Cannon Mountain...thoughts

[deadheadskier]

well, unsuccessful state run areas Cannon and Sunapee were responsible for Crotched and Temple's demise according to threecy, so Crotched and Temple share that in common.

Honestly, that's the one argument of threecy's that turns my head sideways. The fiscal numbers he pointed out through Cannonball's documents were eye opening and give pause to think about the positives of the lease argument. Really solid information. The fact that he blames unsuccessful State run areas for the demise of Crotched, Temple and King Ridge, yet argues those very same areas have (Sunapee) and could (Cannon) run so much better by private operators is contradicting. Blaming poorly run state areas for putting private areas out of business doesn't work when you are arguing those same state run areas are/could be better run when leased to private operators.

 

[threecy]

The fact that he blames unsuccessful State run areas for the demise of Crotched, Temple and King Ridge, yet argues those very same areas have (Sunapee) and could (Cannon) run so much better by private operators is contradicting. Blaming poorly run state areas for putting private areas out of business doesn't work when you are arguing those same state run areas are/could be better run when leased to private operators.

It's not a fact, it's a theory, and you'll note I used words such as 'hypothesis.'

That particular market has long been a question mark in lost ski area research, in that quite a few advanced ski areas in proximity to each other and significant population went out of business. Each of those areas was in that rough triangle of then-government run areas. The thing you're missing is that, even in the worst years, the government areas were getting bailed out and seeing additional investment. Privately leased areas still have to deal with real world consequences.

 

[threecy]

I think the argument of Crotched vs Temple is well made, but is there really much difference? I mean, was one area that topographically superior to the other?

Present day Crotched quasi-summit quad: ~800 vertical feet
Former Temple summit quad: 452 vertical feet

 

[deadheadskier]

It's not a fact, it's a theory, and you'll note I used words such as 'hypothesis.'

That particular market has long been a question mark in lost ski area research, in that quite a few advanced ski areas in proximity to each other and significant population went out of business. Each of those areas was in that rough triangle of then-government run areas. The thing you're missing is that, even in the worst years, the government areas were getting bailed out and seeing additional investment. Privately leased areas still have to deal with real world consequences.

The investment the State made in Sunapee pales in comparison to what the Meuller's have done. I think the Meuller's have shown a willingness to invest in their properties during the worst of times. They did so at Okemo during the early 80s, early 90s and 2000s when the economy was horrible. Les Otten did the same with his resorts in the 80s and 90s. I think it's safe to say that had the Meullers had the Sunapee lease from the mid-80s forward they would've economically hurt those small areas far worse than the big bad State of NH did.

Your theory in combination with your desire for private management of State owned ski areas is 100% a have your cake and eat it to position.

 

[threecy]

They did so at Okemo during the early 80s, early 90s and 2000s when the economy was horrible.

You really want to make that statement? Their first new lifts at Okemo were 1983-84, when the economy was booming. They were already in the midst of an expansion when the brief 1990-91 recession hit. With the early 2000s Jackson Gore project, you have an example of how the private sector had to stop spending.

 

[thetrailboss]

It's not a fact, it's a theory, and you'll note I used words such as 'hypothesis.'

That particular market has long been a question mark in lost ski area research, in that quite a few advanced ski areas in proximity to each other and significant population went out of business. Each of those areas was in that rough triangle of then-government run areas. The thing you're missing is that, even in the worst years, the government areas were getting bailed out and seeing additional investment. Privately leased areas still have to deal with real world consequences.

I will agree that state ownership may be a factor, but it was not a nail in the coffin. These areas went for years and decades against Cannon and Sunapee. The impacts of labor expenses, energy costs (a HUGE increase in the 1970's), insurance, and weather all played much more into the equation. You also aren't considering size or vertical drop.

 

[thetrailboss]

You really want to make that statement? Their first new lifts at Okemo were 1983-84, when the economy was booming. They were already in the midst of an expansion when the brief 1990-91 recession hit. With the early 2000s Jackson Gore project, you have an example of how the private sector had to stop spending.

But....this "private ownership" group went from a relatively small operation of Poma lifts at ONE mountain to controlling THREE large resorts with many big improvements. They have done pretty damn well.

 

[SIKSKIER]

Here's what the mountain manager is saying

--------------------------------------------------------------------------------

From: William Mead [mailto:chiefmead@msn.com]
Sent: Monday, May 16, 2011 1:47 PM

Subject: FW: HB74 / Senate vote approaching
Dear CMSP Team members,

Please note the email below from JD and the attached document.

The pro-lease folks are at it again and essentially "slipped it through the back door"
by changing a Bill whose intent was to adjust ages related to ticket pricing.

I can not understand, nor want to know what goes into the making of "politics or sausages"

Regardless of your position, I urge you to review the attached in detail, respond to the appropriate folks (in your own words and on your own computer) if you desire.

Also, feel free to pass it along to others who have an interest in Cannon.

Thanks,

Subject: HB74 / Senate vote approaching
Date: Mon, 16 May 2011 13:30:12 -0400
From: john.devivo@dred.state.nh.us
To: chiefmead@msn.com; hamiltons4@myfairpoint.net; Stefanie.Warsnip@centerplate.com; sandy@adaptivesportspartners.org; irvfountain@yahoo.com
CC: greg.keeler@dred.state.nh.us

Bill / Trevor / Stef / Sandy / Irv –

I don’t see you folks daily, so I’ve attached the internal memo sent out this morning re: HB74. Please feel free to share it with your team members.

Should any or all of them choose to contact any or all NH Senators, I again ask that they must be very respectful and write on their own time and write on their own PC’s… and that they utilize their own words – whether they’re for leasing or against it.

Thanks – JD
John M. DeVivo, General Manager
Cannon Mountain Aerial Tramway & Ski Area
Franconia Notch State Park
(603) 823-8800, x-790 (office)
(603) 823-8088 (fax)
(603) 545-7741 (cell / e-mail / text)
www.cannonmt.com / www.franconianotchstatepark.com


Cannon Mountain Aerial Tramway & Ski Area
Franconia Notch State Park

May 16, 2011

To: Cannon / FNSP / FSC / Centerplate / ASPNC Team members
From: John DeVivo (JD)
Re: HB74 (pro-lease legislation)


It’s no secret at this point that those who seek to lease / privatize Cannon are at it again. This time around, our own piece of proposed legislation to streamline our season pass processes (HB74) was stripped clean in the NH Senate, and then pro-leasing language was substituted in its place.

I’ve studied this issue for nearly four years, and I believe that operationally, logistically, historically, emotionally, socially, rhetorically, and most importantly financially, a leasing agreement is NOT in the best interests of Cannon and/or Franconia Notch State Park. As I’ve stated on three prior occasions, I will not force my opinion on our team members. My own opinion is just that – what I feel is best for the long-term health of the company and the ‘Notch.

Here’s my official position:

• Cannon is healthy and thriving as a self-funded agency, as is FNSP
• Cannon and Franconia Notch State Park, as self-funded agencies, have no impact on the general fund
• Cannon has reversed its $1.5 million deficit since 2007, and will close FY11 with nearly $1 Million in profit
• Cannon is the primary revenue driver for both FNSP and the NH Division of Parks & Recreation
• Cannon is the core of FNSP; separating the two entities will have dramatic negative results on both FNSP and the Division
• Cannon's net profit will outperform the annual Sunapee lease payment in FY12
• Cannon’s resurgence and marketplace momentum has the company poised for even greater success as the economy rebounds
• Cannon's commitment to NH residents and organizations, military members and veterans, and the public at large, may change dramatically under a leasing agreement
• Cannon's commitment to its partners (ex. FSC, Centerplate, ASPNC, etc.) may change dramatically under a leasing agreement
• Cannon's pricing structure and commitment to value may change dramatically under a leasing agreement
• Cannon's employment, wage and benefit structures may change dramatically under a leasing agreement
• Cannon’s commitment to the character and integrity of the 'Notch may change dramatically under a leasing agreement
• Cannon's commitment to environmental groups, veterans' groups, etc. may change dramatically under a leasing agreement
• A lease would likely be in effect for 10 - 40 years here within the ‘Notch

Notable anti-lease position: Notable pro-lease position:

Governor John Lynch Executive Councilor Raymond Burton (District 1)
George Bald, DRED Commissioner Senator John Gallus (District 1)
DRED / NH Parks & Recreation Senator Chuck Morse (Senate Finance Committee Chairman)
Cannon Mountain Advisory Commission
Board of Selectmen, Franconia
Friends of Franconia Notch State Park
Society for Protection of NH Forests

Should HB74 be passed in the Senate, it’s believed that it’ll very likely be passed in the House of Representatives after a Committee of Conference and a vote on the floor. If HB74 becomes law (whether with or without the Governor’s signature), then Commissioner Bald will be required to construct an RFP (Request for Proposal) with the intent of finding a partner and securing a lease contract to take effect on July 1, 2012.

The Senate vote on HB74 is very nearly at hand. Should you have an opinion on the leasing of Cannon (whether for it or against it), then I encourage you to act quickly by contacting ALL twenty-four (24) New Hampshire Senators directly within the next week or so. Please be certain to do so from home, on your own time and on your own PC. You’ll find the Senate roster (with both e-mail and home addresses) at www.nh.gov. Whether you write in favor of leasing or against it, I very strongly encourage you to do the following:

• Write in your own words and avoid using bullet points and/or form letters
• Be courteous and show respect for these Senators’ service to the State of New Hampshire
• Avoid any and all disrespectful, harsh, threatening, or derogatory language
• Offer your thanks for their consideration

Thanks as always for your efforts and passion.

 

[deadheadskier]

You really want to make that statement? Their first new lifts at Okemo were 1983-84, when the economy was booming. They were already in the midst of an expansion when the brief 1990-91 recession hit. With the early 2000s Jackson Gore project, you have an example of how the private sector had to stop spending.

way to back peddle

1983 the economy was not 'booming', it was when the economy first started to grow after a massive recession. Mortgage rates were still through the roof, so it's not like people were out there

FACT: Private operators were investing in their areas exponentially more than what Cannon was doing at it's State run areas during the 80s and 90s when those three small areas met their demise.

The State had nothing to do with those areas failing. All three had greater physical assets than a place like Pat's Peak which managed to survive. They failed due to mismanagement and lack of financial resources. A reborn Crotched is doing just fine today competing against a far more developed Sunapee today than when the State ran it.

Your theory is about as believable as the earth being flat. It makes zero sense.

 

[threecy]

I will agree that state ownership may be a factor, but it was not a nail in the coffin. These areas went for years and decades against Cannon and Sunapee. The impacts of labor expenses, energy costs (a HUGE increase in the 1970's), insurance, and weather all played much more into the equation. You also aren't considering size or vertical drop.

Temple, Tenney, Crotched, the Highlands, Ragged, and the King Ridge were all sizable - either in terms of facility size or skier visits. Prior to the Haystack/Ascutney closure, this region had the highest concentration of (for lack of better term) defunct high capacity chairlifts.

a relatively small operation of Poma lifts at ONE mountain

That's inaccurate. In 1977-78, half a decade before the Muellers took it over, Okemo skied 176,000 and had 3 chairlifts.

1983 the economy was not 'booming', it was when the economy first started to grow after a massive recession. Mortgage rates were still through the roof, so it's not like people were out there

In 1983, interest rates were about half of what they were a few years earlier. GDP growth was surging. Check your facts.

FACT: Private operators were investing in their areas exponentially more than what Cannon was doing at it's State run areas during the 80s and 90s when those three small areas met their demise.

Fact? That statement makes no sense.

A reborn Crotched is doing just fine today

Definitely thread drift, but if you look at the Peak Resort financials, you'll see Crotched isn't making money.

 

[deadheadskier]

FACT: Private operators were investing in their areas exponentially more than what the State of NH was doing at it's areas during the 80s and 90s when those three small areas met their demise.

typo

and it's 100% true. There is every reason to believe that private operation of the State run areas would have crushed Crotched, Temple and King Ridge far quicker than the big bad State of NH.

I give you a lot of credit for making some strong pro-lease arguments, but your theory that the State killed Crotched, King Ridge and Temple and that somehow those areas would've survived against private competition is beyond ridiculous. So much so, that it takes away credibility from your well thought out pro-lease stance.

We get that you hate the government, but generating phony theories like this one just makes you look Glen Beck crazy.

 

[threecy]

your theory that the State killed Crotched, King Ridge and Temple and that somehow those areas would've survived against private competition is beyond ridiculous.

That's not my theory. My theory, again theory, is that the triangle of government owned and operated ski areas in the market of these advanced ski areas may have been a significant factor in their demise. I deserves a thread of its own...with the exception of Tenney, Cannon on its own would have had little effect on these areas when they went under. The question is, from a historical perspective, why did such major ski areas located in a market with significant population to draw from, go under in a relatively short amount of time.

 

[deadheadskier]

one word: mismanagement

 

[thetrailboss]

Trailboss - my hypothesis about those NELSAP areas is in regard to the triangle of government run areas they were in/near during their demise.

The most advanced NELSAP ski areas fell within the government run ski area triangle market in New Hampshire.

There is no concentration of lost multi-chair, triple/quad/etc. NELSAP areas in such a short time period as there has been in the Gunstock/Sunapee/Cannon market.


Cannon has millions of dollars of assets and hundreds of thousands to millions of dollars of annual capital investments. The Sunapee lease dollars, for instance, are apparently pumped into Cannon. I'm not sure how they're showing that on the ski area income statement, but will hopefully find out soon. Other significant investments are bonded, so they also don't show on the income statement the way they would for any other ski area having to get a loan (*cough* Peak Resorts). It certainly tells you something when it takes half a decade of good snow years to pay off rolled over deficits.


King Ridge is almost literally in the shadow of Sunapee. The lift you reference was installed within a year of Sunapee and Gunstock installing a combined *6* brand new lifts.

Temple had been around since the 1930s and had a quad. Peak Resorts looked at it after Sunapee was privatized/before they jumped on Crotched West.

Crotched didn't come back until after Sunapee was privatized, and even then only 1/2 came back. Crotched was once the largest ski area in Southern New Hampshire.

Highlands was almost literally in the shadow of Gunstock. The ownership I was aware of ran out of money and wasn't an older family. They had a nice triple chairlift there.

Tenney's undoing was probably in the 1980s...they've had so many PR nightmares that it would be hard for any non-heavily-capitalized group to make a go of it.

It's not a fact, it's a theory, and you'll note I used words such as 'hypothesis.'

That particular market has long been a question mark in lost ski area research, in that quite a few advanced ski areas in proximity to each other and significant population went out of business. Each of those areas was in that rough triangle of then-government run areas. The thing you're missing is that, even in the worst years, the government areas were getting bailed out and seeing additional investment. Privately leased areas still have to deal with real world consequences.

It seems pretty clear to me that you are making the argument that the reason why your cited areas failed was because of the government's role in the marketplace. Now I read you to be backpeddling and saying that it was a reason for their failure. There is a big difference there.

 

[BLESS]

I would just like to say, it took me 3 days, and various trips to this site....but I had a great time reading this entire thread. Some of the posts were funny, some insulting, some funny because they were insulting. But mostly, its an informative and thought provoking one. I personally dont want to see cannon leased....Im all set with it becoming more "mcdonalds". if you will and believe me, no matter who gets to run it, or what they say, it WILL change...IMO, not for the better.....as for the theory of the government areas putting the other areas out of business, its an interesting one....but I HIGHLY doubt that is the case....did it play a role? possibly. If it did, I would guess a VERY small one.

while I realize its not a very good comparrison, I live in Rhode Island, there is one state run university (URI), and 2 state run colleges (RIC, CCRI))....last I checked, the "private" colleges (PC, Brown, Bryant, Salve Regina, Johnson & Wales) were doing just fine. If you're theory rang true, wouldnt all state run businesses be putting private businesses outta business? I know that it doesnt really relate to the "traingle" you talk about, as obviously they're two different areas, but threecy yours is an extremely general and loose theory (albeit interesting)...so I figure if you can make one, so can I.




I dont get the whole thing.....even tough it doesnt, so what if cannon operates in the red EVERY year....wouldnt you rather have to spend some more of your tax dollars to keep such a cool place (from becoming loon north) running than instead have to pay them towards some more bloated state/municipal disability pensions or some mother who just keeps pumping out kids to get more state assistance? I know I would. What I mean is, you're gonna get taxed anyway...theyre going to keep going up anyway, why not have them at least go, in part to somewhere that is,IMO worthwhile?

With all that said, it IS a little lame, that wednesday is the chosen day for NH resident discounts, sure Id have no problem with playing hooky or whatever if I felt like it, but for some people thats just not feasible.....I think they should offer a reduced rate....say 10-20% to NH residents on the weekends also.Im sure the $5-15 less they would get on the ticket could me easily made up on food or drink.... Do other places do this? Ill assume no...but then again, other places arent run by the state...

 

[threecy]

I personally dont want to see cannon leased....Im all set with it becoming more "mcdonalds". if you will and believe me, no matter who gets to run it

Including the government. Cannon is no Mad River Glen at this point. Look at what they've done with the HSQ, the Profile slope, Mittersill, etc.

wouldnt you rather have to spend some more of your tax dollars to keep such a cool place I dont get the whole thing.....even tough it doesnt, so what if cannon operates in the red EVERY year....

Apparently the people of Rhode Island didn't think this when they gave up on Diamond Hill.

With all that said, it IS a little lame, that wednesday is the chosen day for NH resident discounts, sure Id have no problem with playing hooky or whatever if I felt like it, but for some people thats just not feasible.....I think they should offer a reduced rate....say 10-20% to NH residents on the weekends also.

A little secret...Cannon hasn't remained state owned and operated for the benefit of hardworking taxpayers.

 

[BLESS]

agreed about the first part...how its no MRG, they have done a lot...with MITT & the HSQ...but I fear it would be even worse privately run...

I wish Diamond Hill was still here, personally.


I was agreeing with you on the weds thing....I too think it could be another day, or something else, like weekend discounts.

Out of curiosity, do you have a vested interest in it becoming leased? Are you going to be the one running/leasing it? Is someone you know? I just dont get why with all thats wrong with government these days, you choose to focus on a thing we all love...why not go after the million other things the gov wastes $ on, or things you feel they shouldnt have a hand in.... or do you do that also, elsewhere?

 

[threecy]

agreed about the first part...how its no MRG, they have done a lot...with MITT & the HSQ...but I fear it would be even worse privately run...

Any fears about that can and likely would be addressed in the lease - a lease agreement could literally forbid the operator from cutting a single tree.

Out of curiosity, do you have a vested interest in it becoming leased? Are you going to be the one running/leasing it? Is someone you know?

My only interest in it is as a resident who pays taxes who spent a decade in the ski industry. I have no involvement with anyone working on a lease.

I just dont get why with all thats wrong with government these days, you choose to focus on a thing we all love...why not go after the million other things the gov wastes $ on, or things you feel they shouldnt have a hand in.... or do you do that also, elsewhere?

This is a skiing forum with a no politics rule. I am indeed opposed to other forums of government waste.

 

[BLESS]

Any fears about that can and likely would be addressed in the lease - a lease agreement could literally forbid the operator from cutting a single tree.



My only interest in it is as a resident who pays taxes who spent a decade in the ski industry. I have no involvement with anyone working on a lease.


This is a skiing forum with a no politics rule. I am indeed opposed to other forums of government waste.

I realize what you mean with your lease agreement point..however, I would counter that look at almost any person leasing a car/house/whatever.....does the person who leased it to them actually check on them to see that they are indeed following the rules of the lease? Or do cars and house routinely get trashed/changed/altered by the lessee? People who lease things generally dont care/take care of what their leasing because its "not theirs". Would the same thing happen at Cannon?


. Well I am certainly not here to stir the pot....I dont want the place leased, you do. I am not a NH resident and probably only have skied cannon 8-10 times...my opinion is kinda useless...however, what I saw/experienced while I was there was fine with me....

.Im always curious to hear other peoples views/feelings on things....I like to know why people feel the way they feel. You have made a decent argument. I dont agree, but that doesnt mean you dont have some valid points.....good job on keeping on top of your government...I am not anti gov, ....but I do feel there is tremendous waste within, and see it daily. I just think there are many other places I would start with first....maybe in a perfect world, go after Cannon..but im sure there are plenty of other areas to "trim the fat" first.

 

[threecy]

I realize what you mean with your lease agreement point..however, I would counter that look at almost any person leasing a car/house/whatever.....does the person who leased it to them actually check on them to see that they are indeed following the rules of the lease? Or do cars and house routinely get trashed/changed/altered by the lessee?

I don't think it can be compared to a car - a car is a rapidly depreciating item, whereas a ski area lease appreciates and needs to continue to generate income. Lessees are generally very closely monitored.

People who lease things generally dont care/take care of what their leasing because its "not theirs".

You've just backed into why government needs to be limited - it's not really 'theirs' - if something breaks at a government institution, no big deal - you get a new one. If something breaks at Sunapee, it comes out of the lessee's pocket.

I just think there are many other places I would start with first....maybe in a perfect world, go after Cannon..but im sure there are plenty of other areas to "trim the fat" first.

This approach has been taken too long in New Hampshire - Concord can't afford to punt issues any longer. Rather, they need to go after all options.

This isn't just about preventing New Hampshire taxpayers from having to foot the bill on losses in bad snow years. This is also about saving New Hampshire taxpayers from having to continue to invest tens of millions in the ski area. If past replacement schedules are replicated, taxpayers will be called upon to replace chairlifts and the tram in the next decade or two - $$,$$$,$$$+