Jay Peak bombshell

crystalmountainskier · Jun 26, 2022

On Stuart's podcast Rusty Gregory used the word unusual to describe Jay. He essentially said Alterra is not interested in running the water park and softball tournament businesses.

Smellytele · Jun 26, 2022

Softball? Or hockey?

fbrissette · Jun 26, 2022

Smellytele said:
Softball? Or hockey?

Hockey and soccer tournaments. Although I guess you could play softball on the two soccer fields they built.

crystalmountainskier · Jun 27, 2022

Rusty said Softball.

fbrissette · Jun 27, 2022

crystalmountainskier said:
Rusty said Softball.

Rusty should do his homework better then. This is obviously not my field, but I compeltely fail to see how running a waterpark (and whatever tournaments) would be a problem, Isn't profitability the only issue ?

Tremblant runs ziplines, summer sleds, a mini-golf and a shitload of other activities, and I believe the resort is actually more profitable in the summer than in winter. I fail to see Rusty's logic.

crystalmountainskier · Jun 27, 2022

fbrissette said:
Rusty should do his homework better then. This is obviously not my field, but I compeltely fail to see how running a waterpark (and whatever tournaments) would be a problem, Isn't profitability the only issue ?

Tremblant runs ziplines, summer sleds, a mini-golf and a shitload of other activities, and I believe the resort is actually more profitable in the summer than in winter. I fail to see Rusty's logic.

The fact no one has bought Burke or Jay for multiple years suggest profitability is also an issue.

fbrissette · Jun 27, 2022

crystalmountainskier said:
The fact no one has bought Burke or Jay for multiple years suggest profitability is also an issue.

My understanding is that profitability (at least for Jay Peak) is not as much the issue as the Generla Receiver's expected sales price.

crank · Jun 27, 2022

Goldberg said something a few years back to the effect that Burke had a ways to go and needed to become profitable in order to pay EB5 investors before a sale.

Burke becoming profitable? How does that happen?

I figure there are probably no major players really interested in Jay. None of them move this slowly.

Tin Woodsman · Jun 27, 2022

fbrissette said:
Rusty should do his homework better then. This is obviously not my field, but I compeltely fail to see how running a waterpark (and whatever tournaments) would be a problem, Isn't profitability the only issue ?

Tremblant runs ziplines, summer sleds, a mini-golf and a shitload of other activities, and I believe the resort is actually more profitable in the summer than in winter. I fail to see Rusty's logic.

I would argue that all of those Tremblant activities are pretty much par for the course for summer ops in the ski industry. All things that Alterra has experience running. The waterpark and hockey/soccer tournament business is a pretty big step outside/beyond that, and I have no concerns with them defining their business model/expertise in a way that excludes those businesses. Depending on who buys Jay, there is still a decent chance it winds up on the IKON pass anyway, so they could potentially have their cake and eat it too.

ss20 · Jun 27, 2022

crank said:
Goldberg said something a few years back to the effect that Burke had a ways to go and needed to become profitable in order to pay EB5 investors before a sale.

Burke becoming profitable? How does that happen?

I figure there are probably no major players really interested in Jay. None of them move this slowly.

I'd bet if the lower quad at Burke was a fixed grip that'd help the bottom line. The resort operates too few of days and sees too few skier visits to warrant 2 hsq's. And of course, that abomination of a hotel must lose money 90% of the year.

Jay needs a lot of work for the on-mountain infrastructure that doesn't see a huge ROI. The tram is a money sink. The Bonnie needs to be a 6pack. Snowmaking needs improvement. I wouldn't touch it either, especially since Vail and Alterra already have a good chunk of the Northeast in their portfolios.

KustyTheKlown · Jun 27, 2022

is it an abomination bc they spent a lot of bamboozled money on a hotel that was bound to mostly sit empty? or is it shitty inside? it looks nice from the outside.

ss20 · Jun 28, 2022

KustyTheKlown said:
is it an abomination bc they spent a lot of bamboozled money on a hotel that was bound to mostly sit empty? or is it shitty inside? it looks nice from the outside.

Sits empty.

urungus · Jun 28, 2022

JoeB-Z said:
This is from last October but it explains the sales process the receiver is taking. The receiver's fees have mounted to $10M. Of course he has squeezed a lot of money out of the entangled other than the sale of the resorts.

There appears to be no end to people enriching themselves from this. How many more years until the receivers fees exceed the eventual sale price, LOL

drjeff · Jun 28, 2022

KustyTheKlown said:
is it an abomination bc they spent a lot of bamboozled money on a hotel that was bound to mostly sit empty? or is it shitty inside? it looks nice from the outside.

Is it Fourseaons/Ritz Carlton nice inside? Nope. Is It a well above average hotel compared to the offerings across the majority of Northeast ski country? From the couple of times I have stayed there when my kids had races at Burke, yes.

Plus the view out the windows from the dining area on a clear day of the Willoughby (?sp) Gap in the distance is impressive. Would make for a nice location for a wedding reception for sure

crank · Jun 28, 2022

We spent a few days/nights there when they first opened. They were running a very low priced promotional rate and it was the week between Christmas and NYE. And we got a foot of fresh snow so all was good!

Nice place. Only complaint we had was a weird one. The patio area in back was heated so no ice, except for the ramp up to the hot tub where there was a freaking treacherous, slippery AF, inclined walkway that had us death gripping the railing.

I have since checked back a few times looking for another sweet deal but high prices abound. Anyways, nowadays I feel obligated to get as much bang as possible out of my Ikon pass.

KustyTheKlown · Jun 28, 2022

yea, i love how it frames willoughby gap, but i haven't stayed there myself. generally cheaping it up in lyndon when I'm in the area.

machski · Jun 28, 2022

ss20 said:
I'd bet if the lower quad at Burke was a fixed grip that'd help the bottom line. The resort operates too few of days and sees too few skier visits to warrant 2 hsq's. And of course, that abomination of a hotel must lose money 90% of the year.

Jay needs a lot of work for the on-mountain infrastructure that doesn't see a huge ROI. The tram is a money sink. The Bonnie needs to be a 6pack. Snowmaking needs improvement. I wouldn't touch it either, especially since Vail and Alterra already have a good chunk of the Northeast in their portfolios.

The problem with your idea is the lower HSQ makes for an outstanding learning pod as is. Sure they might save some on operations, but that is the older of the two HSQs and likely has been almost amortized out. Why would they sink more capital into a new FGQ prior to a sale? That doesn't make any accounting sense, especially to downgrade am asset.

ss20 · Jun 28, 2022

machski said:
The problem with your idea is the lower HSQ makes for an outstanding learning pod as is. Sure they might save some on operations, but that is the older of the two HSQs and likely has been almost amortized out. Why would they sink more capital into a new FGQ prior to a sale? That doesn't make any accounting sense, especially to downgrade am asset.

Not saying they would take it out, but it was overkill when they put it in, JMO. It's a super short ride. And as you know the maintenance costs are many multiples more than that of a FGQ and a lifespan of half a FGQ.

thetrailboss · Jun 28, 2022

Tonyr said:
Good to know, the Fed doesn't usually hold distressed assets very long.

In this case it has been six years. Seems like a long time.

machski · Jun 28, 2022

ss20 said:
Not saying they would take it out, but it was overkill when they put it in, JMO. It's a super short ride. And as you know the maintenance costs are many multiples more than that of a FGQ and a lifespan of half a FGQ.

Don't disagree then, however carpet loading chairs weren't really a thing yet for FG when this particular HSQ went in. Was a bit weird with a HSQ there and just FG serving the main mountain for sure.

Jay Peak bombshell

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