Ginn Resorts: Burke Development on Hold

[riverc0il]

If I was Burke Mountain, I'd be working on a backup plan for when/if Ginn dumps their holdings.

If they're losing golf courses in Florida, it can't be too long before they're dumping a ski area in Northern Vermont.

As Burke Mountain employees all work for Ginn, spending any time on a backup plan would seem like a rather negative disposition.

If Ginn dumped Burke, they wouldn't be dumping a ski area but rather a potential four season resort with a golf course as its main draw for housing and condo purchases. Burke was not purchased by Ginn just because of the ski area, though it is a required component to its four season resort aspect.

 

[thetrailboss]

The option is clear: if Ginn backs out, my sources tell me that BMA has first option to purchase the resort back. Not that they want to.....

 

[ski_resort_observer]

If I was Burke Mountain, I'd be working on a backup plan for when/if Ginn dumps their holdings.
If they're losing golf courses in Florida, it can't be too long before they're dumping a ski area in Northern Vermont.

Burke Mtn is owned, managed and operated by Ginn. Not sure what you mean by " If I was Burke Mountain". If they want to dump Burke, agree it's highly possible, then they either walk away and they action it off, again, not very likely. If Burke has a positive EBITDA they might be able to sell it or just try to sell it cheap if it's a big cash loser. Would BMA jump in again, very unlikely.

I would think locals, employees, contractors and vendors connected to Burke are already working on a backup plans.

 

[Phildozer]

Burke Mtn is owned, managed and operated by Ginn. Not sure what you mean by " If I was Burke Mountain".

I mean "Burke Mountain" to be anyone working there and interested in preserving the mountain in the event that Ginn fails or decides to sell.

 

[thetrailboss]

Burke Mtn is owned, managed and operated by Ginn. Not sure what you mean by " If I was Burke Mountain". If they want to dump Burke, agree it's highly possible, then they either walk away and they action it off, again, not very likely. If Burke has a positive EBITDA they might be able to sell it or just try to sell it cheap if it's a big cash loser. Would BMA jump in again, very unlikely.

I would think locals, employees, contractors and vendors connected to Burke are already working on a backup plans.

Again, there would not be an auction. BMA has an option and would (probably be forced to) exercise it in order to preserve the school. They don't want to do that of course.

And for those who didn't know it or attend, the 2000 auction was a farce at best. It was rigged. There was a buyer who was ready, willing, and able to take it over, but the bank holding the mortgage played some dirty tricks and the auction was run in a way that was confusing and left people not sure who owned what. The area was on NELSAP for about a month before a very influential friend of BMA stepped in and handled the situation.

 

[ski_resort_observer]

Again, there would not be an auction. BMA has an option and would (probably be forced to) exercise it in order to preserve the school. They don't want to do that of course.
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Exactly, BMA would only consider it if it was the only option. They need it to be open so another auction is one way to find a buyer especially considering that putting on the market could take a long time to find a buyer. They don't need the whole resort open, just a lift and some terrain to train on. Which is another option. I would think that BMA could care less if Burke expands, they just need it to be open.

 

[thetrailboss]

Exactly, BMA would only consider it if it was the only option. They need it to be open so another auction is one way to find a buyer especially considering that putting on the market could take a long time to find a buyer. They don't need the whole resort open, just a lift and some terrain to train on. Which is another option. I would think that BMA could care less if Burke expands, they just need it to be open.

I don't think you are understanding me, SRO. BMA has an "Right of First Refusal," or an "Option" to purchase the resort if things do not proceed. It is legally binding option [EDIT] legally binding in that BMA cannot be shut out of any sale. It has to be consulted/approached first before another entity can buy the mountain.

Sorry I did not clarify.

So again, if the thing does not proceed, BMA by default would get the resort back (much to their chagrin).

 

[Tin Woodsman]

I don't think you are understanding me, SRO. BMA has an "Right of First Refusal," or an "Option" to purchase the resort if things do not proceed. It is legally binding....

Sorry I did not clarify.

So again, if the thing does not proceed, BMA by default would get the resort back (much to their chagrin).

Then you are describing it incorrectly. By definition, if it's an "option", BMA would have some choice in the matter whether to exercise it or not. As a practical matter, it would be difficult for them to not exercise it if they want to stay in business and not train at the LOC, but it's still an option.

 

[thetrailboss]

Then you are describing it incorrectly.

No I am not. The context was confusing. I am clarfying what we are all saying. The right of first refusal is legally binding in that BMA cannot be shut out of the process. That is what I meant. I did not mean to say or imply that BMA legally has to buy the resort.

By definition, if it's an "option", BMA would have some choice in the matter whether to exercise it or not.

Yes, but again, BMA or the entity related to BMA, carved out the ROFR in the Sales Agreement with Ginn. That is what I am saying.

As a practical matter, it would be difficult for them to not exercise it if they want to stay in business and not train at the LOC, but it's still an option.

We are all in agreement there. BMA has an contractual option; it has a right to decide if it wants the resort or not. But as a matter of practicality, it has no other route but to buy the resort if things go bad.

 

[madskier6]

But I think the point is that if BMA declines to exercise their option (for whatever reason), then Ginn could put Burke up for auction. As Tin said, perhaps that will never happen because they need a place to train their students but you never know.

Perhaps BMA does not want to own it in the first instance & wants to see if someone else might come in & buy it. Perhaps BMA thinks they might be able to purchase it cheaper at an auction than the price specified in the ROFR. There could be a lot of factors which might lead BMA to not exercise their option.

 

[thetrailboss]

But I think the point is that if BMA declines to exercise their option (for whatever reason), then Ginn could put Burke up for auction. As Tin said, perhaps that will never happen because they need a place to train their students but you never know.

Perhaps BMA does not want to own it in the first instance & wants to see if someone else might come in & buy it. Perhaps BMA thinks they might be able to purchase it cheaper at an auction than the price specified in the ROFR. There could be a lot of factors which might lead BMA to not exercise their option.

Yep. Any of that could happen. My understanding is that the 2005 sale was done in such a way that the 2000 debacle (theoretically) could not happen again. BMA needed some security that the ski area would remain open. Hence the ROFR.