Cannon lift out to bid

[threecy]

Examples would be nice.... But hey, maybe its not too late for Cannon to inquire about Attitash's Hall double built in the late 60's. They could paint it back red and it would be just like the original Mittersill (and Attitash) one.

A few miscellaneous notes...1) ski areas are now allowed to splice two haul ropes together, so two smaller lifts can be used. 2) painted chairs and towers can be blasted and dipped, therefore eliminating the issue of paint colors/rusting (thought most will just galvanize the chairs and keep painting the towers). 3) There's a chance that some of the existing concrete on the Mittersill lift could be reused, pending a pull test. Some of the footings I looked at were in better shape than the Whittier lift, for instance. That said, lifts are engineered differently today, so it's questionable how much of the existing footing locations would be reused.

In regard to doubles on the used market, there are quite a few Halls that have passed through in recent years. Though not popular, there are also some Riblet doubles that could be had today for cheap.

 

[riverc0il]

I don't think 2K vertical is particularly relevant here, since we're talking about a low-capacity lift, circa 1K vertical. Quite a few circa 1K vertical fixed grip lifts have been installed used in New England this year. The most recent example is (will be) the new main lift at Shawnee Peak, which was purchased used from Loon almost half a decade ago and has been in storage since then. That lift, when installed, will spin probably twice as many hours as compared to the Mittersill double.

That lift, which came from Loon, was replaced by a new lift. 1k or not, major resorts are just not replacing lifts with used lifts. 1k, 2k, or anything in between. The fact is that many private resorts in Cannon's market have built brand new lifts to service trail pods. Okemo's Jackson Gore comes to mind. Just because this is a double and not a HSQ does not excuse the fact that no other major resort is installing used lifts to service new trail pods or replace out dated lifts.

I am all for fiscal responsibility and saving NH tax payers money. But the argument that this is only happening in this situation because Cannon is state run I think is not accurate. I think any private operator would have installed new in this situation. Doubles run well over 50 years but they eventually all give out. A new lift could actually be beneficial cost wise in the long run.....

 

[AdironRider]

Threecy is just pissed off because he thinks he knows better.

There are lots of generalizatios and assumptions in his post. Shawnee probably paid low six figures. Maybe they did, maybe they didnt, he doesnt know.

Cannon is not Shawnee. Shawnee is a borderline feeder hill, where as Cannon is more of a "destination", as much as I hate that description. Shawnee isnt running a tram. They have to blow less snow, they have a much smaller f&b operation, they have a smaller grooming operation. Nothing is comparable.

I personally think it is a great thing for a state run operation to be valuing and investing in an asset that will pay off much greater in the long run. ORDA was another fine example (investing 6.6 million for 30+ million of tax revenue when looking at the economic impact regionwide - alas that is no longer).

Get over it threecy, Cannon is making improvements. This is always a good thing. A used lift is going to show its a used lift just like no used car looks or performs like a new car. I dont care how well kept or refurbished it is.

 

[deadheadskier]

They have to blow less snow, they have a much smaller f&b operation, they have a smaller grooming operation.

Disagree with both these statements

Shawnee is a BUSY place. I'd be willing to bet their ski operation revenue is equal to Cannon. If it's less, it's not by much.

They blow quite a bit of snow at Shawnee. The lodge is packed on weekends and pre-expansion thier lodge is of similar size as Cannon's. With their night skiing operation, they easily do way more business than Cannon midweek. Cannon probably does more on the weekends.

 

[EPB]

Riverc0il put it best while asserting that it might be fiscally prudent to purchase a new lift because of the added expenses that would come with the operation of a used lift. He also alluded to the idea that places like Cannon and other larger ski areas are expected to install new lifts on major trail pods; many customers would be underwhelmed by a used lift. Cannon would A: incur added yearly expenses, B: lose potential revenue because they bought a chintzy lift, C: require a replacement lift much sooner. These three reasons would greatly reduce the net present value of positive cash flows created by a used Mittersill lift. Fewer years of cash flows would greatly deplete the years over which the costs of a used lifts would be made up in positive cash flows. This would adversely affect Estimated Annual Cash Flows per year, meaning the amount of money that the lift makes per year on average during the life of the lift.

Side note: Buying a used lift and storing it for a number of years means that you defer positive cash flows further and lose money on your investment. Also the two double idea doesn't hold water when an engine capable of carrying skiers up 1400 vertical feet is needed.

Just because initial costs are higher does not mean that this is a bad investment. What Shawnee did was somewhat of a cheap (i.e. money up front) fix, though it might have been necessary in the short run. Cannon most certainly does not need a quick fix lift for an expansion. Rumblings of a Mittersill expansion are at least 10 years old now, indicating that this is clearly not a short sighted idea. Wouldn't you imagine that some sort of financial planning was done before they decided to go new? Or do you just think the state of New Hampshire thinks its funny to blow cash on lifts at Mittersill? You seem to be suggesting some type of variation on the latter.

 

[AdironRider]

Disagree with both these statements

Shawnee is a BUSY place. I'd be willing to bet their ski operation revenue is equal to Cannon. If it's less, it's not by much.

They blow quite a bit of snow at Shawnee. The lodge is packed on weekends and pre-expansion thier lodge is of similar size as Cannon's. With their night skiing operation, they easily do way more business than Cannon midweek. Cannon probably does more on the weekends.

Then I guess we agree to disagree. My better half worked there for 6 years, Ive spent a decent amount of time at the place. Shawnee seems busy because its small. Theres one triple to the summit with a mid, everyone rides it. The backside rarely has the coverage to be fully open.

Yes they do have night skiing, which seems to be quite successful, but the size of the mountain really affects the seemingly large crowds. If Shawnees lot is packed it probably has about 7/8 the cars of just Cannons front lot.

They do, or at least used to, do midday grooming runs prior to night skiing, which I thought was pretty awesome for a smaller place.

Im not trying to trash Shawnee, I just think its an unfair comparison to Cannon. With Cannon's new management regime, they are clearly trying to be something different, which is a place that holds its "edge" so to speak, but still can cater to the Loon, Okemo, Sunday River crowd. Hence the large Tuckerbrook expansion, new double for Mittersill, et al.

 

[threecy]

Threecy is just pissed off because he thinks he knows better.

I'm a bit vexed by this use of state money, yes. I'm not thinking that I "know better." Rather, I'm sharing information about one of the things I was/am involved in with the ski industry. In regard to the Shawnee Triple, I don't recall offhand what it went for, as a) I was not involved in that private sale and b) half a decade later, I'm more likely to recall what the party I was representing would have paid for it.

If you want to think that I'm just trying to show off, that's fine. I'm simply trying to shed some light on my experiences in the used lift market, of which I was involved in for about a decade.

 

[bobbutts]

I'm a bit vexed by this use of state money, yes. I'm not thinking that I "know better." Rather, I'm sharing information about one of the things I was/am involved in with the ski industry. In regard to the Shawnee Triple, I don't recall offhand what it went for, as a) I was not involved in that private sale and b) half a decade later, I'm more likely to recall what the party I was representing would have paid for it.

If you want to think that I'm just trying to show off, that's fine. I'm simply trying to shed some light on my experiences in the used lift market, of which I was involved in for about a decade.

I'm buying what you're selling.. Bottom line 2m+ for a double chair seems excessive.

 

[LonghornSkier]

Somewhat off topic but, will there be a connecting trail from anywhere on the mountain besides tuckerbrook novice area?

 

[riverc0il]

Somewhat off topic but, will there be a connecting trail from anywhere on the mountain besides tuckerbrook novice area?

I have not heard of any additional trails being put in. Getting back to Cannon from Mittersill can be done via a traverse no matter what trail you come down. Though I suspect Barron's will absorb most of the traffic heading back to Cannon which easily gets you back to the lodge all down hill. Getting from the lodge to Mittersill without taking the Tuckerbrook Chair would be difficult. You could ski down the Mittersill road from the base of the Tuckerbrook Chair with only a little poling if there is enough natural snow on the side of the road. I see no reason to make extra expense when it only requires one extra lift from the base area to get over there.

 

[SIKSKIER]

I have not heard of any additional trails being put in. Getting back to Cannon from Mittersill can be done via a traverse no matter what trail you come down. Though I suspect Barron's will absorb most of the traffic heading back to Cannon which easily gets you back to the lodge all down hill. Getting from the lodge to Mittersill without taking the Tuckerbrook Chair would be difficult. You could ski down the Mittersill road from the base of the Tuckerbrook Chair with only a little poling if there is enough natural snow on the side of the road. I see no reason to make extra expense when it only requires one extra lift from the base area to get over there.

Actually Steve,before they built the Tuckerbrook area there was a work road that comes out at the bottom of the old lift.I got my tuck stuck in there one late spring day and required a bizaar local's modified mud truck with an articulating center frame to pull us out.The "Dootlebug" was its name.I'm sure they would cut an appropriate traverse to access Mittersill from the Tuckerbrook lift.

 

[bigbob]

I think the $2 mil is money well spent for a NEW lift as buying a used lift which may have hard to obtain parts in the future. With all the BS the state had to go thru and money that was spent during that process, they don't want to have to go through this again for a long time! It only gets harder each year to obtain permits, look at the whole picture before lambasting the state.
And good luck trying to get a PE to stamp the drawings using very old foundations.

 

[Tin Woodsman]

Riverc0il put it best while asserting that it might be fiscally prudent to purchase a new lift because of the added expenses that would come with the operation of a used lift. He also alluded to the idea that places like Cannon and other larger ski areas are expected to install new lifts on major trail pods; many customers would be underwhelmed by a used lift. Cannon would A: incur added yearly expenses, B: lose potential revenue because they bought a chintzy lift, C: require a replacement lift much sooner. These three reasons would greatly reduce the net present value of positive cash flows created by a used Mittersill lift. Fewer years of cash flows would greatly deplete the years over which the costs of a used lifts would be made up in positive cash flows. This would adversely affect Estimated Annual Cash Flows per year, meaning the amount of money that the lift makes per year on average during the life of the lift.

I'd eat my ski helmet if you could possibly gin up an NPV analysis that portrayed this scenario with realistic numbers. Even with installation, you're looking at an initial cost difference of roughly $1.5MM in today's dollars. Your A is going to be modest with a refurbished lift B is unmeasurable and likely to be tiny anyway (Who makes a decision not to come check out a major new expansion b/c it's a used lift?) and C is so far out anyway, the the PV of the impact is going to be microscopic. Moreover, how does fewer years of cash flow (a measure of duration) have any impact or relationship with the"Estimated Annual Cash Flows" (I love how you capitalized this term for effect as if it's a formal term) within those years?

Side note: Buying a used lift and storing it for a number of years means that you defer positive cash flows further and lose money on your investment.

Well this assumes constant or rising prices, doesn't it? I'll bet you could have gotten yourself a lovely used lift for a song in the winter/spring of 2007/2008 after Lehman went tits up and the economy went into free fall. No one was buying anything. Maybe not so much now with a recovering economy and the 2nd strongest year in skier visits on record nationwide.

Rumblings of a Mittersill expansion are at least 10 years old now, indicating that this is clearly not a short sighted idea. Wouldn't you imagine that some sort of financial planning was done before they decided to go new? Or do you just think the state of New Hampshire thinks its funny to blow cash on lifts at Mittersill? You seem to be suggesting some type of variation on the latter.

Is this sarcasm or some form of satire? Do you really think there's some bureaucrat at a desk in Concord who is performing a comparative analysis of various Mittersill lift installation options? I would imagine that there isn't a single employee of the State of New Hampshire not working for Cannon who has any familiarity whatsoever with the financial planning for the Mittersill lift.

While your post doesn't do anything for advancing the cause of those who aren't concerned with the new lift, it doesn't need to anyway. Threecy's logic and experience are compelling and relevant. I have no doubt that a used lift would have been the financially superior alternative. But his argument is missing a few critical components. Referring specifically to the Shawnee lift is misleading as, in his owns words "Shawnee purchased the triple years ago when it came on the market, then installed it when they felt it was time". As he should know from the rather tortured history of the Mittersill reclamation, Cannon never had the luxury of buying a lift and storing it until they thought they were ready. They had to fight a very complex battle with multiple competing and overlapping govt entities at both the State and Federal level. The achievement of a successful outcome in this process was NEVER guaranteed and was, according to many observers, quite a bit in doubt for a long time. Given this landscape, it would have been foolhardy and most certainly a waste of NH taxpayers' dollars to purchase a used lift, no matter how cheap, and place it in storage just in case the land swap was executed and the approvals secured. The uncertainties inherent in that process were to great to act otherwise.

Accordingly, the only time period that really matters it that which begins with the approval of Cannon's plans a year or so ago and now. Do we know how many used doubles fitting Cannon's requirements were on the market during this window? That's important information we need to understand the choices Cannon mgmt actually had available to them. Even if there used options, I think Rivercoil's point is valid in that there are no private ski areas of Cannon's class who would have installed a used lift for a such a major expansion. Could you name a precedent that would fit this mold? Jackson Gore? No. Bolton Valley's new Vista lift (not all that major)? No. Loon Peak South Mtn? No. Saddleback? No. Stowe's Spruce Peak? No. Ascutney North Peak? No. Bretton Woods? No. Heck, even when tiny old, small-school owned and operated Middlebury Snow Bowl had to replace their Worth Mtn chair, they bought a brand new Dopplymayr.

Given the time crunch involved as well as the prestige and market positioning of Cannon Mtn, I think it's entirely defensible to have purchased a new chair. That $2.6MM does sound like a lot, so I'm interested to know why that cost so much as compared to the longer and more technically challenging single replacement at MRG (2000' of steep vertical) or the Worth Mtn chair I mentioned (1000' vertical), both of which came in at around $1.7MM.

 

[Puck it]

I think the money was not money from the state. Cannon has had a profit the last profit two years with their own business increase and the money from the Sunapee lease.

 

[bigbob]

If I recall correctly, Killingtons new Skye Peak Express detachable Quad was about $5 mill, reusing the old lift towers.

 

[riverc0il]

That $2.6MM does sound like a lot, so I'm interested to know why that cost so much as compared to the longer and more technically challenging single replacement at MRG (2000' of steep vertical) or the Worth Mtn chair I mentioned (1000' vertical), both of which came in at around $1.7MM.

As I recall, the Single refurb cost more than a new Double at the time which was one of the few valid points double supporters had going for them. Prices have gone up since then.

 

[threecy]

I think the money was not money from the state. Cannon has had a profit the last profit two years with their own business increase and the money from the Sunapee lease.

That money is the money of New Hampshire taxpayers. NH taxpayers own Cannon and any profits or losses, direct or indirect.

But his argument is missing a few critical components. Referring specifically to the Shawnee lift is misleading as, in his owns words "Shawnee purchased the triple years ago when it came on the market, then installed it when they felt it was time".

You'll note that part of my comments included the current structure of Cannon which resulted in this bid process.

Accordingly, the only time period that really matters it that which begins with the approval of Cannon's plans a year or so ago and now. Do we know how many used doubles fitting Cannon's requirements were on the market during this window?

I do, but that's what people pay money for

That's important information we need to understand the choices Cannon mgmt actually had available to them. Even if there used options, I think Rivercoil's point is valid in that there are no private ski areas of Cannon's class who would have installed a used lift for a such a major expansion. Could you name a precedent that would fit this mold? Jackson Gore [quad]? No. Bolton Valley's new Vista lift (not all that major) [quad]? No. Loon Peak South Mtn [quad]? No. Saddleback [quad]? No. Stowe's Spruce Peak [quad]? No. Ascutney North Peak [quad]? No. Bretton Woods [quad]? No. Heck, even when tiny old, small-school owned and operated Middlebury Snow Bowl had to replace their Worth Mtn chair, they bought a brand new Dopplymayr [triple].

I think this is poor logic. Why can only new pods be used to compare? Also, from that list, Bolton Valley/Middlebury/Ascutney/Saddleback where done without creating any significant new terrain. Regardless, if looking for mid-sized to major ski areas who have installed used lifts in recent years, a few examples would be Attitash, Cannon (!), Crotched (every chairlift is used), Gunstock, Sunapee, Okemo, Smugger's Notch, Berkshire East, Catamount, Jiminy Peak, Wachusett, Shawnee Peak, and Sunday River, just to name a few.

as buying a used lift which may have hard to obtain parts in the future.

Unless they were to obtain an obscure brand, it wouldn't be much of an issue to obtain parts. In fact, the CTEC actually provides parts for a lot of used lifts.


I think it's also very important to point out that this new chairlift will operate the least number of hours of any primary, public chairlift in the entire state. We're not talking about massive a new area that will be open day and night, 7 days a week, November-April. Rather, we're talking about something that *might* be in operation for about 10 weeks a year, based upon what has been presented.

 

[SIKSKIER]

I think it's also very important to point out that this new chairlift will operate the least number of hours of any primary, public chairlift in the entire state. We're not talking about massive a new area that will be open day and night, 7 days a week, November-April. Rather, we're talking about something that *might* be in operation for about 10 weeks a year, based upon what has been presented.

Where do you come up with the info for this statement?

 

[thetrailboss]

Looks like Threecy is really fired up about this project!

 

[Tin Woodsman]

You'll note that part of my comments included the current structure of Cannon which resulted in this bid process.

Mind you, I'm as big a skeptic as there is w/r/t State run businesses (see the rest of my response to EPB), but you've presented zero evidence that state ownership is the sole or even primary factor driving the bid process. Just saying that's a reason doesn't make it so.The compressed time frame, amongst other factors, means this issue could have been one based solely on defendable, commercial rationales.

I do, but that's what people pay money for

Really? That's your answer? "I could tell you but I won't" I'm sure no one is paying you to tell them how many used double chairs were available during that period, sans names, locations, sizes, prices and capacities etc.. What a cop out.

I think this is poor logic. Why can only new pods be used to compare?

The answer to that is self-evident. New trail pods, especially ones as large as Mittersill, have orders of magnitude more visibility and marketing hype than a simple replacement of an older lift. None of the mountains you referenced lower down in your post used the old lift to support new terrain. Not one. (Smuggs? That was 20 years ago). Whether you appreciate it or not, this is the biggest news to hit Cannon in decades, so it's no surprise they want to put their best foot forward with their customers.

Also, from that list, Bolton Valley/Middlebury/Ascutney/Saddleback where done without creating any significant new terrain.

Bullshit. the 30 new acres at Bolton were the biggest thing to happen to them in 20 years. You may recall their previous expansion to Timberline area was accomplished with a new FG quad. Ascutney added 270 vertical feet to their mountain and three new expert trails, pushing it into the big leagues from a vertical drop and marketing perspective (1800' vert jumps out at you a lot more than 1530'). Including just the liftline and the Casablanca glade, Saddleback experienced a massive increase in skiable terrain just this year alone. When you consider the terrain additions from the last 2-3 years in that pod, they've more than doubles the available terrain on the Kennebago pod. So all in all, I'd disagree strongly that no significant new terrain was added in support of those lifts. The terrain, while not significant from the perspective of a mega-resort or the industry as a whole, was very much significant to those mountains and their market positioning.

Regardless, if looking for mid-sized to major ski areas who have installed used lifts in recent years, a few examples would be Attitash, Cannon (!), Crotched (every chairlift is used), Gunstock, Sunapee, Okemo, Smugger's Notch, Berkshire East, Catamount, Jiminy Peak, Wachusett, Shawnee Peak, and Sunday River, just to name a few.

How many of those lifts serve major new terrain for those mountains? How many of those areas does Cannon legitimately compete in the same league with? Wachusett, BEast, Catamount, Jiminy, Gunstock and Shawnee are either geographically irrelevant or serving a different section of the market altogether. Of the remainder, Sunapee, Okemo and Sunday River only used these lifts to replace existing ones and none of them served core terrain. I presume that with Smuggs you're referring to the new Morse Woods pod, which you know is tiny, out of the way, and 20 years ago. In sum, you have yet to provide a SINGLE example of a private destination ski area installing a used lift to service a major new terrain pod. Not even one. That's a pretty low bar, and you still haven't been able to overcome it.