Cannon lift out to bid

[deadheadskier]

not 100% sure, but wasn't the South Face Quad the original Solitued Fixed Grip? I do believe they moved it over when they replaced Solitude with a Detach.

I think all Mueller used lift applications that they've done over the past several years have been done with lifts they actually own, not bought 2nd hand.

I say this not to take away from your argument of buying used at Cannon. You have a good point given the minimal usage the lift will see without significant snowmaking effort.

Personally? I think it's silly to argue the point either way......yours or those in favor of a new lift. I say that meaning no offense. Cannon is a state owned entity that is successful enough to not fail. As I mentioned prior, 2 mil is about $2 a resident, so as a NH tax payer, I really could care less.

Just wish I lived a touch closer to take advantage of the $475 pass as an NH resident. Really wish they offered a Sunday afternoon NH resident deal like Sunapee.

 

[threecy]

Personally? I think it's silly to argue the point either way......yours or those in favor of a new lift. I say that meaning no offense. Cannon is a state owned entity that is successful enough to not fail. As I mentioned prior, 2 mil is about $2 a resident, so as a NH tax payer, I really could care less.

$2,000,000 is a big deal, especially considering that Concord is about to tip over right now.

Since it is not a direct budget line item though, one can still question how they could better spend the $2,000,000 at Cannon. Again, imagine if Cannon were to spend that on fan guns - imagine what the conditions would be like at Cannon if they had the fan gun snowmaking coverage that Mt. Snow has? I still think a multi-million dollar investment addressing Cannon's achilles' heel would go much further in making Cannon a strong ski area.

As it stands now, they're skiing the skier visits of a small to mid-sized ski operation on the mountain of a major ski area. Adding this brand new double chairlift will actually add to this inbalance.

 

[thetrailboss]

But isn't it arguable that Cannon is trying to get more skiers and riders by catering to the natural terrain/conditions crowd since they pretty much only have Wildcat to compete with for that market?

As to Cannon having 72 trails, are you kidding? When I was in high school in the late 1990's they had 45 or so. I mean come on....almost as bad as Stowe going from 45 to 100 or so in one season after years of marketing on the point that they did not pander to padded trail counts. Oh wait, they were owned by AIG, so that explains why the numbers got so inflated without anything to back it up. :lol:

 

[Tin Woodsman]

What's with the moving target? I thought the modified question was limited to only this year, since it wasn't fair to look back over the years since the project was announced. Being that it's limited to this year, it's a question of what *is* on the market, which I'm not going to disclose here.

There's no moving target. I asked a simple question: How many doubles have been on the market this year? I have no interest in which doubles those are, where they came from, or where they might be going. If you could simply answer the question, which gives away nothing of a proprietary nature, that would help clear things up, wouldn't it?

Visibility and marketing hype? Then why put in a double chairlift and little to no snowmaking?

So you're suggesting they should have spent even more money for a triple, quad or detatchable lift? How is that consistent? Regarding not having snowmaking, as you are at pains to point out, Cannon is fully a part of the NH state govt. They invest what they are appropriated/approved/allowed by poorly paid politicians with little to no knowledge of the complexities of the ski industry. While snowmaking is in the long-term picture, it's not like they can just call the bank to secure the financing for such an expansion this year, no matter how compelling the business case.


Really? Firstly, your list was actually mixed (new terrain vs. replacement). Secondly, if you look at my list, which was not under the guise of serving all new terrain, many of those *did* serve net new terrain. [/quote]
Shouldn't it under the guise of serving new terrain? Is that now what we're talking about here? Which ones on your list served a brand new pod of trails? Widow White's peak at Jiminy? Even if true, that's a lousy example for your case, as that modest amount of terrain surely didn't need a quad chair to serve it.

Bottom line, most skiers can't identify the age or make of a lift. This brand new double chairlift will look virtually the same as a nicely painted 20 year old lift to most folks.

So then why don't we see major resorts buying a lot of used lifts? I understand why small to mid-sized resorts would consider it, but why is that there are precious few examples of major resorts buying them to serve new, marquis terrain?

With all due respect, you're all over the place in using your own rules as to what constitutes new expansion and what constitutes replacement.

Enlighten us. How was I inconsistent? I think it's pretty easy to determine what's expansion and what's replacement.

What *is* Cannon's league? This is a question that has been a tough one for many people in the industry to answer. Regardless, we're talking about a ~1K vertical double chairlift, whether it was installed new or old. We're not talking about a major pod that will transport 3,000 skiers an hour, or be the basis of 300 new condos, etc.

Why does a major pod have to support more real estate (Hint: The real estate was already built there) or have excessive lift capacity for the terrain? Is that your vision of what skiing and terrain expansions today should be about? It is a major expansion of terrain for Cannon anyway you slice it. A 1300' lift is nothing to sneeze at on any mountain. That likely places it in the top 20% of all lifts in the East in terms of vertical.

But Bolton Valley and Saddleback are?

You're joking right? Saddleback is another 2000' vert mountain with a hard core reputation going after the metro Boston market. Duh.

As for BV, in terms of acreage, vertical, clientele, snow surfaces and pricing, it's clearly more in Cannon's league than the local Mass and Southern NH hills you referenced, even if they are drawing from largely different markets.

So Mittersill is core terrain? Regardless, are you 100% sure of the rest of your statement?

Core was as poor word choice. It will certainly be marquis terrain that will generate buzz amongst the skiing community. When they install snowmaking, the Mittersill terrain should help to fill a gap in Cannon's current offering.

 

[Tin Woodsman]

More years of cash flow from a lift means more PV of cash flows.

Once you get out past the usable life of a used lift, the PV of the out years is a rounding error b/c they're being discounted almost completely by that point. Also, that has nothing do with the the amount of cash flows you generate in a given year, which was what you originally claimed.

It also spreads the negative amount of cash flow spent up front over more years....

No, your depreciation schedule, which is mandated by GAAP, determines how long you can spread out the "negative cash flow" in the form of the original investment. Any business worth it's salt uses the most aggressive schedule possible in order to maximize the real-dollar benefit of the depreciation tax shield. Whatever happens in 40-50 years is irrelevant to this analysis b/c the lift would be long since depreciated regardless of whether it's new or used.

EACF is the abbreviation that I was taught; I imagine many wouldn't know what I was referencing. Remind me why is the capitalization was relevant to anything you're asserting. Are YOU familiar with the EACF calculation? It doesn't seem to be the case.

There is no calculation for EACF b/c it's not a formal term with a specific formula. Find it on investopedia.com or something similar. You see references to such a term here and there, but it's just a very general and non-descript term of art. You were using it as if it was something like NPV, Book Value, or ROI, which it clearly is not.

Inflation would lower PV of cash flows too. Skilifts.org also said this about the triple: "Sold to Shawnee Peak Maine in 2006. Had a special variance from NH Tramway Board to run at 550 fpm. " Pre Lehman going "titties up".

Inflation has been next to non-existent in the last few years, despite the best efforts of Ben Bernanke. Pricing for specific goods and services, especially those tied to industries dependent entirely upon discretionary income, tend to swing by a bit more than macro prices during major disruptions like we saw in 2008.

A little bit of both. You too have a documented track record of sarcasm and satire; I'm glad you picked up on mine.... Last time I checked, Cannon had a GM that was at least somewhat responsible for financial planning. Wouldn't you say?

But you stated that the rumblings have been ongoing for 10 years now. We know the GM has changed during that time. I'm certain there's been other turnover. As important, there isn't a private owner or corp office ensuring consistency of planning (call it "the vision thing") as administrations come and go.

The last statement in this bit is almost certainly not true- "any familiarity whatsoever..." You should know better than to use such broad sweeping statements.

Really? You really think there are some bureaucrats or part-time politicians in Concord who are in the weeds on the planning for the Mittersill lift? You honestly think that's how it works?

 

[Tin Woodsman]

Wow, look at all of these horrible lifts that were installed used...oh the humanity!

Q1 Quad, Jiminy Peak, 23 years old

Summit Quad, Crotched, 21 years old

Valley Quad, Crotched, 21 years old

West Double, Crotched, ~40 years old

Zero G Triple, Crotched, 21 years old

Pistol Triple, Gunstock, 24 years old

West Quad, Berkshire East, 21 years old

Summit Triple, Berkshire East, 23 years old

Top Notch Double, Berkshire East, 46 years old

Macomber Double, Easton, ~30 years old

Vickery Triple, Wachusett, ~30 years old

Morning Star Triple, Okemo, 27 years old

Eagle Cliff Triple, Cannon, 23 years old

All of those, with the exception of Okemo, are 2nd and third rate, non-destination resorts. That's not Cannon. As for Okemo, the Morning Stare triple is a 500' vertical real estate lift. I would be shocked if more than 25% of Okemo skiers on any given day could tell you where it is. How that should be compared to Mittersill is beyond me.

 

[Tin Woodsman]

One of the big things I'm noticing in this thread when the mention of refurbished installs keeps being brought up is that all of the ski areas cited in the use of refurbished lifts are privately owned. I wonder if that, the situation where obviously cost conscious in any situation, the folks at Cannon (and at any other publically owned ski area) don't have to be quite as cost conscious???

Come to think of it, can anyone think of a publically owned ski area that has installed a refurbished lift??

Maybe the Lookout Triple at WF?

Definitely the Top Ridge Triple at Gore.

I don't count any at Sunapee b/c it's privately operated regardless of ownership.

 

[Tin Woodsman]

Left natural, critical parts of Mittersill do not hold snow well enough to provide a lift served product that skiers expect, from Thanksgiving to Easter.

Who is moving the goal posts now? Name me a single trail on any mountain in the East that is generally skiable on natural snow from Thanksgiving to Easter. Not meeting that standard has zero to do with the question of whether it holds snow well. Spillsville at SB holds snow as well as any run in the East b/c it's high up, narrow, and faces NE. Even that run is only skiable by Thanksgiving well less than 50% of the time.

Using 2010 US dollars again for argument's sake, Cannon would have to sell over 393,000 full price adult lift tickets above and beyond their current levels at a 10% profit margin in order to pay for the installation of that brand new lift.

Why use 2010 dollars when lift ticket prices are increasing much faster than inflation? In addition, as an alleged industry insider, you should know darn well that lift ticket revenue alone accounts for only a portion of overall revenue from a skier, especially the kind that like walking out their door from a condo at the base of a mountain - one like say, Mittersill! There is F&B, lessons, rentals - all of which are major revenue streams. Stop being so disingenuous.

[quote[Those were just a few examples. Did you know the South Face at Okemo was opened with a used quad chairlift (I didn't post a photo because I don't have a photo of that lift when it was there)? The South Face has just about the same vertical drop as Mittersill.[/quote]
Why didn't they buy a used double for less? It's not like the South Face needs the capacity a quad brings to the table.

Oh really? Did you know Jiminy and Wachusett ski more people than Cannon?

Oh! Ooh! I can play that game too! Did you know that Mountain High outside of LA has way more skier visits than Jackson Hole? Mountain High must be world class!!

How is Mittersill bigger than Jiminy, Crotched, and Wachusett? Lift served vertical drop, by a few hundred feet, sure. But total official acreage?

Whether you like to admit it or not, things like vertical and snowfall matter. I like how you use "official" acreage too. It is likely that Mittersill alone has more terrain than the other three when "unofficial" acreage is included. In today's market, that matters.

With little to no infrastructure, as the $10M for Mittersill included, if I'm not mistaken? Regardless, Crotched Mountain raises its hand.

How much of that went to the approval process mandated by Cannon's ownership and land owners? I don't know why you think it's relevant to compare it to a hill entirely on private land. It doesn't cost $7.4MM (the $10MM total less $2.6MM for the lift) to clear overgrown trails.

 

[Tin Woodsman]

I'm not sure why Mittersill should be considered a major trail pod? It will likely have the second lowest uphill capacity of any chairlift served pod in New England (next to the MRG single).

Well, you've sort of blown up your own argument while trying to make it. Why does uphill capacity matter when discussing how important a trail pod is? I think the terrain served my MRG's single is pretty major, as is Sunnyside. I think Castlerock is a pretty major trail pod, but that's just me. I'm sure there's a few Jay Peak aficionados who like skiing off the summit, even though the tram has such a pathetic and paltry uphill capacity (while we're at it - Rendezvouz Peak at Jackson? Pshaw! Second rate! Not enough capacity!!!) Madonna 1 doesn't do it for you I suppose? Wilderness at Bolton doesn't make the grade?

Oopsie.

Another example of used lifts serving major pods at major resorts that I left out - the South Face at Okemo was originally built using a used fixed grip quad. They later replaced that with a high speed quad. That fixed grip quad was then installed used at Sunapee as the Sun Bowl Quad.
[/IMG]
Their own or someone else's? Big difference.

I don't understand why Cannon is considered a major ski area but Jiminy and Wachusett aren't. Jiminy has a much larger lift network than Cannon. Wachusett has more detachable chairs than Cannon. But, more importantly, Jiminy skis twice as many people as Cannon, and Wachusett skis three times as many people as Cannon. Cannon may seem like a major resort due to the tram and large vertical drop, however it certainly doesn't ski anywhere near as many people as the big players in New England.

As discussed elsewhere, that's a specious argument. Comparing local hills that do big volume to larger destination resorts is apples and elephants.

Wachusett skis more people than Jackson Hole, Telluride, Aspen Highlands, and Taos. Is Wachusett more of a premier/major ski area than those locales?

 

[Tin Woodsman]

Since it is not a direct budget line item though, one can still question how they could better spend the $2,000,000 at Cannon. Again, imagine if Cannon were to spend that on fan guns - imagine what the conditions would be like at Cannon if they had the fan gun snowmaking coverage that Mt. Snow has? I still think a multi-million dollar investment addressing Cannon's achilles' heel would go much further in making Cannon a strong ski area.

How much extra budget would they have to run those fan guns and make that extra snow? Also, the water will always be there if they decide to tackle snowmaking in the future. The chance to re-open Mittersill was a one-time opportunity given the competing and overlapping jurisdictions. No one can fault them for taking it, expect perhaps for a self-interested industry insider who is in the used-lift business.

As it stands now, they're skiing the skier visits of a small to mid-sized ski operation on the mountain of a major ski area. Adding this brand new double chairlift will actually add to this inbalance.

Certainly will do so on Day 1, but that lift will be around for 50 years, and I'm sure that Cannon is betting that dramatically expanding terrain and now having a new neighborhood of condos at the base of one of their lifts will heighten their profile just a tad.

 

[bigbob]

I wouldn't be surprised either...with Bretton Woods and Attitash chasing after each other for the last 20 years for the title of "NH's biggest," I wouldn't be surprised to see Cannon try to lay claim as a result of this project. In some comparisons, the numbers Bretton Woods and Attitash use are just silly vs. some Vermont areas, as an example.

Isn't Loon now considering itself to be "NH Biggest " now?

 

[riverc0il]

I'm not sure why Mittersill should be considered a major trail pod? It will likely have the second lowest uphill capacity of any chairlift served pod in New England (next to the MRG single).

Why not? Look at how much terrain it serves? It serves more terrain and vertical than the Zoomer Chair which I would consider a major trail pod. Over a 1000 vert. My definition of a major trail pod is quality and quantity of terrain served relative to the mountain, not up hill capacity (or else you could consider Castlerock not major either).

I don't understand why Cannon is considered a major ski area but Jiminy and Wachusett aren't. Jiminy has a much larger lift network than Cannon. Wachusett has more detachable chairs than Cannon. But, more importantly, Jiminy skis twice as many people as Cannon, and Wachusett skis three times as many people as Cannon. Cannon may seem like a major resort due to the tram and large vertical drop, however it certainly doesn't ski anywhere near as many people as the big players in New England.

Jiminy and WaWa are not destinations. People are not over nighting those areas. When most folks want to do serious skiing, they are driving right past those areas. Nashoba has about as many lifts than Cannon, does that make them on par? Nashoba probably also has more visits than Cannon due to night skiing and after school programs. Again, not a good comparison. Vertical drop and destination makes a mountain "major" IMO.

They already started this last year, by widening a few trails (including Taft above the top of the chairlift and leaving a bunch of stubs sticking about 2-3" above the ground). As of yesterday, they've widened a bunch more (including the lift line), and are solidifying the work road to the top terminal.

The only trail I noticed widened last year was the Taft (unfortunately, and a trail that will not even be serviced by the lift, talk about a waste of time and money). I was actually kind of surprised that there wasn't really much if any (I certainly didn't notice any and I know the area very well) widening and cleaning done last year aside from Taft. They did chop in a very narrow lift line last year on the lower mountain, the upper mountain lift line was already cleared. They definitely needed to expand it more than their efforts last year which were very basic and minimal.

 

[deadheadskier]

Jiminy and WaWa are not destinations. People are not over nighting those areas. .

Jiminy actually is for some. CEO of my company headquartered in NJ has a condo there. Not sure why they don't just drive a bit less to the Catskills region or a bit more for VT. Perhaps the summer appeal of the Berkshires.

 

[threecy]

There's no moving target. I asked a simple question: How many doubles have been on the market this year? I have no interest in which doubles those are, where they came from, or where they might be going. If you could simply answer the question, which gives away nothing of a proprietary nature, that would help clear things up, wouldn't it?

Without looking at my records or any recent listings, I can think of half a dozen doubles that could be attained today.

So you're suggesting they should have spent even more money for a triple, quad or detatchable lift? How is that consistent? Regarding not having snowmaking, as you are at pains to point out, Cannon is fully a part of the NH state govt. They invest what they are appropriated/approved/allowed by poorly paid politicians with little to no knowledge of the complexities of the ski industry. While snowmaking is in the long-term picture, it's not like they can just call the bank to secure the financing for such an expansion this year, no matter how compelling the business case.

Who is moving the goal posts now? Name me a single trail on any mountain in the East that is generally skiable on natural snow from Thanksgiving to Easter. Not meeting that standard has zero to do with the question of whether it holds snow well. Spillsville at SB holds snow as well as any run in the East b/c it's high up, narrow, and faces NE. Even that run is only skiable by Thanksgiving well less than 50% of the time.

serve new, marquis terrain?

Perhaps you're missing my point. They are installing a double chairlift on, as of today, non-snowmaking terrain. They aim to provide limited snowmaking. We're not talking about South Face, or Jackson Gore, or South Peak, or Bear Peak here.

A 1300' lift is nothing to sneeze at on any mountain. That likely places it in the top 20% of all lifts in the East in terms of vertical.

So then why don't we see major resorts buying a lot of used lifts? I understand why small to mid-sized resorts would consider it, but why is that there are precious few examples of major resorts buying them to serve new, marquis terrain?

We do, but you apparently have an arbitrary system of deciding what's a major resort and what's not.

Wachusett, BEast, Catamount, Jiminy, Gunstock and Shawnee are either geographically irrelevant or serving a different section of the market altogether.

You're joking right? Saddleback is another 2000' vert mountain with a hard core reputation going after the metro Boston market. Duh.

As for BV, in terms of acreage, vertical, clientele, snow surfaces and pricing, it's clearly more in Cannon's league than the local Mass and Southern NH hills you referenced, even if they are drawing from largely different markets.

You don't think Gunstock and Wachusett draw from Cannon's market? Yet you think Saddleback is going after the "metro Boston market?" Where do Gunstock and Wachusett draw from? New York City?

All of those, with the exception of Okemo, are 2nd and third rate, non-destination resorts.

Clearly skier visits and revenue don't matter to you - only the magical vertical drop number. I'd like to see you walk up to the owners and General Managers of those mountains and tell them to their faces that they run "2nd and third rate" resorts.

As for Okemo, the Morning Stare triple is a 500' vertical real estate lift.

South Face was also?

In addition, as an alleged industry insider, you should know darn well that lift ticket revenue alone accounts for only a portion of overall revenue from a skier, especially the kind that like walking out their door from a condo at the base of a mountain - one like say, Mittersill! There is F&B, lessons, rentals - all of which are major revenue streams. Stop being so disingenuous.

How many Mittersill skiers rent equipment? How many Mittersill skiers get lessons? Where are they selling F&B at Mittersill?

Why didn't they buy a used double for less? It's not like the South Face needs the capacity a quad brings to the table.

I was not in the industry when they built South Face, so unfortunately I have zero insight on that decision. Regardless, the management at Okemo likes to ensure new areas have high uphill capacity. Certainly there are lines there when Okemo is busy, at least in my limited experience skiing there.

Their own or someone else's? Big difference.

Absolutely. That's a critical aspect in buying used - knowing how well the lift was maintained. One of the reasons Loon's triple chairlift was coveted was that Loon had a good reputation for maintaining their equipment.

As discussed elsewhere, that's a specious argument. Comparing local hills that do big volume to larger destination resorts is apples and elephants.

Wachusett skis more people than Jackson Hole, Telluride, Aspen Highlands, and Taos. Is Wachusett more of a premier/major ski area than those locales?

More of a premier? No. But they're certainly not Ward Hill.

How much extra budget would they have to run those fan guns and make that extra snow?

If they ran them at a Mt. Snow pace, hundreds of thousands of dollars extra. If they ran them instead of air/water, using the same hours, they'd see better yield and some savings.

The chance to re-open Mittersill was a one-time opportunity given the competing and overlapping jurisdictions.

I don't believe the landswap was dependent upon them buying a brand new double chairlift in 2010. Frankly, I think the situation they had in 2009-2010 was pretty neat (having Mittersill as an official non-lift served backcountry ski area). They were able to operate it at little cost. I think, as they continue to widen and homgenize the trails back into the generally intermediate area that it is, there will be a lot of unhappy, diehard Cannon skiers. Will they stop going to Cannon? Who knows.

Cannon is betting that dramatically expanding terrain and now having a new neighborhood of condos at the base of one of their lifts will heighten their profile just a tad.

Cannon is building new condos? Or are you suggesting that today, the folks who own at Mittersill are all driving to Loon?

No one can fault them for taking it, expect perhaps for a self-interested industry insider who is in the used-lift business.

My only real interest in this is as a New Hampshire taxpayer. My dealings in the used equipment business are miniscule as compared to when I was in the industry full time.

I'm trying to share knowledge with folks, as I think a lot of people had the same reaction when they saw the $2,600,000 cost for a double chairlift. At this point, I'm getting pretty sick arguing this point with people who don't know or don't care to know about the workings of the ski industry. There are quite a few folks on these forums who know a heck of a lot more about lifts than I do, but they have wisely chosen to stay out of this thread.

 

[threecy]

Jiminy and WaWa are not destinations. People are not over nighting those areas.

Zero people stay overnight at Cannon. Jiminy, on the other hand, has a massive slopeside condo/timeshare complex. Wachusett if I'm not mistaken also owns the lodging facilities they advertise on their site.

 

[Puck it]

Just to be clear...that lift has not operated for over 20 years and is quite decayed. It is not even close to being safe.

From NELSAP:

From Chairlift.org:

All it needs is a little rattle can paint and it would be fine!!!!!!!!:wink:

 

[deadheadskier]

Zero people stay overnight at Cannon. Jiminy, on the other hand, has a massive slopeside condo/timeshare complex. Wachusett if I'm not mistaken also owns the lodging facilities they advertise on their site.

and there lies the problem for Cannon wanting to grow its business. Outside of a small amount over on Mittersill, there is minimal bed base for Cannon and that probably will never change due to permitting.

The two biggest ways for increasing skier visits are:

1. New lifts and terrain

2. Increasing the bed base

I do understand your point that fan guns would make a world of difference for the skiing product on Cannon Mountain. Also I'm in the camp of wanting to let Mittersill remain the way it is.

The lift being new or used is what it is. I do get why they're moving forward with it. The increased trail acreage it will provide might be the largest at any eastern ski area for one summer in the past 20 years. Maybe Jackson Gore at Okemo was more, but it was done in stages.

Now, enthusiasts know that that terrain will not be open more than 70ish% of the season, some years less. Joe Recreational skier won't know that though nor will the shiny new brochures say that.

Cannon can market the hell out of Mittersill and it will bring a lot of new traffic to the mountain. Fan Guns wouldn't have the same impact. I imagine once they get the increased traffic / revenue, the next stage of investment will involve snowmaking upgrades.

 

[billski]

Cannon and the Mitt, 1939. Nice narrow trails, huh?

 

[billski]

http://www.cannonmt.com/intrailmap.html
That's interesting. Are the Mitt trails shown the original ones?
Looks pretty much the same
http://www.nelsap.org/nh/mittersill.html

 

[Puck it]

Fan Guns at Cannon would be a bad idea. Too much wind for them.