President proposes shakeup of S’mass resort association
The new president of the Snowmass Village Resort Association is researching an $8 million restructuring of the organization’s debt.
Jim France told the SVRA board of governors on Monday that the organization needed to be more aggressive in reaching its target market, that the resort’s conference facility was lacking and that it needed a way out of its existing debt load. The restructuring would allow for $1 million in new television advertising and other initiatives
“We need to adjust the entire cash flow basis,” said France, who has replaced Terry Hunt as the president of SVRA, which manages the conference center, runs Snowmass Central Reservations and markets the resort.
He also told the board that the organization was using next year’s assessments to pay off this year’s debts.
“This company is bankrupt, virtually,” he said. “We are spending the wrong year’s money.”
The SVRA’s revenues come in part from assessments, which are similar to sales and property taxes and are levied on retail, restaurants and lodges in the slopeside section of the town. Last year, it collected $3.7 million in assessments, had a total of $9.1 million in revenues and had a net loss of $600,000.
France, who has been on the job six weeks and has been studying the status of the organization, pushed for $1 million to be spent on a highly-targeted cable TV ad campaign aired in key markets to drive business to Snowmass.
“We don’t have any advertising,” he said. “We have collateral and some newspaper ads. It’s not a coordinated plan.”
And France said that the conference center needs at least $500,000 in refurbishing for everything from technology connections to new carpet.
“I just got back from a conference facility that makes this place look like a shack,” he said.
He also reported that $277,000 should be spent on computer hardware, software and phone upgrades, and that the organization needs a $1.3 million line of credit.
To get out from four more years of $800,000 annual debt service on the $3.1 million conference center debt, and to retire $1.1 million in current loans, France suggested a long-term refinancing plan that would require $300,000 in annual debt service on a $5 million loan.
And to get access to more funds for his to-do list, France suggested setting up a working cash management account that requires the organization to have a set financial reserve each year.
“It’s a calculated business risk,” France told the board.
But Stan Kritzik, a property owner who sits on the SVRA board, voted against the concept, saying he wanted more information.
“I have significant problems if we are borrowing to pay for operating expenses,” said Kritzik. “That’s the road to ruin.”
But other board members said that France should proceed with an investigation of the possibilities.
Kritzik also raised the point that SVRA told its members that assessments were likely to drop once the debt on the conference center was paid off. Under France’s proposal, that might not happen.
“A clear schedule of reduction of assessments was given to the membership,” said Robert Sinko, who owns a condo at the Crestwood. “It just needs to be explained.”
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