American Ski Company Sells Killington and Pico (also Steamboat, Mt Snow and Attatash)

[Guest Close Quarterbore]

We were up in Killington last week and we heard up there that there was a lot of talk about a group buying Killington and Pico. It was announced a couple days ago that this sale has been finalized and here is an article that seems to summarize the details:


Salt Lake Tribune - Park City ski firms buy, sell properties

Park City ski firms buy, sell properties
By Mike Gorrell
The Salt Lake Tribune
Salt Lake Tribune
Article Last Updated:

With another big sale Tuesday, American Skiing Co. is now completely out of the Vermont ski market. But another Park City company is in.

Powdr Corp., parent company of Park City Mountain Resort and five other Western ski areas, has teamed with a real estate development firm to buy Killington and Pico resorts from American Skiing for $83.5 million - plus $5 million in debts and other unspecified liabilities.

The transaction was announced just four days after Park City-based American Skiing sold Mount Snow resort in Vermont and Attitash in New Hampshire to Peak Resorts for $73.5 million. Just two months ago, American Skiing began the selling spree by unloading Steamboat resort in northwestern Colorado to industry giant Intrawest ULC for $265 million.

B.J. Fair, American Skiing's president and chief executive, said the $422 million raised from these sales will be used to "repay all bank debt [and] junior subordinated debt," which cumulatively total $305 million, while leaving "substantial resources" to address needs at the company's three remaining resorts - The Canyons outside of Park City, and Sunday River and Sugarloaf/USA in Maine.

"American Skiing Co. is clearly in transition," he added.

For Powdr Corp., which formed a joint venture with SP Land Co. of Killington to own and operate the two separate but adjacent Vermont resorts, "the opportunity to have a toehold in New England was attractive," said spokesman Mark Fischer.

"Killington is the largest ski area in the Northeast in terms of skier days - about 800,000, which is pretty good - so it generates a considerable amount of revenue," he added. "It skis a lot like Park City Mountain Resort. It's spread over seven mountains and has 33 lifts. The fact that it is three hours from Boston and five hours from New York City means it draws a lot of traffic."

Powdr Corp.'s partner, SP Land Co., began acquiring property from American Skiing Co. around Killington in 2004 as part of the latter's restructuring of its real estate debt. Since then, SP Land Co. has worked to develop a "village" around Killington's 1,215 skiable acres.

"The buyer being a large real estate developer and landowner, it made sense to have it all under a single owner," said David Hirosawa, American Skiing's manager of investor relations.

Powdr Corp.'s Fischer declined to say how the $83.5 million purchase price was divided between Powdr Corp. and SP Land Co., describing the Park City company's share only as "substantial."

But he insisted the partnership was a good one.

"SP Land is a land developer. They don't know how to run a ski operation. Powdr is a ski operator. We're both able to concentrate on our core competencies," he said. "The reason that's attractive is that SP Land will help develop the base area, which will drive that much more traffic to Killington/Pico."

Parker Riehle, president of Ski Vermont, the marketing arm of that state's ski industry, said American Skiing's deal was positive news.

"This bodes very well for the direction they want to go with the master plan for Killington Village," he said. "The village buildout will be unrivaled here in the East and will really meet the market demand for the slope-side ski village concept that has been so successful out West."

Hirosawa said American Skiing has ensured the management team that runs both Killington and Pico that it will remain intact through season's end "to provide the service our guests expect."


Role swap in Utah and Vermont


Powdr Corp.
* In acquiring Killington and Pico from American Skiing Co., the company now owns Park City Mountain Resort; Mount Bachelor in Bend, Ore.; Las Vegas Ski and Snowboard Resort; and three California resorts - Alpine Meadows in Tahoe and Boreal Mountain and Soda Springs Mountain resorts at Donner Summit.
* Powdr Corp.'s partner in the Killington deal, SP Land Co., is an affiliate of Ski Partners LLC, which in turn is affiliated with E2M Partners LLC, a private equity firm in Dallas that invests in a diverse portfolio of real estate opportunities.
American Skiing Co.
* Its holdings now are down to The Canyons outside of Park City and Sunday River and Sugarloaf/USA in Maine.
* In the past two months, it has sold Steamboat in Colorado, Attitash in New Hampshire and Mount Snow, Killington and Pico in Vermont.

Personally, I don't see this as a bad deal for Killington as ASC just seemed to lack the resources to keep the SKI areas where they should be (no blowing of snow to keep things open as an example due to costs).

I will be real curious to see the changes over the next few years!

[Guest Close Quarterbore]

From the Boston Globe

Otten's trail may not go cold - The Boston Globe

Otten's trail may not go cold
Despite ASC sales, founder still game
By Tony Chamberlain, Globe Staff | February 22, 2007

About a decade ago, Les Otten, founder of American Skiing Company -- the largest operator of Alpine ski resorts in the country -- related the following nightmare. His holding company had amassed the highly leveraged ownership and operation of nine major resorts, including two of the five largest in the country, various realty subsidiaries, and myriad other business segments.

As ASC's expansion turned westward from New England in 1997, Otten, an amateur pilot, described his experience as "flying an F-16 fighter jet, trying to land it on the deck of a carrier, and realizing that you'd never taken a flying lesson."

If ever a debate raged within the ski industry that didn't center around snowboards or ski length, it was whether Otten and the ASC venture had been beneficial for skiing.

With the announced sale of Killington and Pico Tuesday for $83.5 million -- just four days after the announced sale of Attitash and Mount Snow -- it is still too early to say that the F-16 has crashed on the flight deck. But those who think Otten will not be part of further change in the industry may be in for a surprise.

At its height, the Otten ASC empire consisted of the following properties: Killington, Pico, Mount Snow/Haystack, and Sugarbush in Vermont, Attitash and Mount Cranmore in New Hampshire, Sugarloaf/USA and Sunday River in Maine, Heavenly and Steamboat in Colorado, and The Canyons in Park City, Utah.

The enduring criticism of Otten is the rather impressionistic notion that he pounced on a quaint and picturesque sport, engineered a Wal-Mart-esque growth spurt, and when the original company went bust, left a small army of investors holding the bag.

Even his supporters would have to agree that Otten's company grew too fast from too small a base -- a classic recipe for disaster.

Without getting into an in-depth financial analysis of what happened to ASC during the Otten years, it's worth noting that many of the properties now turning over are selling for about double the purchase price -- proof to ASC president B.J. Fair of the company's sound management practices in the post-Otten years.

So given the value of the properties, it must occur to Otten that the ASC he envisioned is far from a doomed idea. And that's important in light of the hottest rumor in the New England industry: That Otten, who is prepared to disengage from ASC, and former Sugarloaf CEO Warren Cook will partner in an attempt to once again take over Sugarloaf and onetime ASC flagship Sunday River in Bethel -- the two remaining eastern properties in the ASC fold.

For the fairest view of Otten's impact on skiing, we should look at the entire history of his involvement and what he considered most important. Otten was not merely an entrepreneur who chose skiing as an investment, like fast-food franchises. He grew up thoroughly enraptured by the sport. A part-time instructor at Greek Peak while a student at Ithaca College in upstate New York, Otten developed plans for the creation of a small ski area, Danby, in the mountains near the college. Terrain at the proposed ski area was too steep, but Otten got an A in the course, and graduated into Killington's management training program.

But his success story really began in 1972, when he arrived in Bethel to run a backwater ski area called Sunday River which, in its best year, drew about 40,000 visitors. In less than 10 years, it became the second-most popular resort in New England, with a half-million visitors annually. The one-word explanation for the area's success is snow.

From the start, Otten set about developing the most sophisticated snowmaking system in the industry, improving on lessons he learned at Killington. He told a Smithsonian Magazine reporter in 1998 that "Snowmaking has been the single most important component in our success."

The need to market it -- especially in areas around Boston, where "backyard syndrome" is a bane to ski managers -- also seemed obvious to Otten who, in one year of snow drought in the 1980s, shipped truckloads of snow from the Sunday River slopes to Boston Garden, and got the TV cameras to chronicle the event. "Of course it's a publicity stunt," Otten told me at the time, "snow like this needs publicity."

Otten's other most notable contribution grew out of his sense that the faster people could learn to ski, the more they would enjoy the sport and frequent the slopes. In the early 1990s, Sunday River marketed the Perfect Turn Skier Development Program , and midway through that decade, the area invested heavily in the new parabolic skis that did, indeed, give new skiers a shot at learning the sport well enough in a day to want to return.

All of which may be ancient history at this point in the ski industry. And yet with American Skiing Company's recent sale of the New England properties (and the planned sale of Steamboat), the winds of change are certainly still blowing. And two well-known players -- Otten and Cook -- are still looking for a way back in to the ski areas they know well.

[Glitter Brunello Super Moderator Find all posts View Profile Close Glitter Brunello]

ASC has a huge investment in the Canyons, and there is plenty more to be developed; it is going to take a lot of resources. I see no problem with Powdr Corp running Killington, Park City Mountain Resort has some nice features I wish the Canyons would offer, included some limited evening runs and the Signature Five ski/snowboard school program, where kids groups are guaranteed to be no more than 5 kids, even during President's week...