Vail to buy Stowe?

benski · Feb 22, 2017

VTKilarney said:
The problem as I see it is that the right to block the sale was most likely put in there to prevent the sale to an operation that wasn't up to the task of running a ski area. In other words, the state put the provision in to protect its ability to generate revenue pursuant to the lease, but not to renegotiate the terms of the lease.

So yes, technically the state can block the sale to Vail solely for the reason that they want to increase the percentage of sales they get under the lease. But is this moral? I don't think it is. IMHO it's an extortionist tactic and nothing more. And whether or not it is moral, it certainly sends a message to other businesses that the State of Vermont is not to be trusted when it comes to their contractual agreements.

I think its moral. If you have a problem with someone using that trick don't give them the rite in the first place.

VTKilarney · Feb 22, 2017

benski said:
I think its moral. If you have a problem with someone using that trick don't give them the rite in the first place.

You assume that the right was given freely and voluntarily by the ski area operation. I am willing to bet that the state made it an absolute condition in order to access their land.

EPB · Feb 22, 2017

benski said:
I think its moral. If you have a problem with someone using that trick don't give them the rite in the first place.

I don't quite follow. It sounds like AIG gave that away in the 1950's - not Vail.

The lever that Vail could pull wold be to re-negotiate the price with AIG down because it was their fault it got into the agreement in the first place. Walking away or threatening to would always work, too.

The real question is which party benefits from the other more? Vail, or VT?

bushpilot · Feb 22, 2017

My biggest problem with the deal is how Vail will treat the locals. As many have said the local market is not what Vail is concerned with. Although Stowe charges $115 for a day ticket there are a few deals that give locals the chance to ski there. Besides ski club days they also have deals on Woodchuck day and during Vermont vacation week (the week after PD holiday week). Season passes for Lamoille and Washington County residents is deeply discounted. They also participate in the ski and ride with the point program which gives you 50% off a lift ticket on a certain Friday. I don't think Vail will give a flying crap about these programs. The average VT local who is going after these kinds of deals probably isn't going to make a trip out west any time soon. Is it possible some of these programs are required by the land lease?

VTKilarney · Feb 22, 2017

bushpilot said:
Is it possible some of these programs are required by the land lease?

No.

bushpilot · Feb 22, 2017

vtkilarney said:
no.

boooooooo!

bigbob · Feb 22, 2017

benski said:
Not much. The 3-4 lifties at a lift only collectively make $480 a day at 15 dollars an hour. 120 per 8 hour day for janitors, groomers and parking attendants . The rest are uninfected. I think the marginal costs from all of those come out to less then 2 dollars per skier visit assuming those are kept to the minimum necessary avoid lines, filth and ice.

Don't forget the burden costs on top of the $15/hour. SSI, Workers comp, unemployment, etc. Could be another 30%

BenedictGomez · Feb 22, 2017

benski said:
Not much. The 3-4 lifties at a lift only collectively make $480 a day at 15 dollars an hour. 120 per 8 hour day for janitors, groomers and parking attendants . The rest are uninfected. I think the marginal costs from all of those come out to less then 2 dollars per skier visit assuming those are kept to the minimum necessary avoid lines, filth and ice.

Labor is the #1 expense of most businesses, and I'd be willing to bet the ski industry is no different. Virtually everyone you "see" while you're at the hill is making < $15/hour, and Vermont has already seen a big minimum wage increase in recent years, so now you want another 50% increase on top of that, and you dont think businesses will pass that cost onto the consumer? Seriously? Stowe does roughly 325,000 skier visits per year, so....ummmm..... yeah..... that's going to be a lot more than $2 per lift ticket!

And BTW, many people (probably MOST) at mountains making those "low" wages are HAPPY to do so. I was ecstatic to be employed part-time by Stowe Mountain Resort making a pittance so I could be at the mountain, take in that scene, and get a free season pass to perhaps the best mountain east of the Mississippi. I'd say most of the people I worked with felt the same way. You seem to have this delusional idea that most lift workers and ticker counter clerks are there to make that their career and support a family of 5 kids, and that they feel oppressed to boot. Totally and utterly false.

eastern powder baby said:
Except the oil and gas industry. The state did the noble thing a few years ago and banned fracking - despite the fact that there is no evidence any oil exists under Vermont. This really is rich though.

Or any scientific evidence that fracking is harmful. I remember that nonsense though. Such sacrifice!

eastern powder baby said:
It's as if the state aspires to become the first in the union to survive with no business bigger than a mom & pop shop.

In the age of internet shopping, no less.

BenedictGomez · Feb 22, 2017

Jcb890 said:
I don't think people realize the effect of a $15/hour minimum wage. They just see a raise to the lowest common denominator and lose their minds about how great it is.

I think almost 50% of America has a pretty good idea.

That die is cast, however, within 10 years you'll be ordering off tablets at McDonalds and all those "poor" and "oppressed" low-wage counter workers will be out of work. Even worse? They wont have employment on the key lower-rung of the jobs ladder earning key skills and experience with which to slowly rise up on the pay scale.

Then those championing $15 minimum wage will call McDonalds "greedy", LOL.... this too is all too predictable.

benski · Feb 22, 2017

BenedictGomez said:
Labor is the #1 expense of most businesses, and I'd be willing to bet the ski industry is no different. Virtually everyone you "see" while you're at the hill is making < $15/hour, and Vermont has already seen a big minimum wage increase in recent years, so now you want another 50% increase on top of that, and you dont think businesses will pass that cost onto the consumer? Seriously? Stowe does roughly 325,000 skier visits per year, so....ummmm..... yeah..... that's going to be a lot more than $2 per lift ticket!

And BTW, many people (probably MOST) at mountains making those "low" wages are HAPPY to do so. I was ecstatic to be employed part-time by Stowe Mountain Resort making a pittance so I could be at the mountain, take in that scene, and get a free season pass to perhaps the best mountain east of the Mississippi. I'd say most of the people I worked with felt the same way. You seem to have this delusional idea that most lift workers and ticker counter clerks are there to make that their career and support a family of 5 kids, and that they feel oppressed to boot. Totally and utterly false.

Or any scientific evidence that fracking is harmful. I remember that nonsense though. Such sacrifice!

In the age of internet shopping, no less.

Just looking at employees who are hired based on traffic volume. Ski lessons could become much more expensive. Ski patrol and lift ops benefits a lot from economies of scale since it tuff to keep patrollers working and a Lift requires the same employees when 10 people are lapping it as when its at full capacity. Much of the grooming and snowmaking don't seem to change much based on the number of the employees. the three patrollers you need just in case at each peak are not going away becouse there are so few people they will likly not get a call. I am separating fixed costs from marginal costs.
Vermont as the opportunity to make money out of this, Should they not get the best deal for the state. Worst case scenario they keep the status quo which is pretty good. Are you saying Vail Vermont should not use its leverage to keep as much of Stowe's revenue in VT as possible.

machski · Feb 22, 2017

benski said:
Just looking at employees who are hired based on traffic volume. Ski lessons could become much more expensive. Ski patrol and lift ops benefits a lot from economies of scale since it tuff to keep patrollers working and a Lift requires the same employees when 10 people are lapping it as when its at full capacity. Much of the grooming and snowmaking don't seem to change much based on the number of the employees. the three patrollers you need just in case at each peak are not going away becouse there are so few people they will likly not get a call. I am separating fixed costs from marginal costs.
Vermont as the opportunity to make money out of this, Should they not get the best deal for the state. Worst case scenario they keep the status quo which is pretty good. Are you saying Vail Vermont should not use its leverage to keep as much of Stowe's revenue in VT as possible.

Hmm, I always thought you tipped your ski instructor. If that is the norm, then they can be paid a lower wage anyway as a tipped position.

As for patrol, being paid solely by the resort is such an Eastern thing. Ski out west, patrol there usually have to fund raise as they are not solely paid by their resorts. Big Sky's patrol sells some cool T shirts you can only get from them to help support them.

So lots of ways this can go in the east I would imagine as far as pay for different positions on the mountains.

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dlague · Feb 22, 2017

benski said:
Just looking at employees who are hired based on traffic volume. Ski lessons could become much more expensive. Ski patrol and lift ops benefits a lot from economies of scale since it tuff to keep patrollers working and a Lift requires the same employees when 10 people are lapping it as when its at full capacity. Much of the grooming and snowmaking don't seem to change much based on the number of the employees. the three patrollers you need just in case at each peak are not going away becouse there are so few people they will likly not get a call. I am separating fixed costs from marginal costs.
Vermont as the opportunity to make money out of this, Should they not get the best deal for the state. Worst case scenario they keep the status quo which is pretty good. Are you saying Vail Vermont should not use its leverage to keep as much of Stowe's revenue in VT as possible.

The real revenue gain will go to Vail in pass sales and New Englanders who will leverage the pass for trips out west.

cdskier · Feb 22, 2017

So let me get this right benski...you have a company that has entered into a deal to sell their business to another company (voluntarily). And you think the state should stop the deal because the new company *might* not be as good as the old company for the employees? So the result of that would then be a pissed off AIG. How exactly will that benefit the state of VT? VT already gets a percentage of lift ticket sales AND F&B sales at Stowe via the terms of the land lease. Then they get their normal sales tax and food and beverage tax revenue on top of that I would imagine. So if Vail comes in and drives more traffic to the mountain, the state stands to gain more money from increased sales without even thinking about renegotiating the terms of the state forest land lease. Never mind the fact that killing the deal would have serious consequences in the future for any hope VT has of attracting new businesses.

cdskier · Feb 22, 2017

Sugarbush wasted no time in sending out an e-mail referencing the Vail purchase of Stowe...Interesting shots taken at Stowe with respect to the potential crowd issues Epic could cause. I get the impression that Sugarbush is laying the groundwork for making no substantial changes to their pricing strategy (which is what I've been saying I thought they would do).

Dear Chad,
As you have undoubtedly heard, Vail has announced the purchase of the Stowe Mountain Ski operation, while leaving ownership of the Stowe Mountain Lodge, Stowe Mountain Club, Golf Club and real estate development assets with AIG. We have long anticipated that Vail would come East and considered Stowe one of the most likely targets.

We have long respected Stowe as a very well-capitalized and well-run resort, and we have admired the success of Vail under its recent ownership. Vail will clearly bring a number of changes to Stowe, not least of which is their EPIC pass. This pass has changed the landscape in the West and certainly will create some challenges, but also some opportunities, here in the East.

The fact that Vail chose Stowe as its first Eastern acquisition is a great testimony to the skiing and riding here in Northern Vermont, and recognizes that their terrain is commensurate with mountains like Vail and Park City out West. Whether Stowe or the Mad River Valley has better terrain depends on who you talk to - I know where my vote is cast. Personally, I like to think that our terrain is the Eastern equivalent of mountains like Alta, Jackson Hole, Aspen Highlands, Telluride and Squaw, where I have skied in recent years.

Thanks to your support these past fifteen years, I believe that we are extremely well-positioned for the future. Good competition is always welcomed, and Vail will bring that to Vermont. The one thing that they cannot bring to Stowe, however, is the special nature of the Mad River Valley - the nearly 4,000 acres of terrific skiing we have at Sugarbush, and the unique environment of our neighbor, Mad River Glen.

The three roads into the resort (German Flats Rd., Sugarbush Access Rd., and West Hill Rd.) make getting here on a holiday fairly easy. Our new parking lot at Lincoln Peak with shuttle service on weekends and holidays handles the crowds well. And our new Valley House lift has really improved the wait time out of the base area. (Of course, there are hardly ever long lines at Mount Ellen.) With our 16 lifts able to handle 21,000 people per hour and our nearly 4,000 acres of skiable terrain, people are moved all over the mountain when we are 100% open. If the EPIC pass brings more skiers and riders to Stowe, as it likely will, I think everyone will appreciate even more the environment we have here at Sugarbush.

Last week, I wrote to you regarding Gadd Brook Slopeside, and I believe that they, too, will become even more attractive as one compares their value and convenience to other areas. If you or someone you know is in the process of looking for a home at Sugarbush, please let us know. We have just furnished our model unit, and are offering Open Houses every day during Presidents' Week from 1:00 - 4:00 PM. We can also schedule a tour at your convenience by appointment. For more information, please contact the team at Sugarbush Resort Real Estate at 800-806-1070 or chat@sugarbush.com, or stop by the office in The Farmhouse. Heidi and Kyle are available to answer any questions you might have about the new residences. You can also take a look at our Gadd Brook website for more information.

Finally, let me speak about our forecasted conditions. While this has been a year where the hornets have been spot-on, it is also the year of the roller coaster. After receiving over five feet of snow in February and unbelievably good conditions, Mother Nature is acting up again, and we are in for a few days of very warm temperatures and some rain showers. The snow will be nice and soft. We will likely lose some natural terrain, but our snowmaking trails have excellent depth and should hold up well. Winter looks to be returning Saturday night with some very firm skiing on Sunday, and we are likely to see some snow and then perhaps a lot more as we get into March. Going out on a limb, I am betting that we are still in for great spring skiing right through April, and we will continue to enjoy some terrific adventure and camaraderie here at Sugarbush.

Best Regards,
Win Smith

BenedictGomez · Feb 22, 2017

benski said:
Vermont as the opportunity to make money out of this, Should they not get the best deal for the state. Worst case scenario they keep the status quo which is pretty good. Are you saying Vail Vermont should not use its leverage to keep as much of Stowe's revenue in VT as possible.

First of all, scaring the tar out of virtually every private business in the state, is not "good" for Vermont.

Secondly, what you are concurring with is not getting a "good deal" for the State of Vermont, it's thuggery at the point of a bayonet.

Would you feel the same way if your electric company broke a 10 year fixed-rate contract with you and decided to double the cost of your electricity? After all, the electric company should get the "best deal" for itself, right? Somehow I believe you'd be the first person to call that electric company a "big business" that's full of "greed" and _______ (insert anti-business soup du jour term here).

cdskier said:
So let me get this right benski...you have a company that has entered into a deal to sell their business to another company (voluntarily). And you think the state should stop the deal because the new company *might* not be as good as the old company for the employees? So the result of that would then be a pissed off AIG. How exactly will that benefit the state of VT?

Because it moves State of Vermont closer to Communism, and Communism is really WONDERFUL!!! It's just that it's never been done right! LOL

BenedictGomez · Feb 22, 2017

cdskier said:
Sugarbush wasted no time in sending out an e-mail referencing the Vail purchase of Stowe.

Win Smith's prose is dripping with fear.

My favorite part?

The one thing that they cannot bring to Stowe, however, is the special nature of the Mad River Valley

How about no Scott.

No offense, but I'll take the "special nature" of Stowe, Smuggler's Notch, or Jay Peak over Sugarbush. There is literally nothing "special" about the Mad River Valley compared to Stowe from a competitive standpoint. Nothing.

This is like a cute girl trying to compare herself to Kate Upton. No one's getting fooled.

benski · Feb 22, 2017

cdskier said:
So let me get this right benski...you have a company that has entered into a deal to sell their business to another company (voluntarily). And you think the state should stop the deal because the new company *might* not be as good as the old company for the employees? So the result of that would then be a pissed off AIG. How exactly will that benefit the state of VT? VT already gets a percentage of lift ticket sales AND F&B sales at Stowe via the terms of the land lease. Then they get their normal sales tax and food and beverage tax revenue on top of that I would imagine. So if Vail comes in and drives more traffic to the mountain, the state stands to gain more money from increased sales without even thinking about renegotiating the terms of the state forest land lease. Never mind the fact that killing the deal would have serious consequences in the future for any hope VT has of attracting new businesses.

Only since its state land that the state leased under the condition it could approve a change in ownership it is permissible. I think Stowe made a mistake giving the state the write to do this in the first place when they made the deal, and should have asked in writing that there be limits on when this could be used if ever.

benski · Feb 22, 2017

BenedictGomez said:
No offense, but I'll take the "special nature" of Stowe, Smuggler's Notch, or Jay Peak over Sugarbush. There is literally nothing "special" about the Mad River Valley compared to Stowe from a competitive standpoint. Nothing.

This is consistent with there marketing strategy. Hence the slogan is "Be Better Here."

deadheadskier · Feb 22, 2017

Sugarbush will be fine. Rising tide lifts all boats. I read no "fear" in Win's prose at all.

From everything I've heard, the crowding at Stowe this year on weekends has been insane. 40 minutes just to park your car or leave at the end of the day. That's only going to worsen on epic pass.

People can go to Jay or Smuggs, but both have old lift infrastructure and poor snowmaking for lean times. Sugarbush is larger than all other areas in Northern VT and has better lifts and snowmaking than both Jay and Smuggs. It has more diverse restaurants and shopping than Jay or Smuggs as well. That's important to many vacationers.

I think Stowe has the best combination terrain, amenities and snow in the East. It's my favorite without question. That said I'm not spending 40 minutes to try and park my car. If Northern VT was my home ski destination I'd be getting a pass to Sugarbush these days.

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bushpilot · Feb 22, 2017

BenedictGomez said:
This is like a cute girl trying to compare herself to Kate Upton. No one's getting fooled.

Good comparison. I would marry the cute down to earth farm girl in a heartbeat. A super model, not so much.

If you want to be happy for the rest of your life never make a pretty woman your wife.

Say man!

Hey baby!

I skied Sugarbush the other day!

Yeah?

Yeah, an' she's ugly!

Yeah, she's ugly, but she sure can cook, baby!

I like my mountain to cook, baby!

Vail to buy Stowe?

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