by C.B. Hall, Vermont Business Magazine For the most part, Vermont's winter resorts find themselves well-positioned for the upcoming season, as general factors - a strong economy, a reasonably steady Canadian dollar, and continued infrastructure investment - give cause for optimism. And last winter, while hardly stellar, was not bad: It saw an uptick from the forgettable preceding season, with total skier-days rising by 1.2 percent to 3.96 million, according to Ski Vermont, the Vermont Ski Areas Association. The association's annual report described the figure as "just under the state’s ten-year average for visitation."
The weather allowed for a long season. Jay Peak notched its longest ski season ever, and skiers and snowboarders were still hitting Killington's slopes while the rest of us were planting potatoes and getting out our swimming gear. The heart of the season left resorts fretting, however, as both the Christmas holidays and the M.L. King Birthday weekend saw unseasonably warm temperatures. But Mother Nature regained her kinder disposition - at least as snow-lovers see things - leading to season figures that Ski Vermont president Molly Mahar termed "an impressive result, despite challenging weather conditions for much of our core season."
Since last season, much has been happening on the business side of Vermont skiing.
Big powder at Okemo last season and hoping for more this season under new Vail ownership. File photo.
On September 27, Broomfield, Colo.-based Vail Resorts announced that it had purchased Okemo Mountain Resort and two other ski areas from Triple Peaks, LLC, for approximately $74 million. As part of the transaction, and with funds provided by Vail Resorts, Triple Peaks paid off $155 million in leases that the three operations - Okemo, New Hampshire's Mount Sunapee, and Colorado's Crested Butte - held with the mountains' landowners, Ski Resort Holdings, LLC, an affiliate of Oz Real Estate. Oz's parent company is New York-based Och-Ziff Capital Management Group, LLC, which Bloomberg describes as "a global, institutional alternative asset manager."
Vail Resorts director of communications Johnna Muscente declined to break out how much of the two sums represented Okemo's share.
With the Triple Peaks assets in its portfolio, Vail Resorts will invest $35 million over the 2018-2020 period, the September announcement said, "to continue to elevate the guest experience" at the three resorts and a fourth ski area acquired separately in August, in Washington state.
All the Triple Peaks ski areas have been added to Vail Resorts' Epic Pass system, which now provides access to 68 winter resorts in the United States, Canada, Europe, Japan and Australia.
The Long Shadow of EB-5
Up north, Jay Peak continues to emerge from the distractions of the EB-5 investment scandal. With Gov. Phil Scott in attendance, the resort cut the ribbon on its Clips and Reels entertainment complex on February 14. The complex includes a 142-seat cinema, climbing walls, and a game arcade that, in the words of the resort's website, "skews toward the virtual reality world."
Jay is also moving into sports competitions in a bigger way. "We are just about a month away from opening two synthetic turf athletic fields so that we can host lacrosse, soccer and field hockey tournaments," JJ Toland reported in a September 6 interview. Toland, the resort's director of communications, events and partnerships, said that one of the main lessons from the opening of Jay's ice arena in 2010 was that "booking sporting events could be a great business extension... It's becoming a multimilliion-dollar contributor to the resort's bottom line."
The athletic fields will join Clips and Reels and a mountain-cottage development as enhancements completed during - and, some might say, in spite of - the receivership in which the resort has found itself since the EB-5 scandal erupted in April 2016. The affair, which involved the fraudulent diversion of millions invested by would-be immigrants, embroiled both Jay and Burke in prolonged and less-than-desirable publicity.
Federally appointed receiver Michael Goldberg retained Minnesota-based Leisure Hotels and Resorts to manage the two ski areas, and proceeded to negotiate settlements, finalized last July, with Ariel Quiros, who owned both resorts, and Bill Stenger, Jay's president. Both Jay and Burke - including both the resort operations and the mountains themselves - are reportedly on the market. Whether the bilked foreign investors get all their money back remains to be seen. Quoted in a February VTDigger story, Goldberg anticipated "a sales process with a lot of rich people and entities." He did not respond to calls from VBM seeking an update.
Mount Snow has also witnessed the vicissitudes of EB-5, with the ski area's owner, Missouri-based Peak Resorts, announcing in May that it would suspend the raising of money through the program, pending regulatory tweaks regarding how much investors have to put into it. Administered by U.S. Citizenship and Immigration Services, the program aims at granting immigrants permanent-resident status in return for job-creating investments.
As of press time those tweaks had not been finalized. In a September 5 interview, Mount Snow spokesman Jamie Storrs said, "We're not fund-raising right now, but we don't really have any comment on the EB-5 program... We do continue it to see it as a positive program."
"We are however going ahead with a currently funded EB-5 program, which is our new $22 million base lodge," he continued. The 42,000-square-foot day lodge, with its eateries and other skier services, will replace a facility built in the 1960s.
"It's a long-overdue upgrade. It's five times the size of the old lodge."
Another already-funded EB-5 project, completed in the fall of 2017, created a storage reservoir that holds 20 million gallons of water for snow-making - six times the resort's former water storage capacity. The $30 million investment, Storrs said, "gave us the most powerful snow-making capacity in the Northeast."
He also reported that preseason sales of passes for 18- to 29-year-olds were up 47 % over last year, making that age group Mount Snow's largest pass-holder demographic.
"This we view as a great win for us." With baby boomers retiring from the slopes, he said, "We really need to be looking at the next generation" of skiers.
Haystack - Down but Not Out, Yet
At Wilmington's Haystack Mountain, part of the members-only Hermitage Club resort, the news is a lot grimmer, as the club's finances teeter on the edge of collapse. News outlets up and down the state are following the story, as lawsuits fly and doubts about Haystack's opening for the upcoming season circulate.
In February, Massachusetts-based Berkshire Bank filed for foreclosure on multiple Hermitage properties after the club fell behind on loan repayments. In March the Vermont Department of Taxes terminated operations at Hermitage after the club failed to make a tax payment.
In July the Brattleboro Reformer reported that Hermitage had agreed on a "nonbinding term sheet" for restructuring with Oz Real Estate - the same as is involved in the Okemo sale.
More recently, a majority of club members who chose to participate in a vote on the question approved a roughly 60% hike in the club's dues as one means of ensuring operations this coming season, according to the Brattleboro Reformer. In a September 10 story, the paper quoted club president Harper Sibley saying that the club was "finalizing terms with the secondary lender on the additional collateral."
Oz is expected to invest more than $50 million in the restructuring, according to the Reformer, but the fate of the deal remained uncertain as of press time. In response to VBM's inquiry, Oz spokesman Kevin Fitzgerald declined to comment, and phone calls placed as recently as October 4 to several Hermitage numbers all elicited recordings saying that the numbers had been disconnected or were no longer in service. An email inquiry sent to Hermitage did not bounce back, but did not receive a reply.
In a September 24 interview, Vermont Department of Taxes commissioner Kaj Samsom said, "Hermitage remains not in good standing for its taxes owed to the state."
According to the town's records, Hermitage owns 24 properties in Wilmington. Town treasurer Christine Richter told VBM on September 19 that the club's corporate entity was current on the majority of its property tax accounts.
"We're all just kind of waiting to see what happens," she said.
The Reformer reported last week that Haystack wants to move forward with its previously proposed condo-hotel. A permit for the 184,000-square-foot, 79-foot-tall, 83-unit hotel with seven duplexes could be used as collateral for the new financing, the Reformer story said.
Elsewhere around the state, numerous infrastructure improvements dominate news in the sector. Stratton Mountain has joined the 35 other destinations honoring the Ikon Pass, which is already valid at Killington and Sugarbush. Stratton is also proceeding this season with a $10 million capital plan, whose centerpiece is a new high-speed quad lift that will cut ascent times from 14 to five minutes. Communications and social media specialist Alexandra Malloy told VBM that the lift would be ready "hopefully before Christmas." Some of the capital investment will also be going towards a set of mountain-biking trails, she said. The southern Vermont resort is meanwhile increasing its conservation area by replanting parts of two ski trails with boreal species.
Denver-based Alterra Mountain Company acquired Stratton in January. The company owns 12 winter sports destinations in five states and three Canadian provinces.
At Killington, a women's slalom and grand slalom competition, part of the FIS World Cup series, will once again highlight the season. The two-day Thanksgiving weekend event, which drew 34,000 spectators last year, will showcase early season conditions at the resort, typically the first in Vermont to open each fall.
Sugarbush has added a water park to its offerings, which already beckon visitors with downhill biking, a golf club, a zipline, and a bungee trampoline, among other things. From Mount Snow to Jay, the Green Mountain State's winter resorts are thus adding a variety of recreational attractions to keep the cash registers jingling even when Mother Nature fails to come through with the white stuff.
Stowe has added "Kid's Adventure Zones" to its allurements. The resort describes the new attractions as "well-signed areas [that] will give kids and families the opportunity to easily access gentle side-country areas and freestyle terrain purpose-built for learning progression."
Over the mountain from Stowe, Smugglers Notch is heading into the season with fresh accolades to boast of. The 2019 SKI Magazine readers' survey gave the resort top honors in the overall satisfaction category for ski areas in the East - indeed, Vermont ski areas took four of the top five slots in that ranking. Among Eastern resorts Smuggs also finished number one for family-friendliness, while Mad River Glen won the prize for most charm and greatest challenge, and Mount Snow took the laurels for best snow. So, as the snow base begins to accumulate, Vermont's ski areas will continue to operate with a strong base of popularity, too.
C.B. Hall is a freelance writer from Southern Vermont.