Receiver Announces that Burke has a Stalking Horse Bid and Deal will Close by End of 2024

[deadheadskier]

Most hotels need to be at a 50-60% occupancy rate to break even. It's the 40% figure as to why I suggested it get retrofitted to be lesser units, but more spacious condos. Turn those 116 hotel rooms into 58 one bedroom condos. Full disclosure: never been in the building and don't know the room sizes. I'm just assuming a typically sized hotel room.

The association might not like the competition and what it will do to their home values, but you know what will hurt their values more? A closed ski area. That hotel at only 40% occupancy could do that.

 

[thetrailboss]

Most hotels need to be at a 50-60% occupancy rate to break even. It's the 40% figure as to why I suggested it get retrofitted to be lesser units, but more spacious condos. Turn those 116 hotel rooms into 58 one bedroom condos. Full disclosure: never been in the building and don't know the room sizes. I'm just assuming a typically sized hotel room.

The association might not like the competition and what it will do to their home values, but you know what will hurt their values more? A closed ski area. That hotel at only 40% occupancy could do that.

The units are already pretty big. We spent a week up there in June 2023 and I was really impressed. And I do think that there is some credence to the suggestion that Q's "plan" was to have them potentially converted to condos.

I was also hoping that somone could put into perspective what the occupancy rate would need to be to make money. I figured that they were losing money. Perhaps now being on Indy will help the numbers.

 

[halfpintvt]

Update. These guys are officially out (they were as it was anyways). They’re saving face by saying that they can’t do anything with the Hotel due to restrictive land covenants. That’s only half of the story.

The bombshell is that the Hotel technically is illegal because Q built it on land that was deeded as “common area” by Doug Kitchell way back in the 1970’s when he drew up the master plan and subdivided the land. So any homeowner or condo owner that is part of the “Association” that he created has an interest in the land where the Hotel sits. Q just ignored that legal mumbo jumbo and went full steam ahead. So the Hotel can’t be sold or used for a private interest without resolving this issue (paying off the association or getting their blessing). So the plans to sell units as condos ran afoul of the interests of the Association owners and these bidders weren’t going to get their approval and for good reason. The Association owners don’t want 116 condos dumped on the market thus devaluing their property. I completely understand.

That’s why earlier this year these bidders were trying to win favor with the Association and encouraging them to have that petition. But I, and others, stand by the harsh assessment that this crew did not have the community’s interest in mind. They were looking for a quick buck—or $100 mill or so in profit from condo sales and little to no investment in the mountain. Firestone and Greenberg talk “tough” developer talk that I’ve heard before. Good riddance. I, for one, will never ski at their other resorts after this poorly orchestrated media circus that really hurt the mountain and the community and created some inappropriate accusations and unnecessary tension.

This revelation completely explains the issues with why the Receiver can’t sell the place and even then why the buyer has to be someone who can work with the Association and is a known quantity. In other words, the Grahams.

A fair number of commenters at the event last week also made a good point that the Hotel does create jobs and is better for the community. Even if it is currently at 40% occupancy.

The Q just keeps on giving…..

https://www.northstarmonthly.com/fe...cle_4f6afa2c-011d-11f0-ac2e-c7a1f6bb1a19.html

Many years ago, when the Receivers team of people first met with Town Officials, I tried to explain that Quiros built his grand hotel on land that he did not own. It was the listers equivalent of an "unlanded mobile home" My information was met with skepticism and dismissed. Now, 9 years later it is affecting the sale of the mountain. Let's hope that terms can be negotiated with all the players that will allow a sale to go forward with a buyer who will be a "friend of Burke".

 

[sull1102]

This all feels like it’s not going in the right direction for the 10-20 year future of the mountain. Shouldn’t there be some concern around how this is all going to pan out long term. I look at Sugarbush with Win coming in and running it out of love(and obviously money) and when his coffers were depleted Alterra was interested in coming in. Feels like a similar situation could play out here where local ownership could be great for 5 years, but 15 years from now when the time comes will there be anyone looking to take it over? It’s not like Magic where the terrain and pow days are legendary and the infrastructure is a bit cheaper to run and maintain unlike two HS quads.

 

[2planks2coasts]

This all feels like it’s not going in the right direction for the 10-20 year future of the mountain. Shouldn’t there be some concern around how this is all going to pan out long term. I look at Sugarbush with Win coming in and running it out of love(and obviously money) and when his coffers were depleted Alterra was interested in coming in. Feels like a similar situation could play out here where local ownership could be great for 5 years, but 15 years from now when the time comes will there be anyone looking to take it over? It’s not like Magic where the terrain and pow days are legendary and the infrastructure is a bit cheaper to run and maintain unlike two HS quads.

Burke has twice the annual snowfall of Magic. Don't get me wrong, Magic is a great little mountain, but Burke with the right ownership is in a different league.

 

[thetrailboss]

This all feels like it’s not going in the right direction for the 10-20 year future of the mountain. Shouldn’t there be some concern around how this is all going to pan out long term. I look at Sugarbush with Win coming in and running it out of love(and obviously money) and when his coffers were depleted Alterra was interested in coming in. Feels like a similar situation could play out here where local ownership could be great for 5 years, but 15 years from now when the time comes will there be anyone looking to take it over? It’s not like Magic where the terrain and pow days are legendary and the infrastructure is a bit cheaper to run and maintain unlike two HS quads.

10-20 years? Burke can only be thought of in 3-5 year increments at most. Since Kitchell lost it in 1987 or so, each owner has lasted, in respective order:

2 years
2 years (creditor bank)
4 years (owner never had any intention of running it other than to launder money)
5 years (Northern Star)*
5 years (Burke 2000)*
7 years (Ginn and LA)*
4 years (Q)*
9 years (receiver)*

Give or take, that's how it has been.

The likely purchaser has been the only stable force at the mountain since 1995. Just operating in the background until recently. The "*" denotes the regimes in which the purchaser (the extended family) has played at least some role in operating the mountain or at least backstopping it for BMA.

 

[deadheadskier]

Burke has twice the annual snowfall of Magic. Don't get me wrong, Magic is a great little mountain, but Burke with the right ownership is in a different league.

It's not as simple as just having more ample snow. I'd say the terrain between the two is a wash.

If Magic's location is a 10, Burke's is a 5. Not only is Magic hours closer to the major metros, it has several major ski areas right nearby to entice new visitors from.

And I'm a big Burke fan that does think it can be viable with better ownership.

 

[2planks2coasts]

It's not as simple as just having more ample snow. I'd say the terrain between the two is a wash.

If Magic's location is a 10, Burke's is a 5. Not only is Magic hours closer to the major metros, it has several major ski areas right nearby to entice new visitors from.

And I'm a big Burke fan that does think it can be viable with better ownership.

That little Southern VT cluster is nice. Burke's position isn't too shabby either if properly marketed. 1 hr to Jay or Cannon. Same distance to Boston as Magic, but almost all freeway. If I was looking to purchase a ski resort for the next 20 years, and had to pick between Burke and Magic, it would be Burke. Easily.

 

[Hastur]

Burke has twice the annual snowfall of Magic. Don't get me wrong, Magic is a great little mountain, but Burke with the right ownership is in a different league.

Wait what?

I thought one of the big issues with burke is that it doesn't snow there. At least not like other northern VT mountains, with it being a monadnock.

I see all sorts of annual snowfall amount for burke - anywhere from 135'' average to 217'' - non of them double.

burke claims 158'' this year to magics 122''

I don't know how magic would be considered a 'little mountain' compared to Burke. Burke is really a 1600ft vert mountain.

similar acreage and vert once you remove the area below mid burke. lets be real, noone is skiing below mid burke.

 

[2planks2coasts]

Wait what?

I thought one of the big issues with burke is that it doesn't snow there. At least not like other northern VT mountains, with it being a monadnock.

I see all sorts of annual snowfall amount for burke - anywhere from 135'' average to 217'' - non of them double.

burke claims 158'' this year to magics 122''

I don't know how magic would be considered a 'little mountain' compared to Burke. Burke is really a 1600ft vert mountain.

similar acreage and vert once you remove the area below mid burke. lets be real, noone is skiing below mid burke.

Burke is a great "little mountain" as well. It is a slightly taller one than Magic though.

When you're in the shadow of Jay, it certainly seems like it doesn't snow, but it's still more than Southern VT.
On the Snow puts Magic's average at 107".

Burke, VT town website says 218" (For the record, OtS has Burke at 145"))

https://www.burkevermont.org/about-the-town-burke-vermont

Guessing neither are true. Anecdotally, Burke has much better snow.


And a great many people ski below mid Burke. Not me or likely you, but the natural segregation of easier terrain is a huge advantage that Burke can use to market to families and such.

 

[thetrailboss]

Burke is a great "little mountain" as well. It is a slightly taller one than Magic though.

When you're in the shadow of Jay, it certainly seems like it doesn't snow, but it's still more than Southern VT.
On the Snow puts Magic's average at 107".

Burke, VT town website says 218" (For the record, OtS has Burke at 145"))

https://www.burkevermont.org/about-the-town-burke-vermont

Guessing neither are true. Anecdotally, Burke has much better snow.


And a great many people ski below mid Burke. Not me or likely you, but the natural segregation of easier terrain is a huge advantage that Burke can use to market to families and such.

Historically, Burke has been at 250" but lately it has been less..........

 

[abc]

Wait what?

I thought one of the big issues with burke is that it doesn't snow there.

The worst snowfall record of northern VT is still better than the best of southern VT.

The best of Catskill or Berkshire is still no match to the worst of VT.

The list goes on… but you get the drift.

Compared to the other northern VT mountains, Burke “doesn’t snow there”. The problem being, a lot of people don’t want to (or don’t have time to) drive those extra hour to get to Burke. And those who do drive the extra hour, got “diverted” to Jay, Canon, Stowe, Bolton…

 

[Big Wave Dave]

The worst snowfall record of northern VT is still better than the best of southern VT.

The best of Catskill or Berkshire is still no match to the worst of VT.

The list goes on… but you get the drift.

Compared to the other northern VT mountains, Burke “doesn’t snow there”. The problem being, a lot of people don’t want to (or don’t have time to) drive those extra hour to get to Burke. And those who do drive the extra hour, got “diverted” to Jay, Canon, Stowe, Bolton…

Burke has arguably the best “”snowkeeping”” weather in all VT. The Kingdom is just colder. It rains a lot more in Southern VT than Burke and that impacts snow quality. Snowfall is around 200”. They would be close this year if they counted what fell in November like most places do (they weren’t open).

Burke never averaged 250 and it can be snowshadowed by the greens and the whites, but still manages to nickel and dime its way every year to its average annual.

Not alot of huge storms at Burke but a ton of 1-3”/3-5” type events and they add up.

 

[thetrailboss]

The Caledonian Record is reporting that Ken Graham is leading a group of investors to buy Burke. His family has been a savior of the mountain before.

 

[AdironRider]

Wild he's bailed the place out what, three times before and all of them failed and here he is back again. Why not run it yourself at this point, or why didn't he just keep losing money with one of the prior partners? Either way, I don't get Graham letting them go belly up repeatedly then deciding to reinvest.

 

[thetrailboss]

The ownership group has released an informational handout identifying who they are and their interests. There are no surprises here at all, except maybe for having the HOA/COA now involved directly with the mountain. The stakeholders are:

• The Graham Family;
• The Schaefer Family as the resort operator (BEast);
• BMA as the race and events partner;
• The Burke Mountain Homeowner's Association (community partner).

The handout stated that they expect to invest $10-20 million in the next two seasons to do the following:

• Resolve the backlog of lift maintenance;
• Increase snowmaking capacity and coverage (increase the water storage);
• "Improve" the trails and add new trails;
• Relocate the Willoughby Quad to allow for intermediate terrain accesss and provide access to the Upper Mountain in wind events;
• Improve the IT systems at the Hotel and improve dining options, including reopening a venue at the Sherburne Lodge.

Future development would be concentrated in already developed areas of the resort in order to preserve open space.

The Caledonian Record article:

BURKE — Nine years after being placed under receivership, Burke Mountain appears to be set for sale.
According to information communicated Tuesday afternoon from the Burke Mountain Homeowner’s Association, a group led by Ken Graham, son of former owner Donald Graham, is expected to purchase the 270-acre ski area.
Ken Graham, who attended Burke Mountain Academy (BMA), confirmed that he is leading a group called Bear Den Partners LLC toward a purchase, but there has been no formal sale.
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“(Court receiver Michael) Goldberg has verbally agreed on a price, and then he will need to put that forward in front of the judge once we have completed our due diligence,” Graham said.
“I expect the rough timing is middle of April where we’ve completed our due diligence, and hopefully it gets in front of the judge and by early May we’re closed. That’s what we hope for.”
He said his group “feels confident they are working towards a potential successful conclusion.”
Graham is the Senior Managing Principal and founder of private investment firm Inverness Graham Investments.
His family has a long association with Burke Mountain.
His father, Donald Graham, previously owned Burke from 1999 to 2005.
Donald Graham’s connection to Burke Mountain began when his oldest son attended Burke Mountain Academy (BMA). He purchased a home nearby over 50 years ago, and all five of his children (including Ken) and four grandchildren later attended the academy.
Graham has a long history of supporting both BMA and Burke Mountain, including purchasing the ski area out of bankruptcy in 1999 to prevent its closure and keep the Academy going. In addition to funding this purchase, Graham went on to quietly fund the mountain for five years to cover the operating losses and necessary capital improvements until a resort operator interested in buying the mountain could be found.
When the Ginn Company took ownership, all proceeds from the sale went to BMA, bolstering its endowment and financial stability.
Beyond the sale, Graham contributed significantly to Burke Mountain’s success. When Ginn’s ownership faltered, he helped finance the Mid Burke Express ski lift, believing it would enhance the ski experience and keep the resort viable.
When the mountain was sold to the group headed by businessman Ariel Quiros in 2012, Graham proposed that BMA invest in snowmaking equipment to support the new owners and improve the mountain’s operations, providing over $400,000, mostly through his contributions.
In 2017, Graham also helped secure a modern replacement for the aging Poma lift serving BMA’s training venue. He negotiated a deal that financed much of the purchase and installation of a state-of-the-art Leitner-Poma T-bar.
In recognition of his contributions, Burke Mountain and BMA renamed the trail “Lower Fox’s Folly” to “Graham Slam” and dedicated the T-bar as “The D-Bar” in 2019.
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Over the last several decades, Burke Mountain has faced numerous financial challenges, including seven ownership changes, three bankruptcies, and finally, seizure by the SEC.
Goldberg, of Florida, was appointed as the federal receiver for Burke Mountain and Jay Peak in 2016 when the Securities and Exchange Commission charged Quiros and resort manager Bill Stenger with running a Ponzi-like scheme and misusing $200 million raised from EB-5 investors.
Jay Peak was sold in 2022 for $76 million through a stalking horse bidding process, where a designated bidder sets the minimum price.
Prior to the announced sale this week, Burke Mountain had reportedly suffered from a lack of investment while in receivership.
Frank Adams, a longtime skier and homeowner at Burke Mountain, had launched an online petition urging a Florida judge to expedite the sale of the resort.
Adams and other concerned community members believed that the court-appointed receiver managing Burke Mountain had failed to maintain the resort’s value or sell it in a timely manner. “The mountain is really falling into disrepair, and the value is going down,” Adams said. “I’m worried about them grinding it into the ground.”
In a statement earlier this month, Goldberg offered assurance that Graham (who he did not name at the time) would address those issues and be a good steward.
“[The buyer] is committing to invest many millions of dollars into snowmaking and other improvements that will greatly improve the skiing experience at Burke and will directly benefit the homeowners, business owners and others who rely on the success of Burke Mountain,” Goldberg wrote, adding, “[Graham] has deep roots in the community and will ensure that Burke Mountain will have the stable future it deserves.”
Ken Graham said of the motivation to step up, “We’ve been watching this (mountain ownership and operation) for 50 years and feel part of the community.”
Details shared about Bear Den Partners notes that it “was formed with the goal of aligning key Burke community stakeholders with an interest in purchasing the resort, under a single umbrella.”
The Schaefer family, owners of Berkshire East & Thunder Mountain Bike Park, Catamount Mountain Resort, Big Red Powder Cats, is on board to serve as the mountain’s operating partner. Jon Schaefer has family ties to the area and is co-founder of Bear Den Partners.
An investment entity called Burke Mountain Community Partners was formed to aggregate local community member support.
The information about Bear Den notes a commitment to investing in the mountain’s current and future viability.
“Bear Den Partners has a long-term ownership horizon and is sufficiently capitalized—without the need to sell off Burke’s assets— to take on the significant capital investment required, estimated to be as much as $10 million in the first 24 months and upwards of $20 million longer term,” the statement notes.
The statement emphasizes a philosophy of collaboration, describing the mountain and surrounding community as “one unified Burke.”
“We believe that collaboration and co-operation with other leading Burke organizations and constituents such as BMA, Kingdom Trails, BMOA, season pass holders and the local businesses community is not only preferable but imperative for enduring success,” the statement reads. “Skiers and Riders are more likely to visit a resort that exists within a vibrant community with a variety of recreational and business opportunities to enjoy and the charming nature of the Burke Villages are one of the strengths underpinning the resort. Our futures are interconnected. We win together. That will inform the Bear Den Partners’ approach within this community.”