Mammoth ski resort sells controlling interest
October 6, 2005
MAMMOTH LAKES, Calif. ” The Mammoth Mountain Ski Area, a longtime winter playground for Southern California residents, says it will sell a controlling interest to a private investment firm.
The $365 million acquisition will be made by Starwood Capital Groups, led by luxury hotel mogul Barry S. Sternlicht. The move is expected to give the resort an upscale character, unlike the raw, unpolished style developed by founder and co-owner Dave McCoy.
The deal will give Starwood 70 percent control and the right to operate 4,000 acres of ski terrain at Mammoth and June mountains and allow for some development. The land itself is owned largely by the U.S. Forest Service, and operators have a 40-year lease that expires in 2024.
McCoy, 90, started the resort about 60 years ago with a rope tow that relied on a truck engine. He and his wife, Roma, became emotional Tuesday as more than 100 pages of deal documents were signed in a Mammoth conference room.
“It’s like selling your heart,” Roma McCoy said. “We practically grew up here. We raised our kids and grandchildren here. There’s never been a man like Dave McCoy and there never will be. Nobody knows what he went through for the mountain.”
Her husband drew a deep breath and said, “Well, we had a lot of fun and a lot of heartbreak.”
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Once the deal is completed and with all the stakeholders, McCoy should get about $80 million. He vowed to keep riding mountain bikes and exploring the area in his off-road vehicle.
The resort’s new owners plan to develop 60 acres around Mammoth Lakes with Canadian resort operator Intrawest Corp.
“The goal is to bring in other hotel brands, a mixture of both boutique and large hotels,” said Marc Perrin, managing director of Starwood Capital. “We’re also focusing on bringing in hip restaurants as well as new residential, hotel and entertainment experiences.”
Mammoth enjoys a great reputation for its skiing and the new deal should help it appeal to visitors who have been drawn to upscale resorts such as Vail and Aspen, said hotel industry analyst Bruce Baltin of PKF Consulting.
Mammoth drew 1.5 million skiers last year and was one of the nation’s three most-visited ski areas.
The transaction is expected to close in 90 days.
In an unrelated development, cross-country ski resort Royal Gorge, which operates on more than 9,000 acres on Donner Summit near Truckee, was sold to a partnership of San Francisco Bay area developers. John Slouber, who helped spawn cross-country ski resorts nationwide with the creation of Royal Gorge in 1971, sold the resort to developers Todd Foster, his cousin, Mark Foster, and Burlingame developer Kirk Syme.
Terms of the deal were not disclosed.