Tom Ross: Sale reversal deflates community
But owner of ski area doesn't define Steamboat Springs
Steamboat Springs — Deflating.
That’s the best word I can use to describe the emotions that pervaded Steamboat Springs last week. When the news broke that American Skiing Company’s deal to sell the ski area had been abandoned, you could almost hear business leaders gasping.
The sensation was reminiscent of sliding into home plate in a childhood baseball game and having your wind knocked out by the catcher’s overly aggressive tag. For a couple of seconds you’re convinced you’ll never take another breath. But within minutes, you’re ready to go back into the game.
Steamboat residents had nearly 11 months to acclimate to the news that American Skiing Company intended to sell Steamboat and that soon, ASC’s problems would no longer be Steamboat’s problems. And I dare say, people throughout the community were embracing the change. If that can be said of the general populace, it can certainly be said of ski area employees.
During the most trying of times, when they had to revise their strategy in the wake of the airline and travel crises that arose after the terrorist attacks of Sept. 11, Steamboat Ski Area executives had another reason to stay up late at night.
They had to prepare meticulously for site visits by teams of outside business performing due diligence on a possible purchase of the ski area.
Steamboat’s department heads went as far as creating a war room in a small conference room on the fourth floor of the gondola building. There they prepared the materials necessary to show the ski area off in its best light.
How deflating do you think it must have been last week when all that work turned out to be for nothing.
Then again, there may be some ski corp. executives who feel their jobs are safer this morning than they would have been had the sale gone through.
I really don’t know.
There are a lot of things we don’t know. Why did the deal fall apart?
Was it because the offer Vail tendered for Heavenly, Calif., made Triple Peaks’ offer for Steamboat look like a bargain basement price born of desperation?
Or was it that Vail brought more cash to the Heavenly deal than Triple Peaks brought to the table for Steamboat?
Here’s a thought someone planted in my mind over the weekend.
Suppose the original lenders on the Steamboat Grand were smart enough to demand that their loans also encumber the more tangible assets of the ski area. And suppose that when it came time to close the sale of the ski area, without the hotel included in the bargain, those banks refused to release their liens on the ski area.
Suppose they feared that the hotel without the ski area would be harder to sell than it already was.
I can recall that when the city approved a permit for construction of the Steamboat Grand, one of ASC’s vice presidents of real estate told me it was a $70 million project. Add on a big chunk of money because the construction took a full year longer than it expected.
Then add add on the carrying costs of all the unsold quarter shares that remain in the hotel. Incredibly, the amount of money ASC has in the hotel might be within $10 or $15 million of the price Triple Peaks would have paid for the ski area.
When he was here Feb. 1 to announce the signing of the contract to purchase Steam-boat, Triple Peaks principle Tim Mueller said he thought the Steam-boat Grand was a tremendous asset to have at the base of his ski area as long as he didn’t have to own it.
Speaking of ownership, when was the last time the current ownership of the ski area defined Steamboat either the community or the ski area?
I’d say that hasn’t been true to any great degree since the founding pioneers of the ski area bowed out.
Did Kamori Kanko Ltd. define Steamboat in the early 1990s?
The community of Steamboat Springs is defined by its people and its institutions. The ski area is defined by tradition and the hard working people who execute its business plan.
Some people have asked me if the ski area will close down if ASC is forced to declare bankruptcy.
Don’t fret about it.
The Steamboat Ski Area is a successful business. The first thing the trustees would do in case of a bankruptcy is assure that the principle source of cash flow wasn’t undermined.
ASC could declare bankruptcy in June and the ski area would still open the Wednesday before Thanksgiving.
The jets would begin landing at Yampa Valley Regional Airport on Dec. 15, and the skiers would arrive.
Vacationing skiers don’t check the profit and loss statement of American Skiing Company before they book their trip. They go on the Internet and check the snow report.
And they’ll continue to arrive for the great snow and short lift lines, the laid back atmosphere, the above average lodging and the great shopping and dining.
We’ve had the wind knocked out of us. But it’s time to get back in the game.
Steamboat will always be Steamboat.
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Real estate transactions totaled $42,885,400 across 51 sales for week of Sept. 17 to 23.