ASC considers sale of Maine resorts

[Greg]

ASC considers sale of Maine resorts:

http://timesargus.com/apps/pbcs.dll/article?AID=/20070311/BUSINESS/703110337/1006/BUSINESS

 

[tcharron]

ASC considers sale of Maine resorts:

http://timesargus.com/apps/pbcs.dll/article?AID=/20070311/BUSINESS/703110337/1006/BUSINESS

Doesn't really suprise me. Seems like they just getting out while the getting is good.

 

[Skier75]

Geez, this is really too bad. Now what? We really enjoyed buying the ASC passes. Now what are gonna do?

 

[ski_resort_observer]

This is actually pretty old news....sometimes the Times Argus is a little slow on the uptake. The prevailing rumor is basically LBO and former Sugarloaf Pres Warren Cook are buying the two resorts, either together or individually. They have till April 30th to seal the deal.

 

[klrskiah]

lots of rumors for the last few weeks, Les is negotiating to buy back sunday river that is a definate, whether or not he can come up with the $$$ is another matter, latest rumor is that LL bean also is bidding but don't know how credible that rumor is... we will see!

 

[drjeff]

The rumor around Park City last week was that the deal was 98% done, just basically a few minor details left to workout and that a press release announcing the sale should be out in the next week or two. In talking with a person who has extensive business interests with ASC(a non ASC employee), the SR/SL folks better hope that the deal gets done, or else even with all the sales ASC has done, the majority of any changes in their yearly capital expenditures will all be at The Canyons, so SR/SL would if still an ASC property would still see improvements as have been done in the last few years (read as a new coat of paint in the bathrooms ).

The person I was speaking with said that ASC is planning on sinking around 60 Million into The Canyons over the next 2 seasons, including the construction of 2 new on mountain day lodges (at the Tombstone base and Dreamscape base), a significant new additionally main base area lift heading from basically behind the Sundial Lodge up to the Tombstone base area (They've had this earmarked for a Gondola on the master plan and have contractual obligations with multiple base area developers for this lift, financail limitations may see this lift as a high speed quad or 6 pack though), as well as the continued expansion South past the new Dreamcatcher area towards Park City Mountain resort (the developer of the mega mansion Colony developement is looking to release a new phase of lots in this new area and ski/in ski/out access is a selling point and there are once again contractual obligations). Additionally, I was told that the essentially all of the walkways in the main base area shops are scheduled to be ripped up and basically replaced with heated walkways (the exact quote I was told was so it "would be like the Vail village"). Additionally the upgrading of some of the original lifts that went in as fixed grippers to high speed is likely too (Dreamscape is apparently 1st on the upgrade list).

They're currently doing a ton of new base area construction there, with by my count atleast 6 major housing projects in various stages of active completion going on, and 3 tower cranes moving alot of materials around right now. Basically, as soon as the "All 4 One" becomes the "All for NONE" the better for eastern skiing.

 

[ski_resort_observer]

DrJeff- I was doing some research this morning but found some data missing. I have a feeling you might remember this.

I seem to remember that when the Sundial Lodge went on the market it presold in less than a day but when it came to the Westgate complex pretty much the complete opposite happened. Can you help my memory out?

 

[drjeff]

DrJeff- I was doing some research this morning but found some data missing. I have a feeling you might remember this.

I seem to remember that when the Sundial Lodge went on the market it presold in less than a day but when it came to the Westgate complex pretty much the complete opposite happened. Can you help my memory out?

Yes and no. Sundial sold out (whole ownership) in something like 4 hours (definately less than a day). ASC, sold off the piece of land that The Westgate is on (along with the guarentee that Westgate would purchase something like 200,000 lift tickets over the following I believe 3 seasons. This was to generate some short term capital for ASC for either interest payments or quick capital access, thats why they got that prime piece of real estate! The first 2 phases of Westgate, now completed are a true timeshare and are sold out. Westgate is currently, building phases 3 and 4 which will be a mix of whole-ownership (starting at $600,000, Plus roughly $1000 a month in fees) and true timeshare rooms (a ski week, 2 bedroom is going for roughly $50,000 now). When I was talking with the Westgate owner representatives last week (they're actually very good at implementing owner suggestions, and have done a great job at maintaining the rooms (I was actually the 2nd person to stay in one of the original rooms back the week after the 2002 olympic games, so I saw the place brand new(literally still had a few wet paint signs), and the Spa there opened its doors during my first visit there). The sales they're doing there now for new ownership are for building 3 and 4, and some occasional resales of isolated unit weeks in buildings 1 + 2. I will also say that as an owner, Westgate has been very fair to deal with. When my wife and I bought it was just the 2 of us, so we bought a 1 bedroom. Well, add in a couple of kids, and we saw the need for the 2nd bedroom. Westgate gave us full equity credit, and honored the original 2 bedroom listing price since we upgraded within 5 years of original purchase. Plus as a whole, Westgate as a development company is doing quite well and have diversified there timeshare locations quite well, from Florida(the home base, 1st property just outside the West Gate of Disney World - hence the name) to the Smokey mountains, Branson, Missouri, AZ, and now building a BIG timeshare/whole ownership place on The Strip in Vegas.

Some of the perceived difficulties they've had at The canyons has had more to do with ASC than Westgate issues (one of the reasons why initially it was Westgate at The Canyons and is now known as The Westgate Park City). The owner rep I was talking to(and have talked with the same person each of the 5 times I've been back since I bought there), had a great quote when talking about dealing with ASC, " They promise you a steak dinner, but serve you dog food!"

 

[ski_resort_observer]

Thanks!

 

[Geoff]

DrJeff- I was doing some research this morning but found some data missing. I have a feeling you might remember this.

I seem to remember that when the Sundial Lodge went on the market it presold in less than a day but when it came to the Westgate complex pretty much the complete opposite happened. Can you help my memory out?

More importantly in the history of the ASC debacle, the Grand Summit at The Canyons did not sell well and much of their quartershare inventory was dumped at auction. The combination of the debacles at The Canyons, Steamboat, and Attitash were the kiss of death for ASC. The Otten business plan was to have real estate profits pay down the debt used to purchase all the resorts. It turned out that the real estate sales couldn't even pay back the real estate development loans.

Sundial sold out immediately because it was underpriced. Another ASC debacle. I've heard from a former ASC VP that Sundial wasn't profitable, either.

 

[drjeff]

More importantly in the history of the ASC debacle, the Grand Summit at The Canyons did not sell well and much of their quartershare inventory was dumped at auction. The combination of the debacles at The Canyons, Steamboat, and Attitash were the kiss of death for ASC. The Otten business plan was to have real estate profits pay down the debt used to purchase all the resorts. It turned out that the real estate sales couldn't even pay back the real estate development loans.

Sundial sold out immediately because it was underpriced. Another ASC debacle. I've heard from a former ASC VP that Sundial wasn't profitable, either.

If I remember correctly, a 2 bedroom unit at Sundial sold for somewhere in the neighborhood of $350,000 when they were released for sale, comparable units in the greater P.C. area at that time were in the 450,000-500,000 range. Not a bad place either. I actually stayed in a unit in Sundial before I bought at Westagte, very similiar size/emmenities in the units, decent sized kitchen, granite counter tops, leather couches, decent sized TV's, balcony, etc.

New whole ownership units available for sale in The Canyons base area of similiar size, with a few more ammenities (spa in building, etc) are now going for $600,000 - $1,000,000 depending on location, size, etc.