Big Burke announcement

[VTKilarney]

The comparison to Ascutney speaks to the management of the mountain and not BMA in any way.

But wasn't Ascutney's downfall based on their real estate debt? I don't see Ary on the hook for $1 million condos or anything like that.

 

[SkiRaceParent]

You yourself. Months ago some were worried that the mountain did not have funds in hand to move ahead with the projects. You said that you knew for a fact that they did have the money in hand. Stenger last week contradicted that.

I don't believe I've ever said that. Can you guide me to that post? Not saying it's impossible I'd just be surprised.

 

[thetrailboss]

But wasn't Ascutney's downfall based on their real estate debt? I don't see Ary on the hook for $1 million condos or anything like that.

No.

Ascutney's latest ownership came in and claimed to be a White Knight to save the place. They were not from the area. The husband was a Wall Street man.

They let their egos take over and burned a lot of bridges with locals and employees.

 

[SkiRaceParent]

SkiRaceParent, is there any risk that the if the Acadmey took the mountain back that they would only run their training hill and close the ski area to the public? That's my nightmare scenario.

I doubt that would ever happen. What would all the families do with all their free time? It would essentially kill the entire feeder and junior program which are becoming more, not less important, as sport and technique specialization at an earlier age matter more than ever in ski racing.

 

[thetrailboss]

I don't believe I've ever said that. Can you guide me to that post? Not saying it's impossible I'd just be surprised.

You are denying that?

 

[SkiRaceParent]

You are denying that?

Show me the post. I don't recall saying that.

 

[thetrailboss]

Here's the thing: there are a lot of mountains who do have visible management/ownership but they don't put their names out there on marketing. Everyone knows that Win Smith owns Sugarbush and he comes in here on occasion. He is out on the front lines. But he does not put his initials on the logo or change the name to "Win's Sugarbush" or anything like that. And, closer to Burke, Bill Stenger is Mr. Jay Peak, but he is not in marketing material or have his name on the logo.

My point with Ascutney was that the owners were not only visible, but were in every single article, had their pictures in brochures, and really put themselves out there. The truth was that the burned a lot of bridges and were not well liked. The mountain failed...in large part because of them. It was about them and not the mountain. People didn't like it.

Same thing out here with Canyons. Talisker has its name all over the place and people hate Talisker and what they do. They associate Canyons with Talisker (when they don't have to do that).

When I went up to the Kingdom twice this past summer I heard from lots of folks, from all different walks of life, that the management/ownership was burning a lot of bridges. Seeing the "Q" only brings those feelings up for many. Now I know that sometimes things have to be changed, that you have to "clean house", and that they are new to running a ski area and are learning. But sometimes it is better to be more behind the curtains as opposed to out in front with everything. And I know it is a business and they can do what they want, but Burke is a community and that means a lot to folks including me.

This is the Ascutney reference.

 

[thetrailboss]

I doubt that would ever happen. What would all the families do with all their free time? It would essentially kill the entire feeder and junior program which are becoming more, not less important, as sport and technique specialization at an earlier age matter more than ever in ski racing.

In 2000 BMA was set to do just this though....run only the training slope if they could not raise the funds.

When they sold the mountain to Lubert-Adler/Ginn, the deal included (1) some money directed specifically to BMA, and (2) some sort of guarantee or commitment that should the mountain fail BMA would take it over. I don't know if the sale to Q had a similar guarantee.

 

[VTKilarney]

I don't know if the sale to Q had a similar guarantee.

I would be downright shocked if it didn't.

To be fair to Ary, skier visits were apparently consistent with last year. This might mean that his imprint did not have the same negative impact that it had for the Ascutney owners. Of course it could also mean that these things take some time and/or that weather and other such factors played a role.

Since I just returned to the skiing scene this year, how did the weather compare to last year - especially during the peak vacation periods?

 

[thetrailboss]

I would be downright shocked if it didn't.

To be fair to Ary, skier visits were apparently consistent with last year. This might mean that his imprint did not have the same negative impact that it had for the Ascutney owners. Of course it could also mean that these things take some time and/or that weather and other such factors played a role.

Since I just returned to the skiing scene this year, how did the weather compare to last year - especially during the peak vacation periods?

Speaking from memory it was a slow start.

 

[VTKilarney]

I guess the real test is to compare Burke's performance to the industry average for this season.

 

[Andrew]

Hey guys, sorry it's been so long since I've jumped back into this thread, but saw the hotel conversation pop up and wanted to drop in. To clarify on the website change, we were purposely vague there because, while things are moving forward, we may not actually start putting shovels in the ground by June 20th. As such, we wanted to take a conservative approach and not put a solid date out there to act as another target. Looking back, we most likely should have gone with 'scheduled to begin Summer 2014' to avoid confusion, and I'll issue a mea culpa there. As it stands the project is slated to get started this summer, with Peak CM ready to roll once the green light is given. From the interest/funding side, Mr. Stenger and Senator Leahy have an upcoming trip to Thailand and Vietnam to meet with investors and they've got a full calendar of appointments set up before they even hit the ground over there, so things are going well.

I imagine this will raise some more questions and I'm happy to answer what I can. If I don't get back in here right away it's because I'm busy going cross-eyed staring at budget spreadsheets, but I will do my best to check in regularly over the next couple days.

 

[VTKilarney]

Andrew,

Thanks so much for responding. You've got my respect.

I've got a couple of questions:
1) Is the hotel fully funded or does more money need to be raised prior to commencement of construction?
2) What was the specific reason for starting this summer rather than this spring?
3) What is left to occur before Peak CM will get the "green light?"
4) If trips are being taken to Thailand and Vietnam, does this indicate a softening of Chinese demand?
5) How do you explain revenue being up if skier visits were flat and there was deep discounting during the second half of the season?
6) Stenger stated that Burke is 25% funded. What does this mean exactly?
7) If construction does not start this summer, is it reasonable to expect the public to place any trust in future statements from management?

 

[xwhaler]

5) How do you explain revenue being up if skier visits were flat and there was deep discounting during the second half of the season?

I can only guess that non-ski ticket revenue was up (food/beverage, maybe ski+stay packages for any condos they own, rentals, lessons, merchandise) and these profit centers helped drive overall ski area revenue up.

 

[thetrailboss]

I can only guess that non-ski ticket revenue was up (food/beverage, maybe ski+stay packages for any condos they own, rentals, lessons, merchandise) and these profit centers helped drive overall ski area revenue up.

Burke does not own any condos...except for the Carriage House.

 

[VTKilarney]

Looking back, we most likely should have gone with 'scheduled to begin Summer 2014' to avoid confusion, and I'll issue a mea culpa there.

Andrew,

Why are you taking the blame for putting "spring, 2014" on the website when, on October 2, 2013, Jay's EB-5 Manager announced the following?:

Construction will begin on the new five-story hotel at Q Burke Mountain Resort in early Spring. Bill Stenger announced that he and his construction team have made a decision to delay ground breaking this Fall to avoid potential weather setbacks. Although the project could have started after the final permits were received in August, they based the decision on their experience with recent winter construction projects at Jay Peak Resort. He predicted that the construction team will make up time during the 2014 construction season. (see: http://jaypeakvermont.org/jay-peak-area-news/nek-eb-5-economic-development-initiative-updates/ )

Surely you shouldn't have put something on the website that was inconsistent with what EB-5 management said.

And if everything was in place last fall, why wait until later this summer to break ground? Is there a strategic reason to increase costs of construction if the most economically efficient time to commence construction is early spring?

 

[VTKilarney]

Apparently Burke forgot to tell Peak CM that construction is starting in the summer. Just yesterday, Peak CM posted this in the "news" section of their website:

09 APRIL 2014 – PEAKCM RELEASED TO BREAKGROUND ON Q BURKE MOUNTAIN RESORT & CONFERENCE CENTER

PeakCM, in partnership with Q Burke Mountain Resort, has been released to start construction on the much anticipated, EB5 funded, flagship Resort Hotel & Conference Center. Starting in Spring 2014, this 180,000 sf project will bring 116 new suites to some of the best skiing in the Northeast Kingdom, and will also incorporate a slopeside restaurant, conference space, ski shops, arcade, coffee shop, a fitness center with outdoor pool and hot tub, and a new bar to highlight après ski festivities. Q Burke Mountain Resort & Conference Center

http://www.peakcm.com/public/news.cfm

 

[VTKilarney]

Andrew,

In your post you said that Peak CM is "ready to roll once the green light is given." Yet the day before you stated this, Peak CM issued a press release indicating that they had been given the green light.

How do you reconcile these two seemingly inconsistent statements?

 

[thetrailboss]

I think we will have to stand-by and see what happens at this point. The next few weeks they will get ready for biking so we will see if the KT rift is healed or not.

 

[from_the_NEK]

Andrew,

Thanks so much for responding. You've got my respect.

I've got a couple of questions:
1) Is the hotel fully funded or does more money need to be raised prior to commencement of construction?
2) What was the specific reason for starting this summer rather than this spring?
3) What is left to occur before Peak CM will get the "green light?"
4) If trips are being taken to Thailand and Vietnam, does this indicate a softening of Chinese demand?
5) How do you explain revenue being up if skier visits were flat and there was deep discounting during the second half of the season?
6) Stenger stated that Burke is 25% funded. What does this mean exactly?
7) If construction does not start this summer, is it reasonable to expect the public to place any trust in future statements from management?

As much as I appreciate upfront honesty from companies, I think you are really reaching if you expect ANY company to answer all of those questions. A lot of the answers would require revealing internal operating info.