Balsams Grand Resort teams up with ski industry legend Les Otten

[thetrailboss]

No, I'm betting against Otten. This project is 10 years old...it's not happening. If it was going to, it would've already. 10 years in development hell is enough of a red flag.

Let alone sky high interest rates.

Yeah, as much as I want to see Coos County and the North Country succeed, every day that passes means less chance of this regime making it. I get that everyone still holds Les in high esteem for what he did, now almost 30 years ago plus, but it is a different time and there is just a lot of history that has already happened. Would any of you put your money at risk with him? Be honest.

Increasingly, this looks like the play is to get this all approved and then cash out by selling to someone with deeper pockets to actually execute.

 

[Andrew B.]

No, I'm betting against Otten. This project is 10 years old...it's not happening. If it was going to, it would've already. 10 years in development hell is enough of a red flag.

Let alone sky high interest rates.

I am not betting either way but I can tell you if the deal is big enough 10 years isn’t that long in the real estate development. It’s been my experience the bigger the project the bigger the tolerance for time and expense.

 

[Newpylong]

I am in full agreement. 10 years is nothing for something this size. Also the permits are a cake walk in NH, so it's no surprise those are in hand before the Benjamins.

The project is risky. I wouldn't bet for or against it.

 

[BodeMiller1]

No, I'm betting against Otten. This project is 10 years old...it's not happening. If it was going to, it would've already. 10 years in development hell is enough of a red flag.

Let alone sky high interest rates.

You can't vote against him for the love all things that do not suck. This place will rival Killington, Sunday River and the others.

If you borrow a lot of money say $250,000 (he may not need that much) and you have a $20 year note at 7%. Then assuming you pay off the loan at the end of the 20 years, the amount of your last payment in real dollars will be much smaller (in real dollars) than now. That's how these guys do it. Meow

The State of New Hampshire has guaranteed the loans. So he'll get a decent rate to begin with.

A couple of good snow years when they open the slopes and he's good.

 

[x10003q]

You can't vote against him for the love all things that do not suck. This place will rival Killington, Sunday River and the others.

If you borrow a lot of money say $250,000 (he may not need that much) and you have a $20 year note at 7%. Then assuming you pay off the loan at the end of the 20 years, the amount of your last payment in real dollars will be much smaller (in real dollars) than now. That's how these guys do it. Meow

The State of New Hampshire has guaranteed the loans. So he'll get a decent rate to begin with.

A couple of good snow years when they open the slopes and he's good.

I am not sure why you think The Balsams' loans will be guaranteed by the State of NH.

Coos County is issuing the loans and has created a special assessment district to repay the loans. Coos County is not guaranteeing the loans.

"The bonds are structured so the county is not responsible for debt service and principal and interest, said Oglesby.

‘In the event the assessments collected in the district are insufficient, that’s it,’ he said. ‘There’s no other recourse for the investors. It’s not a general obligation of the county as you would see with municipal bonds … If the project for some reason doesn’t work out and there’s a default situation, the county is not on the hook to pay the debt service of the bonds.’"

As for the interest rate - this was from Feb 20,2023:
"The interest rate is assumed to be 9 percent (a risk to the developer, including if rates decline and cannot be refinanced, he said) and the bonds are taxable to allow greater flexibility to use the bond proceeds, said Oglesby."

The interest rates for borrowing are higher today than they were Feb, 2023.

CONSULTANT OUTLINES PROPOSED BALSAMS FINANCING PLAN, RISKS TO COUNTY

February 20, 2023 By Robert Blechl Appearing in the Caledonian Record Lancaster, NH “During a joint meeting of the Coos County Commission and Delegation in Lancaster on Friday, the municipal …

thebalsamsresort.com

 

[BodeMiller1]

I am not sure why you think The Balsams' loans will be guaranteed by the State of NH.

Coos County is issuing the loans and has created a special assessment district to repay the loans. Coos County is not guaranteeing the loans.

"The bonds are structured so the county is not responsible for debt service and principal and interest, said Oglesby.

‘In the event the assessments collected in the district are insufficient, that’s it,’ he said. ‘There’s no other recourse for the investors. It’s not a general obligation of the county as you would see with municipal bonds … If the project for some reason doesn’t work out and there’s a default situation, the county is not on the hook to pay the debt service of the bonds.’"

As for the interest rate - this was from Feb 20,2023:
"The interest rate is assumed to be 9 percent (a risk to the developer, including if rates decline and cannot be refinanced, he said) and the bonds are taxable to allow greater flexibility to use the bond proceeds, said Oglesby."

The interest rates for borrowing are higher today than they were Feb, 2023.

CONSULTANT OUTLINES PROPOSED BALSAMS FINANCING PLAN, RISKS TO COUNTY

February 20, 2023 By Robert Blechl Appearing in the Caledonian Record Lancaster, NH “During a joint meeting of the Coos County Commission and Delegation in Lancaster on Friday, the municipal …

thebalsamsresort.com

I don't think that. I don't even think he needs the gurantee. So he's writting corporate papper. Otten has a track record of pulling off big things. A sprawling ski area is kind of what he does. Anyone know if he still owns The Phonix at Sunday River?

Look how high up the new pods are. He'll most likely be open 10 months of the year.

 

[thetrailboss]

I don't think that. I don't even think he needs the gurantee.

Read your own post. You said that the State had guaranteed the loans.

The State of New Hampshire has guaranteed the loans. So he'll get a decent rate to begin with.

 

[BodeMiller1]

Read your own post. You said that the State had guaranteed the loans.

I'm not concerned enough to follow every point. Les was trying to get the state to guarantee the loans, so now it's the county? So according to similar matrixes Forbes uses to measure wealth Les is worth around $7,000,000.00 I'd think it would be far greater. However, he probably has trusts, foundations and those kinds of things. He's not Bill Gates nor Elon Musk, but he's a (in my book) better entrepreneur. He doesn't just convert his dreams in to profitable cost centers, he does it very well in tough businesses (skiing, resorts (condos), biofuel (wood pellets) and The Boston Red Sox.

So even if no government entity will guarantee the loans or bonds; so what. It will just take him a littler longer. If he builds it they will come.

 

[thetrailboss]

I'm not concerned enough to follow every point.

Yeah, trying to make sense is so overrated.

 

[Edd]

Yeah, trying to make sense is so overrated.

Indeed, gibberish is preferred always.

 

[Andrew B.]

I am trying to understand if your love affair with LBO is real or sarcasm? Very few people have the kind of clout your talking about.

 

[2Planker]

Have known Les for almost 40 years.
Good guy w/ a passion for building things that no one says he can

Will see him Thursday night for our card game. I'm sure he'll give us the low down on what's happened over the last 3-4 months.

Already told him I'd be happy to run his Patrol....

 

[Former Sunday Rivah Rat]

Have known Les for almost 40 years.
Good guy w/ a passion for building things that no one says he can

Will see him Thursday night for our card game. I'm sure he'll give us the low down on what's happened over the last 3-4 months.

Already told him I'd be happy to run his Patrol....

Can you ask him if he's waiting for rates to come down to do the bond offering? Or is Goldman Sachs postponing it due to market conditions?

 

[BodeMiller1]

Yeah, as much as I want to see Coos County and the North Country succeed, every day that passes means less chance of this regime making it. I get that everyone still holds Les in high esteem for what he did, now almost 30 years ago plus, but it is a different time and there is just a lot of history that has already happened. Would any of you put your money at risk with him? Be honest.

Increasingly, this looks like the play is to get this all approved and then cash out by selling to someone with deeper pockets to actually execute.

He does go in and out of companies. I heard the auction to clean out the hotel was cool. Lots of old toys of the rich.

 

[2Planker]

He does go in and out of companies. I heard the auction to clean out the hotel was cool. Lots of old toys of the rich.

It was a good time BUT it was 11 years ago...
We got a lift chair, 8 carved mahogany chairs from the bar, and the poker table

 

[thetrailboss]

More Balsams, Les Otten - Ski Area Management

Les Otten nears the starting line on his ambitious plan to revive a historic ski area and resort deep in New Hampshire's Great North Woods. Skepticism about the prospects of Les Otten’s $310 million plan to transform the historic Balsams resort in New Hampshire’s Dixville Notch into a sprawling...

www.saminfo.com

 

[1dog]

More Balsams, Les Otten - Ski Area Management

Les Otten nears the starting line on his ambitious plan to revive a historic ski area and resort deep in New Hampshire's Great North Woods. Skepticism about the prospects of Les Otten’s $310 million plan to transform the historic Balsams resort in New Hampshire’s Dixville Notch into a sprawling...

www.saminfo.com

Who knows, but the tree skiing could be fantastic for a few reasons - mostly appears to be evergreens- hold snow longer - and yeah tighter and lower boughs that need pruning- but it won't be an experts destination - so like most off-piste tree-skiing in the 90's- it will be empty.

Only in NH - no other eastern state would have a chance given environmental pushback.

20% chance. Nothing more. If money stays this expensive, less chance.

 

[thetrailboss]

There are some real gems in terms of quotes....

“The permitting process has been horrendous,” he says. “We lost three years to the pandemic, and the financial markets are not kind to new resort development,” he adds, admitting, “If I knew I’d spend the last eight years working at this level, I wouldn’t have done it.”

True.

“We have a reasonable expectation that the funding can come together later this summer or early fall,” says Otten. “Half of the money is totally locked down, and the rest is in negotiation from a number of different sources.”

It is now later summer and almost fall. No progress.

“Because of our location, elevation, and natural snow, we can produce snow equal to Western skiing,” says Otten. “We’re going to invest in a level of tech that we think will give us an advantage.

I seem to recall that Oz was going to be the next best thing to "Western skiing". whatever the hell that means. We've heard this before. Yes, it is north, but Sugarloaf is as well and they get bad weather as well.

“It was good I left the industry,” says Otten. “My long-term plan was to get into baseball,” which he did almost immediately after departing American Skiing Co.

Riiiggghhhttt. Because ASC was obviously in the perfect place for you to leave.

“Recreation is a noble profession. This will be the most important thing to happen to the North Country when it happens. The Balsams is an excellent piece of property that just requires patience, and that’s what I have.”

Wow, give me a break. Someone thinks too highly of himself.

 

[Newpylong]

IMHO I think he has every right to think highly of himself. The ski areas that he touched would be far worse off today without his involvement.

I loathe some of the boneheaded decisions made during the ASC era, but it's hard to deny Vail is doing exactly what he set out to do minus the real estate (much of which is already in place due to ASC).

His heart was in the right place, just executed poorly.

 

[thetrailboss]

His heart was in the right place, just executed poorly.

In some ways, I can agree but I think that the end of his time at ASC was "complicated".

In Karen Lorentz's Killington book, she interviewed Les in like 2006 or 2007. He spoke pretty frankly about the impact of going public and losing control over a lot of decisions. He also talked about how bullish some of the larger institutional investors could be and how the timeline for a return was unreasonable. We all know that Wall Street investors can be very fickle. So I think he does legitimately get consideration for those points.

As to his "noble" comment, sure he can be rightfully proud of his accomplishments. I just felt it was odd to say.

I generally stand by some of my admittedly joking criticism of the other points. His "end of summer/fall" comment I translate to mean maybe early 2024 or so if not later.