Skiing in Park City this winter? Don’t make reservations yet
Park City, Utah’s most popular ski resort is a mountain divided. The top—where the ski runs are—is owned by one company. The bottom—where public parking and the lifts start—is owned by another.
Currently neither company is allowing the other access to its property.
Because of this legal spat over big bucks and white powder, it’s possible there will be no ski season this year at Park City Mountain Resort, rated one of the most popular in the country. If that happens, the local economy could end up on a downhill run.
“It will have a direct impact on hundreds and hundreds of employees that don’t have a job,” said Hans Fuegi, owner of the Grub Steak Restaurant in the middle of town.
“If the ski resort does not open up, there is going to be some real damage,” added gallery owner Thomas Anthony. “I don’t know how there could not be.”Even though two other resorts nearby will remain open, Canyons and Deer Valley, Anthony said, “There are people who think that if Park City Mountain Resort is closed for the winter season than maybe the town of Park City will not be open for business.”
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Here’s how this all came to pass. For years, the resort has been run by PCMR, owned by the Cumming family, a local wealthy family. They paid rent to the owners of the top of the mountain, a Canadian company called Talisker. The rent was low, $155,000 a year. In April 2011, the lease lapsed—PCMR didn’t realize it—and Talisker went out and found a much higher paying tenant, Vail Resorts.
Instead of paying $155,000 a year in rent, Vail signed a long-term contract to pay $25 million a year. As part of the deal, Vail also leased access to the entire Canyons resort next door.
PCMR was then ordered evicted by a court, but CEO John Cumming hopes to appeal. On Wednesday, a judge heard arguments about what sort of bond PCMR should put up to delay eviction, and at least have the current ski season go forward while it appeals its loss in court.
How much that bond should be is widely disputed by both sides. PCMR thinks it should be anywhere from $1 million to $6 million. Talisker and Vail think it should be at least $14.7 million for this year.
Cumming released a statement to CNBC saying: “Our goal is, and always has been, to keep the resort open for the 2014/15 season and beyond, but unfortunately that might not happen if a reasonable agreement is not reached. This situation is not good for anyone. It’s not good for this community, Vail’s shareholders, or us.”
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Vail Resorts went into this transaction knowing that access to the bottom of Park City Mountain Resort wasn’t guaranteed, and it believes the other resort it leased, Canyons, still makes the $25 million a year in rent worthwhile. Ideally, it would like to buy out the Cummings, but the billionaire family has indicated it won’t roll over out of desperation.
Cumming told Forbes he might rip out the ski lifts and put in a winter sports park at the bottom of the hill. Vail could try to build a work around, somehow getting skiers at Canyons to Park City Mountain Resort by going across at the tops of that mountain, a solution that appears expensive, unwieldy and unlikely.
Most are hopeful this will be resolved sooner rather than later. “I have had a number of interactions with both CEOs, and they are men of character,” said Park City Mayor Jack Thomas. He has noticed no impact on the local economy yet because of the dispute, but if the resort is closed this year, “The impact could be in the range of $180 million.”
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Talks to end the standoff continue behind closed doors. “All the parties are working hard through the court-ordered mediation to bring an end to this dispute recognizing that all of us need to get things resolved very quickly,” said Vail Resorts spokeswoman Kelly Ladyga.
But in court Wednesday during the bond hearing, PCMR attorney Alan Sullivan said that experts from both sides valuing the land and reasonable rents have been “two ships passing in the night.”
John DeNicola manages the local Bahnhof Sport ski equipment store, and he’s watching inventory as ski season ramps up, wondering if he should reduce orders.
“Not only am I watching as a store manager here, but our home office in Michigan is watching closely, because it could affect our entire store corporatewide,” he said. “I just want the resort to be open at this point. I’m not really concerned who is going to be operating, just don’t shut us down, please.”