When lease negotiations broke down in March, Park City Mountain Resort (PCMR) filed suit in 3rd District Court and alleged publicly that if it didn’t get its lease renewed, it would be forced by its competitor to cease operations. But Talisker has issued a statement last week saying it would ensure PCMR would open for the upcoming ski season.
According to a release from Talisker, it has provided Park City Mountain Resort with a written commitment not to close PCMR during the upcoming 2012-13 ski season. And that binding commitment, at a rent that “essentially assures PCMR a profit over this period,” was delivered to PCMR in April. This was weeks prior to PCMR’s posturing that it might not be open for the upcoming ski season. PCMR has gone so far as to place a disclaimer on the 2012-2013 ski passes that the resort may not be opened this season.
But PCRM is not the only ski resort with financial woes. Mammoth Lakes, about 250 north of Los Angeles, is the second California municipality to seek bankruptcy protection this month. It followed Stockton, which was battered by rising employee costs and falling property values. While Mammoth Lakes’s circumstances are different, the move into court may encourage other struggling municipalities to take the same step..
Mammoth Lakes, at an elevation of about 7,900 and surrounded by mountains rising to as much as 11,000 feet, owes its livelihood to Mammoth Mountain Ski Area. As recently as 2005, when the resort was sold for $365 million to a buyout group led by Barry Sternlicht, the founder of Starwood Hotels & Resorts Worldwide Inc., real-estate investors were bidding on area properties sight-unseen in hopes the region might one day rival Vail or Aspen.
Town officials made a deal in 1997 with Mammoth Lakes Land Acquisition to expand and modernize the airport and build a hotel, gas station, restaurant, condominiums and a recreational vehicle park. After the deal was stalled by an environmental lawsuit, the town backed out in 2004 when the Federal Aviation Administration, which was financing airport improvements, said the development plan was incompatible, said Charles Long, who was the interim town manager at the time.
Mammoth Lakes Land Acquisition sued and won a judgment for $30 million. The jury award was based on projected earnings of $185 million. The judgment grew to $43 million as the town exhausted its appeals.