Will Melton: Do we really need another ski resort?
November 25, 2009
The new resort, carved out of the Bitterroot Mountains, would have been closer to town, but creditors began closing in and the word “foreclosure” hit the papers. Even though I’m a rabid skier, I wasn’t sorry to see the Bitterroot Resort fail. Though developer Tom Maclay spent more than a decade and millions of dollars planning the resort, it suffered from a fatal flaw: It made no sense, at least for skiers.
The layout for the ski slopes, on what was touted as the tallest ski area in North America, showed how little thought had been given to the actual skiing itself. For example: After a short section of drops coming directly off the summit, a skier would be forced to traverse nearly four miles to get to any other expert runs.
And although it promised to approach Colorado’s Vail in providing skiable acreage, Bitterroot Resort was designed mostly for beginner and intermediate skiing. This would surely prove boring to families with multiple ski levels and turn off expert skiers. Bitterroot Resort’s grand plan lacked another essential element: Snow. Nearby Lolo Peak rarely lacks snow, but the ski runs that developers had already cut through foothills remained bare and brown most of last winter.
Some resorts prove that great snow can make up for mediocre terrain – think Steamboat Springs in Colorado. And great terrain can make up for mediocre snow – look at Crested Butte in western Colorado. But a resort lacking both terrain and great snow is going to fail pretty much anywhere.
Of course, Bitterroot Resort is only the most recent of high profile, ski-area collapses. Only four new ski areas have opened in the United States in the past 20 years: The Yellowstone Club and Moonlight Basin in Big Sky, Mont.; Tamarack Resort in central Idaho; and Silverton Mountain in southwestern Colorado. Only Silverton was designed primarily for skiers, and only Silverton has avoided bankruptcy. Until the mid-’90s, ski resorts were almost always created for skiers. Real estate was still big business, but developers built ski areas only where they made sense in terms of quality skiing. Then developers got greedy and saw the avalanche of money that could be made from selling second homes. Four-season resorts, where homeowners could ski in winter and golf, hike and bike in summer, became the way to cash in.
Developers bet heavily on rising real estate prices, and the gamble worked for about five years. In that time, developers’ dreams grew even more grandiose as they borrowed more and more money to build master-planned communities around the bases of new ski resorts.
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Last year, the bubble burst. Developers who’d been riding high months earlier face-planted and found themselves with a mountain of half-built houses. The developers’ business model depended on rich people buying million-dollar mini-mansions they might use for, maybe, two months a year. Without a constant influx of capital from the sale of homes, resort developers defaulted on their loans. Creditors, realizing they wouldn’t get paid back, started foreclosing. Ultimately, the Big Three toppled.
The Yellowstone Club resort is now owned by a new investor, who bought it for dimes on the dollar. Tamarack Resort is owned by creditors and may not open for skiing this year. Moonlight Basin declared bankruptcy in mid-November to avoid a takeover by Lehman Bros. The Yellowstone Club won’t close anytime soon, however: The gated resort for the mega-rich will continue to operate as long as its homes are owned by the likes of Bill Gates, Dan Quayle and Warren Miller. Likewise, Moonlight will probably survive in some form, simply because the resort, in addition to building real estate, has built one heck of a ski area. Its proximity to Big Sky Resort doesn’t hurt either, drawing skiers to what’s marketed as “The Biggest Skiing in America.”
Tamarack is skating on thin ice, however, as it never really had the support of the locals. It’s too far from Boise, the nearest mid-sized city, to draw many day skiers, and it lacks particularly good skiing. Tamarack may be doomed.
Meanwhile, the remote town of Silverton, with its one lift, keeps plugging away, buoyed by a legion of devoted extreme skiers, minimal operating expenses and little borrowed capital.
Silverton even added infrastructure this year – a 50-foot bus. It replaces the old UPS truck that used to shuttle skiers. Might there be a lesson here?