resorts and their corporate douchiness but f*ck yeah I’ll be able to ride Park City for free this year!”

Park City local Jeff Turbeville lauded the departing regime. “While this is sad, it proves that POWDR, and John Cumming, were the bigger persons in all of this and ultimately looked out for the good of the PCMR employees and Park City community! As we all know this could have dragged on for years in appeals so kudos to POWDR for doing the right thing for the good of all!”

Deer Valley’s Colleen Reardon told KPCW, “We’re relieved this dispute has come to an end and we just want to make sure that PCMR is thanked and recognized for their contributions in advancing Park City into one of the world’s premiere ski destinations. Vail Resorts is a great operator and they recognize the uniqueness of Park City and it’s been run very well as a three-resort town and I don’t see that changing.”

But with a new connector lift between PCMR and Canyons planned for installation this summer, residents wonder if Park City will become a two-resort town.

Could ‘Canyons’ become “Park City Mountain Resort”?

“Next season we’ll roll things over [to Vail Resorts operations and administration systems] but right now we’ll start preliminary planning to make sure the initial integration goes smoothly and start working with the staff and community on what needs improvements at Park City so we can start to put together a capital plan,” said VR President and PCMR Interim COO Blaise Carrig. More than 40 positions were eliminated at Canyons when Vail took over for Talisker Corp. in 2013 but Carrig said PCMR was a “lean operation” so there would actually be more jobs, growth and opportunity going forward.

“The fact that we will have the ‘Largest Ski Resort’ in the country bodes well for the local community on many levels but there will be a concern without the competitive diversity. Still on the fence on this one… we will see,” commented local Daniel Gripentrog.

Government officials also worry about the sales tax revenue that will be diverted to Colorado instead of staying in Utah. Online sales of the Epic Pass generate revenue for Colorado but Carrig explained, “Wherever skiers show up, we pay sales tax on that area. It’s a formula that we’ll use to try to make sure that tax is fairly allocated. The Epic Pass tax will go to Park City if a person skis more days in Park City. The tax is paid based on their use of that place (rather than the location of VR’s headquarters).”

Nathan Rafferty of SkiUtah said they may soon be promoting 14 areas instead of 15; not because Vail would opt out of SkiUtah’s statewide marketing program like they did with Colorado Ski Country but because of the single ownership status. “Blaise has assured us that won’t happen (leaving SkiUtah entirely). We’re taking it one season at a time. This year they are Canyons and Park City.” One insider hinted that plans for a name change to an all-encompassing “Park City Mountain Resort” are forthcoming.

A Few More Answers

• Carrig says Woodward Park City is on the backburner while they focus on transitioning to the VR system and interconnecting the resorts.
  
• VR will sign a lease with Deer Valley to annex the Jupiter Peak acreage.
  
• VR will keep the PCMR logo
  
• PCMR passholders will have to ‘upgrade’ their pass to the Epic Locals or the Full Epic Pass. They will be allowed to keep the add-ons if they bought night-skiing, parking and FastPass access.
  
• The Epic Local Pass includes PCMR.
  
• Parking at both resorts will still be free.
  
• Snowboarding will still be allowed
  

The “bad” or “good” of this monumental transaction remains to be seen but Carrig says the proof is in the pudding.” Give us a chance,” he pleaded. “The essence and value of the feel and connection between the town, the community and the mountain is a big part of the inherent nature of PCMR and we value that and I don’t think we’re going to change that.”

When you ask John Chadwick what’s the craziest job he’s ever had you would think the commercial developer would say “owner of a ski resort”. The longtime Logan local and industrial developer will be introducing Utahns to the 15^th ski area in the state – Cherry Peak Resort- this December.

Why Cherry Peak Resort

“My family bought the property in 1967 and as a kid I always thought it would make a great ski resort,” said Chadwick. Then in 2002 he sold a car to an Argentinian Olympic ski coach and wound up taking him skiing on his mountain. “We got to bottom and he said, ‘you need to put ski resort here.’” Eight years, three lifts and 23 trails later, Cherry Peak Resort will service Logan and surrounding communities; a base population, Chadwick says, of about 150,000. “The location is what will bring people,” he said. “We’re 14 minutes from Smithfield, 8 minutes from Richmond, 15 minutes from Lewiston. If you live in Salt Lake and Park City, you can all get to a resort quickly but that’s not the case up here.”

Beaver Mountain is the closest ski area but it does have its access issues with a long drive and windy road. Chadwick jokes Cherry Peak Resort will be the convenience store of skiing. “It’ll probably never be a destination area but it’ll keep locals from driving hours to Idaho or the Cottonwoods to go skiing,” he said. “This is a ski resort not an excuse for a housing development. We could do development in the future but have not made plans along those lines.”

In addition, because he operates on private land, they have no issues with removing boulders and trees. “The runs will be as smooth as Deer Valley, we’ll have snowmaking and the largest night skiing operation north of I-80.” Cherry Peak will open 17 runs for night skiing. He plans for waterslides, ziplines, mountain biking, concerts, family reunions and weddings in the summer.

In case you were wondering what the snow will be like, climate studies record snowfall comparable to Park City’s with an average annual 322 inches at the summit. (The base elevation is 5800’, peak 7000+’, with almost 1300’ vertical.) Lift tickets this season are $42 adult, $32 youth. 23 trails.

The entire Cherry Peak Resort project is funded through private investors, thus eliminating the pitfalls that other resort planners have plummeted into. “You can’t go bankrupt if don’t have debt,” said Chadwick. “That’s the biggest difference.” So maybe Chadwick’s latest venture isn’t crazy after all.

“No news is good news” was definitely not what the anxious crowd at today’s hearing in Park City wanted to hear. But it’s about the only thing that anyone could say to sum up the latest in the Talisker/Vail Resorts/Park City Mountain Resort drama. After nearly four hours of back and forth, and private chamber meetings with attorneys, Judge Ryan Harris stepped back into his courtroom after lunch to announce that he wasn’t ready to make a decision.

Attorneys for both sides spent the morning making their case for a bond amount that would allow PCMR to open this season. PCMR has already threatened to take their toys and go home if the figure comes back too high. The dollar amount would encompass back rent from 2011 when PCMR failed to renew their lease as well rent for this season. Talisker is arguing for $123 million for the last three years and two future years (including damages) while PCMR said the fee should be based on fair market value; somewhere between $1-6.5 million per year.

PCMR argued that rent should be determined by what a landlord can get and not by what the tenant could potentially earn. The hearing revealed that Robert Katz has made an outright offer of $100 million for PCMR’s property but PCMR’s John Cumming called it ‘lowball’.

Neither Cumming nor Vail Resorts’ Rob Katz made it to the courtroom. Some speculate they were somewhere else continuing mediation. The talks were set to expire August 24 before the August 27 hearing but both sides requested to extend the mediation through this Friday. It makes sense that the Judge would want to wait until after mediation to rule. Perhaps the sides can come to a more amicable agreement on their own? Plus, he’s cautious about angering either side as the ultimate victim will be the Park City community should PCMR leave Talisker and Vail with nothing but a sheep pasture.

Court will reconvene September 3 at 1 p.m.

 

Park City Mountain Resort fought the good fight yesterday as they appeared in Summit County Utah’s 3rd District Court. It was finally time for Judge Ryan Harris to hear both sides in the issue of whether PCMR renewed its lease with Talisker Land Holdings.

The judge had originally decided the lease should be construed under a strict landlord/tenant standard (i.e. you sign a lease, you have a duty to notify the landlord of your intent to renew when it expires and if you don’t, you lose your lease) but PCMR had made a motion for summary judgment for reconsideration. In other words they want to court to overturn that initial ruling so that they can go to trial where presumably a jury of peers would decide whether PCMR had an implied lease renewal.

You see, once you filter out all the legal mumbo jumbo and puffery, yesterday’s hearing boiled down to two arguments. 1- could PCMR reasonably believe that they had constructively renewed the lease even if they didn’t send over written notification by the lease deadline and 2- are there additional interests involved in this lease that would suffer undue harm if they had to vacate?

At dispute is a longstanding lease that PCMR had with United Park City Mines to allegedly pay $155,000 a year to run a ski resort on its land. There was an option to renew clause that would extend the lease (for the same terms) through 2051 and all PCMR had to do was notify them in writing by April 30, 2011. UPCM transferred its land rights to Talisker in 2003 making Talisker the new landlord and the recipient of the letter of intent.

The renewal deadline came and went without written notice but it took Talisker nine months to speak up. The following year Talisker announced it was leasing Canyons Resort to Vail and that as part of the multi-million dollar deal, Vail would also get to take over the PCMR property either as a landlord or land operator depending on the outcome of the case.

PCMR’s attorneys argued that when a landlord grants an option to extend the lease he can’t go out and look for a more favorable tenant as soon as the original lease is up. The judge questioned that if it was so important that the property remain in PCMR’s hands until 2051, why not just put it in the lease? Why even create the option to extend if you could write one, 80-year lease? PCMR explained that because there is a risk of failure or decreased revenue in the ski industry they wanted some flexibility that would allow them to terminate the lease.

Harris asked, “If Vail is willing to come in and pay more why does it matter (to have to keep the original tenant)?” To which attorney Mark Sullivan said, “The property is tied up so a new tenant can’t just set up shop and make use of the property.” PCMR owns the base facilities, parking structures and lower lifts so that even if Vail assumes the lease they won’t have access to the resort from Park City’s base area. “A landlord can’t replace the tenant with someone who can’t come in and operate the property in the way it was intended to be used,” Sullivan explained. Underneath this argument is the assumption that the city only approved PCMR’s master development plan because it intended for PCMR alone to run the show from base to peak. And PCMR contends that Talisker agreed to be bound by this master plan agreement.

“Talsiker agreed that the leased premises would continue to run relevant to the 1998 development agreement. They committed to PCMR,” said Sullivan. He described how PCMR relied on Talisker’s previous discussions of a long-continued relationship to sink more than $100 million in improvements on the land since 1998. “They would talk about how much they looked forward to working with us and joked about how old they were going to be in 2051. There was a common understanding that the lease would continue. What Vail hopes to obtain is a windfall where everyone has operated on the assumption that the lease would not expire till 2051,” he said.

Talisker’s attorney Howard Shapiro simply stood, looked at PCMR’s table then said to Harris, “They only had to provide 60 days’ notice and they failed to do that. All Supreme Court cases make clear that that is not to be excused. They have negligently slaughtered the golden goose that has been laying eggs for decades.” He also refuted PCMR’s suggestion that to invalidate the lease would cause undue hardship on creditors and the city. “There is no harm to anyone else if you give Vail the business. The land in question would continue to support a vibrant ski area.”

Shapiro continued, “You can’t ignore the reality of the leases,” he said. “Even extended they expire in 2051 not in perpetuity. This day was bound to come but due to their negligence it’s here today. The Court must resist the temptation to ignore legal principles.”

Judge Harris told the court that he gives himself 60 days to rule on these matters but because of the complexity it might be a little longer. The next chapter in the Park City saga is next Tuesday, April 8, 2014. PCMR will argue that Talisker had no right to enter into talks with Vail without notifying them first and making the same offer to them.

PCMR said in court yesterday that they would like to settle and that they have made “plenty of offers” but that Vail and Talisker are unresponsive. There’s still time for the parties to work it out but it probably won’t happen before the judge decides on these issues. It might have to be the prospect of a jury trial that forces someone to bend.