Tallest resort still short on funds
REVELSTOKE, B.C.—Revelstoke Mountain Resort can now claim to have the most vertical of any ski area in North America. But will the lifts that allow that boast continue operating?
That was the question several months ago when the Denver-based majority owner, Don Simpson, concluded that his pockets were not nearly deep enough to pay the expenses of the new ski area, now in its second year of operations.
Real estate sales had gone well, yielding $130 million, but a big ski area requires massive amounts of money to operate. Skier visits last year were still below 90,000. Although located along the TransCanada Highway, Revelstoke is still several hours from Calgary, and air connections are far weaker than is commonly found to major ski areas.
At that point, the Vancouver-based Gaglardi family, agreed to step up. They have something called The Northland Properties Corp. The company's Tom Gaglardi recently meet with community members in Revelstoke.
"It would be tough to overemphasize the financial difficulty the resort was in during the fall," Gaglardi told the audience. Nor, he added later, is the resort out of the woods.
The problem for the resort is that it has to sell real estate or lift tickets, and it's not in a good position to do either one. Gaglardi said the majority owners are spending millions of dollars every month, and do intend to move forward with two new lodges at the base area this summer, despite the fact that the real estate market has "evaporated to basically zero."
This year, while other resorts are seeing reduced visitation, Revelstoke actually hopes for an increase, to 130,00 visits. Galgardi said the break-even point for the resort is at about 250,000 skier days annually.
Real estate still struggles in resorts
STEAMBOAT SPRINGS, Colo.—The end-of-year real estate reports were not unexpected. From Aspen to Steamboat Springs to Vail, the reports at the major resort areas are about the same: 40 to 55 percent less dollar volume was recorded in 2008, compared with the previous year.
In Steamboat Springs and surrounding areas, dollar volume for last year was 45.7 percent of the preceding year. Altogether, $725 million in sales were reported, according to Land Title Guarantee Co.
In the Vail market, sales were down 52 percent last year, with a final tally of $2.75 billion. In the Aspen market, sales were down 46 percent in dollar volume, to $1.37 billion. The Glenwood Springs/Garfield County market—down-valley from both Aspen and Vail—had similar numbers: 51 percent less volume, down to $723 million.
The number of transactions was also down significantly in all these markets. However, even when dollar volume had been increasing in recent years, there had been fewer transactions. One year when the Vail/Eagle Valley market increased 10 percent in dollar volume, there had been fewer transactions.
In Teton County, Wyo., the number of transactions was down by 50 percent. No drop in dollar volume was reported by the Jackson Hole News& Guide. But the newspaper notes that transactions had fallen 19 percent during the dot-com bubble burst of 2000 and another 22 percent in the fallout of 9/11.
In Utah, the Park City market was still at $1 billion for 2008, but that was the lowest since 2004, noted the Park Record. The number of transactions during the fourth quarter was the lowest since 1992. Still, real estate agents tell the Park Record they think it can't get any worse—and will soon get better. "I'm seeing the market going from being stuck to picking up in small increments," said Jess Reid, of Jess Reid Real Estate. "It's frozen, but it will thaw out," said Jim Lewis, of Summit Sotheby's. "It's always darkest before the dawn, and it's pretty dark now,"
In Aspen and Vail, the contraction in sales has yielded a similar contraction in sales offices. The greater upheaval was in Aspen, where a real estate company dropped its franchise for Aspen Sotheby's International Realty. The franchise agreement is being acquired by another firm, Morris and Frywald Real Estate, a firm founded in 2000 that has grown to almost 50 brokers. Citing the firm's website, The Aspen Times reports the firm did $242 million in sales last year.
Jury still out on C.B. expansion
CRESTED BUTTE, Colo.—Usually, when the U.S. Forest Service agrees to take on a project for environmental review, the verdict is already in. All the rest is more or less a formality.
That was the case in Vail's Category III ski area expansion of the 1990s, and probably any number of ski expansions. Before the Forest Service accepts a project, it seeks evidence that the proponent has broad community acceptance. Without it, the project is unlikely to move forward. But rarely does the environmental review yield grounds for a veto.
But history is no prelude, Forest Service officials assure Crested Butte town officials, who remain opposed to a major ski area expansion at Crested Butte onto neighboring Snodgrass Mountain. A project in Santa Fe, N.M., was denied after a review under the National Environmental Policy Act.
In the Crested Butte case, the Forest Service is still awaiting evidence that the ski area owners, Tim and Diane Mueller, have gained the critical community acceptance. A letter from Charlie Richmond, the supervisor of the Grand Mesa, Uncompahgre and Gunnison National Forest, says as much.
Steve Glaser, of the High Country Citizens Alliance, said the NEPA environmental evaluation does not kill process. "If you want to kill a project, you have to find a violation of a law, not the NEPA process," he says.
Often, the Forest Service has been sued for violating NEPA process. When it does, the Forest Service revisits the process, goes through the process differently, but the ultimate decision is not changed
