Peak Resort Acquisitions

[mbedle]

Its not Magic. During the last Quarterly telephone conference, Jim was specifically asked that questions and he respond:


Barton Crockett - FBR Capital Markets
Okay. All right. Well that sounds encouraging nonetheless. I think there has been some press reporting about one not enough in the Northeast Magic Mountain that is in some type of ownership transition process that maybe something that we can exclude from the list or not and I was just wondering if you can make any comment about that Mountain in particular?

Tim Boyd - President and CEO
We're not involved that I can make that comment.

A couple of other comments made by Peaks - they apparently mentioned during the summer that they were looking at owner financing to acquire a new resort. That would seem to fit in with Saddleback, given how much money the Berry Family has.

And someone made a comment about Peaks not being involved in real estate at their resorts and that is why Saddleback doesn't make a good fit. Correct me if I am wrong, but isn't Peaks involved in real estate development at Mount Snow with a proposed 900 units at build out? Also, doesn't the sale of saddleback includes only a limited amount of real estate/real estate potential. I thought I read that the owners are keep a large portion of the developable land.

 

[drjeff]

But they're building a huge development at Carinthia.

After nearly 10 years of ownership and 10 years of upgrades, yup, they will start building some solo ownership townhouses in multiple phases with a 20+ year build out plan.

Far different than when a ski area developer comes in and build multiple hundred rooms of hotel/condo-tel space at once.

Additionally the master plan has residential development planned not just at Carinthia, but across a good chunk of the general base area regions over the life of the master plan build out. This is a slowly phased in process that Peak has planned for Mount Snow, not a build it 1st and hope they'll come later scenario

 

[jimk]

Double diamond post #36 made me laugh
As fun as it would be to see Magic go all modern, I hope Peaks buys Saddleback. Along with Wildcat that would give them two of the prettiest darn ski areas in the Northeast.

 

[slatham]

DoubleDiamond
$1.5M purchase price and $13.5M in improvements will go a long way.

* $2.5M for new water pipes across the mountain
* $5M for 150 fan guns (that's about half of the fan guns they'd need if 100% towers)
* $6M in new lifts

Sweet Baby Jesus, Lord Have Mercy, a Good Fucking Ski Area If So.

So Magic would be homogenized like Mt Snow, Stratton and Okemo? Tell me you're kidding.

 

[yeggous]

So Magic would be homogenized like Mt Snow, Stratton and Okemo? Tell me you're kidding.

and you would rather the status quo? what does that mountain look like in a low snow year? I have a hard time believing they have much life left in them. would you rather it closed?

you're not going to get a sugar daddy to maintain the place if it is not profitable. someone like Peak Resorts will at least make sure that the place stays open. without a multiresort operator I don't see them staying in business much longer.

Magic is worth much to Peak Resorts than other operators. they've already changed the way the New Hampshire market operates by forcing the other mountains to team up with White Mountain Super Pass in order to compete with the Granite Pass. If they pick up another mountain or two in Vermont they could do the same there.

 

[Tin]

$1.5M purchase price and $13.5M in improvements will go a long way.

* $2.5M for new water pipes across the mountain
* $5M for 150 fan guns (that's about half of the fan guns they'd need if 100% towers)
* $6M in new lifts

Sweet Baby Jesus, Lord Have Mercy, a Good Fucking Ski Area If So.

A Mittersill-like double for "The New Red" and a HSD triple for "The New Black" with snowmaking on Red Line, Black Magic, and all marked gladed areas. As well as a beginner area, Green chair, and giving back all co-op/share holder money/donations plus 25%.

 

[steamboat1]

I don't think Magic even with improvements would be all that profitable. Bromley with it's HSQ & backside triple has struggled financially from what I understand. Not to mention they already have above average snowmaking capabilities & a pretty vibrant summer business as well. They practically give their weekday tickets away trying to get people on the mountain. That's just my opinion.

 

[Newpylong]

Quad on the back of Bromley...

 

[thetrailboss]

OK, so as someone pointed out, Boyd said that Magic was not the target. We can let that go. So what is left? Waterville Valley and Saddleback we think. Any others that are flying below the radar? One that has been on the market for a long time is Bolton. In some ways it fits their model (a locals resort) but its location and access road are big problems.

 

[steamboat1]

Quad on the back of Bromley...

Oops you're correct (FGQ)

 

[deadheadskier]

Newenglandskihistory says there are two rumored areas in Maine. I wonder who the second might be if it's assummed the first is Saddleback.

Shawnee really fits Peaks profile with its proximity to Portland and night skiing business. It probably also has a value in the same price range as Saddleback. Abram would be much cheaper. Can't think of anything else.

Adding Shawnee to the MWV portfolio really creates a dominating product over the Superpass if you ski in that area.

 

[steamboat1]

OK, so as someone pointed out, Boyd said that Magic was not the target. We can let that go. So what is left? Waterville Valley and Saddleback we think. Any others that are flying below the radar? One that has been on the market for a long time is Bolton. In some ways it fits their model (a locals resort) but its location and access road are big problems.

Only problem with Bolton's location is it's nestled between two powerhouses in VT. skiing (Sugarbush & Stowe). Hard to draw skiers away from those two. It's actually the easiest of the three to get to off I-89 but that hasn't helped. Burlington is close but not really a big enough city to draw from, besides Smuggs is about the same drive. The access road isn't bad. I actually find it quite picturesque especially when leaving with it's views of Camels Hump.

 

[thetrailboss]

Only problem with Bolton's location is it's nestled between two powerhouses in VT. skiing (Sugarbush & Stowe). Hard to draw skiers away from those two. It's actually the easiest of the three to get to off I-89 but that hasn't helped. Burlington is close but not really a big enough city to draw from, besides Smuggs is about the same drive. The access road isn't bad. I actually find it quite picturesque especially when leaving with it's views of Camels Hump.

Have you driven it in a snowstorm?

 

[thetrailboss]

Newenglandskihistory says there are two rumored areas in Maine. I wonder who the second might be if it's assummed the first is Saddleback.

Shawnee really fits Peaks profile with its proximity to Portland and night skiing business. It probably also has a value in the same price range as Saddleback. Abram would be much cheaper. Can't think of anything else.

Adding Shawnee to the MWV portfolio really creates a dominating product over the Superpass if you ski in that area.

Shawnee would be interesting.

 

[ThinkSnow]

Have you driven it in a snowstorm?

I have, and its not that bad. The real downside of the access road is the bumper-to-bumper traffic at the end of the day.

 

[yeggous]

Shawnee would be interesting.

It makes a lot of sense. Pick up two Maine mountains, package them with the Granite Pass. They take an even stronger position in the North Conway market, and that is a good place to be. It is pretty safe to say that the NoCo is the largest day trip / weekend escape destination in New England, perhaps the East. (Where do people in the Mid Atlantic go for a weekend getaway or buy a second home?)


Sent from my iPhone using AlpineZone mobile app

 

[doublediamond]

Only problem with Bolton's location is it's nestled between two powerhouses in VT. skiing (Sugarbush & Stowe). Hard to draw skiers away from those two. It's actually the easiest of the three to get to off I-89 but that hasn't helped. Burlington is close but not really a big enough city to draw from, besides Smuggs is about the same drive. The access road isn't bad. I actually find it quite picturesque especially when leaving with it's views of Camels Hump.

Hard to draw skiers when your snowmaking capacity is a mere fraction of the other two. Yes they get a lot of snow, but so does every other northern VT ski area. They can only do 500 gpm up from the base and 500 gpm up or down from the mid-mountain pond. Think about that: full bore water maximization: 13-20 ground guns/low E guns or ±6 fan guns. It's pitiful.

 

[steamboat1]

Have you driven it in a snowstorm?

Have you driven 23A leading to Hunter Mountain in a snowstorm? Far worse. Doesn't seem to hurt Hunter though.

 

[doublediamond]

So Magic would be homogenized like Mt Snow, Stratton and Okemo? Tell me you're kidding.

No, not at all. I didn't say anything of the sort.

Magic needs a new FG (at the minimum) lift to the top, a new FG lift to Sun Corner for low-intermediates, and a new bunny lift. And on top of that $6-7M, they need a substantial snowmaking investment, and a park of some resemblance. No need to bulldoze, grade, widen and straighten all the trails. No need to go all Carinthia on the place. But you do need to provide a guaranteed consistent snow on beginner, intermediate, and a couple advanced runs (i.e. Talisman), and some resemblance of a park for the youth. You can't run a ski area successfully on 20k visitors, with the hopes you'll get snow. They need skier visits. They need the additional income from rentals, lessons, and ski school programs. They need the youth and families.

And the only way to do either is to provide a better product (an alternative to the busy other VT resorts) for the low intermediate masses, which is guaranteed snowmaking and grooming on all green and blue trails. The blacks at Magic are a complete different league from other southern VT areas. With a guaranteed product of more than one trail with snowmaking, they can get pass sales and actually make the day ticket price worth while in a low-snow year.

If they take just 1% of visitors away from other VT resorts, they've tripled their skier visits.

 

[thetrailboss]

I have, and its not that bad. The real downside of the access road is the bumper-to-bumper traffic at the end of the day.

Maybe my memory is off, but I recall it being pretty steep and windy. Now not App Gap windy, but close.