December 20, 2006
Steamboat SpringsSteamboat Springs — The Steamboat Ski Area is being purchased by a veteran ski resort developer and operator with access to significant financial resources. — The Steamboat Ski Area is being purchased by a veteran ski resort developer and operator with access to significant financial resources.
Steamboat Springs — The Steamboat Ski Area is being purchased by a veteran ski resort developer and operator with access to significant financial resources.
Intrawest announced Tuesday that it has reached an agreement to buy Steamboat Ski and Resort Corp. and its related assets from American Skiing Co. for $265 million. The deal is expected to close in late March.
Intrawest president and chief operating officer Alex Wasilov said he was as drawn to the Steamboat community as he was to the ski area.
“The town environment in Steamboat is what attracts people there,” he said Tuesday from Intrawest headquarters in Vancouver, British Columbia. “It is the asset that differentiates it from other resorts, so we are investing as much into our relationship with the community and the town as we are with the assets that we are purchasing.”
Wasilov said it is too early to say what sort of improvements or changes Intrawest might make at Steamboat. Those announcements will come once the sale has closed.
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“We don’t have a definitive plan that we can talk about now,” Wasilov said. “I think traditionally, though you would look at a company like Intrawest and assess how we manage our other resorts and could assume that we would make appropriate investments to create demand and enhance the experience.”
Intrawest recently expanded the skiable terrain at Whistler Blackcomb, its largest resort. A new $9.2 million lift opened at the resort last weekend, which adds 1,000 acres to the ski area and brings the total terrain to 8,100 acres.
“Because (American Skiing Co.) has not invested significantly in Steamboat ski resort improvements over the years, that leaves it open for Intrawest to make some improvements in the maintenance and in capital,” said Rob Perlman, president and CEO of Colorado Ski Country USA.
Steamboat would be one of Intrawest’s largest ski resorts with almost 3,000 acres of skiable terrain.
Intrawest has interests in 10 North American ski resorts. It owns Copper Mountain and manages Winter Park, which is owned by the city and county of Denver.
“We believe we are affiliating ourselves with an incredible consumer base in our industry,” Wasilov said. “We’re betting on the fact that demand will not only sustain itself, but with our involvement and our investment in the mountain and the community, that we will be able to grow the business over time.”
Intrawest owns other travel businesses and resorts not related to skiing. Real estate development complements its resort operations.
“We love to see the two work together, but in every location, it’s different in terms of how much real estate development is there,” Wasilov said. “So, from our perspective, we like to see both of those parts of our business stand on their own.
Wasilov said the development potential at Steamboat is somewhat “restrictive” because of the lack of land. “We’re not acquiring Steamboat for the redevelopment opportunity,” Wasilov said. “We’re really acquiring Steamboat because of its mountain operations business and its ski business.”
The Sheraton Steamboat Resort property remains for sale, and many had speculated that whoever bought the ski area would also buy the property, which includes the 315-room Sheraton hotel, Ski Time Square commercial buildings and Thunderhead Lodge.
“We’re certainly aware of it, and we have looked at it, but it’s premature for us to comment on whether or not we are going to move forward in that area or not,” Wasilov said.
From a resort management standpoint, not much has changed since Intrawest was acquired by the New York-based Fortress Investment Group for $2.8 billion in October. The acquisition meant Intrawest had more money at its disposal to invest in its resorts, but no grand plans have been released. That is unless you count the acquisition of the Steamboat Ski Area.
“If anybody was in doubt about Fortress’ seriousness about being in the ski business, they should not be in doubt any longer,” said Mike Berry, president of the National Ski Areas Association. “At the end of the day, it bodes well for Steamboat. They will probably address some of the issues that everybody in this community wants to be addressed, whether it is capital improvements or other areas the community wants improved.”
Wasilov said Intrawest and Fortress plan to hold on to Steamboat “indefinitely,” and that the acquisition is a long-term investment.
“The growth in the industry has been sufficiently powerful that it makes sense for them to invest in companies that have real assets and generate real positive cash flow,” Berry said. “That’s what investors are looking for.”