Public lands provide big benefits to Skico, skiers
December 5, 2011
ASPEN – In the 64 years since it was founded, Aspen Skiing Co. has made a fortune attracting some of the wealthiest people on the planet to some of the best skiing in the world.
It couldn’t have been done without public land.
Skico has special-use permits for 7,778 acres of national forest to help with the operations of its four ski areas. Its private land holdings alone wouldn’t be enough to operate Snowmass, Aspen Mountain, Aspen Highlands and Buttermilk. They are patchwork quilt of ownership, with private land intermingled with public property.
In 2010, Skico paid the U.S. government $1,389,803 to lease that land, according to documents acquired by The Aspen Times from the Forest Service through a Freedom of Information Act request. The fee varies every year, influenced by how successful of a season Skico experienced. In recent years, the most Skico paid was $1,674,555 in 2008, reflecting a record-breaking 2007-08 winter before the recession hit.
Skico leases the most land at Snowmass, so it pays the highest fee there. It leases 4,997 acres at Snowmass and paid $1,067,242 last year.
It leases the least amount of forest land at Aspen Mountain at 326 acres. The fee in 2010 was $34,445.
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At Aspen Highlands, Skico leases 1,620 acres and paid $139,648 last year while at Buttermilk the company leases 835 acres and paid $148,468 in 2010.
Leasing land to Skico and other ski resort operators is one of the biggest moneymakers for the White River National Forest, according to Forest Supervisor Scott Fitzwilliams. He said U.S. taxpayers are getting a good deal.
The money collected from Skico, Vail Resorts and other ski area operators on the forest far exceeds the $650,000 the agency spends annually to oversee the ski areas, according to Fitzwilliams.
“Clearly it’s a benefit for the federal government because much of that money goes to the treasury,” he said.
He noted that the ski industry also foots bills that other industries aren’t required to pay for the use public lands. When a ski area operator proposes a project such as expansion into new terrain, it gets billed for the time government workers spend reviewing the request.
“It is the one resource area [where] every time they make a proposal, we bill them for it,” Fitzwilliams said. “That is not the case for all resource areas at all.” Mining companies and the oil and gas industry aren’t charged the same fees for reviews.
“They pay their way in spades,” Fitzwilliams said of ski areas.
But do they pay enough for the benefits they receive from use of public lands?
The Forest Service uses an extremely complex formula to calculate the fee. It incorporates lift capacity, percentage of public lands, skier visits and revenues from facilities on national forest land, among other factors. It doesn’t take into account the benefits that a ski area operator reaps on private lands from use of adjacent public lands.
For example, The Little Nell Hotel at the base of Aspen Mountain had a net operating income of $5.87 million in 2009, according to tax records. The hotel is on private land yet its value is greatly enhanced because of the Skico’s use of public lands to create the ski area. The Skico doesn’t pay the federal government any fee from the operations of the Little Nell.
Similarly, the Sundeck restaurant on top of Aspen Mountain is on private land, so its revenues don’t factor into the fee the Skico pays to the feds.
Ski area operators take a different view of the fee structure. Skico Senior Vice President David Perry said in addition to the fee, Skico must make investments each year to maintain the forest within its special-use permit area. That includes making drainage improvements to avoid erosion and thinning deadfall. Skico has spent up to $2 million annually for that maintenance, according to Perry.
“We absolutely believe we pay a fair amount for our partnership with the Forest Service,” he said.
In addition, Skico foots the bill for costly improvements it makes to its facilities on national forest lands. The new high-speed, four-passenger chairlift at Tiehack, for example, is $7 million. The new restaurant at Elk Camp, which will open for the 2012-13 season, is $13 million.
Perry believes the public benefits from the Skico’s use of national forest because it inspires more people to enjoy the outdoors and gets them close to nature. That’s a goal Skico shares with the Forest Service.
The White River National Forest receives about 9.2 million visits annually, according to the most recent survey conducted by the Forest Service. The vast majority of visits – roughly 7 million – are from skiers and snowboard riders going to the 12 ski areas on the forest.
“They provide an incredible opportunity that we couldn’t provide,” Fitzwilliams said. “It’s generally a healthy sport. It’s a great way for people to get out and get active.”
Skico logged about 1.3 million visits last winter.
Of all the skiing on national forest lands in the U.S., about 60 percent is done in the White River National Forest, Fitzwilliams noted. Yet, ski areas use only 43,000 acres of the 2.28 million acres of the White River National Forest – less than 2 percent of the lands.
In addition to providing access to outdoors, the use of national forests for skiing fuels the Aspen area’s multi-billion dollar economy. Without use of the federal lands, the ski areas couldn’t operate on the scale they do now, and Aspen wouldn’t have evolved into a tourist mecca.
Even in a recession, tourism is big business. Aspen’s tourist accommodations totaled $19.47 million in business in January 2011. Virtually all of that business was related to skiing. And those travelers spent several more millions of dollars in retail shops and restaurants.
“You’re using a federal asset as an economic driver for the benefit of the American people,” Perry said. “That’s a positive thing and, frankly, if you could figure out how to do that [on a broader scale], it would be even more beneficial for this country.”
Ski areas also come with a cost, for the forests and their communities. Ski areas require roads, power lines, sewage systems and a variety of structures that alter the look of our national forests.
“There’s no question when you make a decision like that, it’s a permanent [effect] on the landscape,” Fitzwilliams said.
Paul Joyce, West Slope director of an environmental organization called Rocky Mountain Wild, said there is a laundry list of environmental impacts caused by Colorado’s ski industry. Protecting wildlife migration corridors is critical, but studies show ski area development has closed off some of the high terrain. Lynx, for example, avoid ski areas all together, according to a Forest Service study, he said.
Climate change makes the highest elevations even more critical for habitat for wildlife. As temperatures warm, that higher-elevation ecosystem is relied on more by a variety of plants and animals.
The development of ski areas also spurs real estate development and sprawl in many high mountain valleys.
Joyce contended that many ski area operators are more concerned about making a buck than easing their environmental impacts. His organization tabulates the Ski Area Citizens’ Coalition scorecard every fall. It assigns a letter grade to each of the ski areas of the Western U.S. based on their ecological practices. The ski areas that score poorest tend to be the ones that are expanding.
Too often, Joyce said, ski areas convince communities that they have to expand to effectively compete or to improve their market share. They are selling a way to make money rather than an outdoor experience.
“That’s what the ski industry sells now: dollar signs,” Joyce said.
The Skico hasn’t expanded beyond its permitted boundaries for some time, so it regularly gets good marks from the Ski Area Citizens’ Coalition. The Skico’s ski areas generally receive the letter grade “A” in the scorecards.
The Skico also stands out for its aggressive lobbying on climate change issues, Joyce said. He finds that somewhat ironic since the Skico owners, the Crown family of Chicago, own shares in several major companies in a variety of industries.
Despite his criticism of the direction of the industry, Joyce feels ski areas do serve a useful purpose. They bring people out to enjoy beautiful, spectacular places. That, in turn, could inspire people to work to preserve wild lands.
“They are a good use of public land, in my opinion,” Joyce said of ski areas. “This is public land. If people feel it should be used for skiing, great.”