Feds’ new system lets Skico pay less at Ajax | AspenTimes.com

Feds’ new system lets Skico pay less at Ajax

The Aspen Skiing Co. will soon pay lower fees to lease public lands at Buttermilk and Aspen Mountain but will dish out more at Aspen Highlands and Snowmass.

The changes resulted from the U.S. Forest Service’s overhaul of its Byzantine system. The ski industry complained that the old fee system was too complicated and inequitable. Large resort operators often got a better deal on the rent they paid than small operators.

The new, simpler system was put into place in 1996, but had provisions that allow some ski areas to phase it in over five years. The new formula charges fees of between 1.5 percent and 4 percent of revenues for ski businesses on public land.

In general, small resorts are the big winners. However, Aspen Mountain – considered a mid-sized ski area – also benefited, according to Skico attorney Dave Bellack.

The old formula mixed in gross revenues from the Sundeck and the other on-mountain restaurants as well as The Little Nell hotel even though they are located on private property. The new formula excludes revenues from operations on private property, said Bellack.

Aspen Mountain also benefits because few of the ski area’s 675 acres are on public lands. Approximately 85 percent of Ajax is on private property.

Although the new formula will result in lower fees for Aspen Mountain, the old system is still being used. “I don’t know why we haven’t switched yet,” said Bellack.

The new system protects both the feds and ski area operators in cases where fees will change drastically one way or another. It allows the system to be phased in.

The new fee system is already in place for Buttermilk. Under the old formula, the Skico paid $157,065 to lease public lands at Buttermilk in 1995, according to the U.S. Forest Service.

Using the new formula, the Skico paid $130,645 for Buttermilk’s lease in 1998.

The fee changes every year because it depends on revenues from lift ticket sales and ski school lessons. Those revenues hinge on skier and snowboarder visits, which swing drastically from season to season.

For example, the Skico’s customer visits across the four ski areas were down 8.2 percent last season.

Forest Service statistics show the Skico’s lease fee increased at Aspen Highlands under the new formula. The Skico paid $77,781 at Highlands in 1995 and about $5,000 more in 1998.

Bellack said it is his understanding that the Skico will pay a higher fee to lease public lands at Snowmass, the largest local ski area at 3,010 acres.

Figures weren’t available on what Snowmass pays now or how it could be affected by the new formula. The Forest Service’s winter sports administrators at the Aspen District, the White River National Forest office and the regional office in Denver were on vacation Monday.

The Denver Post reported Monday that Vail’s yearly payment to the government rose 13 percent, to $2.6 million, thanks to the new lease fee system. On the other hand, small resorts saw their fees drop by up to 50 percent.

Colorado ski resorts last year paid $10.2 million to lease more than 70,000 acres from the government.

The Associated Press contributed to this report.

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