The Dismantling Begins

[thetrailboss]

Cannon was, in pushing for their overpriced lift, pointing at back to back profitable seasons, saying they had turned the corner.

I doubt that the state would have purchased a used lift. If they did, folks would be complaining because it might not last as long. Besides, the price was not just the lift install, but the removal of the old lift, site work, etc. This was probably part of the federal stimulus package.

 

[Smellytele]

As far as the used lift thing goes didn't they get a used lift a few years ago from Sunapee - eagle cliff chair. As far as discounts go at Sunapee after the lease there is only the Sunday afternoon thing. Price also went up 50% over the years since the lease as well - No benefit for the NH resident. As a libertarian myself I am so torn by the State owning a ski area. But as a cheap b@5t@rd I like it!

 

[deadheadskier]

One thing I can say is that I understand the price increases at Sunapee as the product was improved at a private business's expense.

At Cannon, the improvements are already in place. If a private business comes in and jacks up the pricing to say Loon/Waterville levels, what is the benefit for any skier, not just NH residents? I suppose you can never have too much snowmaking, so if higher ticket prices equals better snowmaking, great. From everything I've read though, they have been doing a great job as it is in that department.

 

[Geoff]

This all said, if someone told me that $100 / random $$$ of my proporty taxes were going to support the State Park System I'd be perfectly fine with that. It's par for the course in every state. That's why we have Parks; for public enjoyment, not for tax revenue.

Your property tax in New Hampshire goes to pay town services. Schools. Roads. Not much else. New Hampshire gets 61% of their funding from property tax. Vermont is a distant #2 at 42%. That makes for an extremely lean state government. Property tax does not go to pay for state parks. Property tax does not provide Rivercoil his personal ski resort. If you want extra services, you have to pay for them like everywhere else. I'll bet you'd love a 6% sales tax, a 6% individual income tax, and the bloated state government all the other New England states have.

 

[deadheadskier]

Yes, in NH, property tax is the primary source of revenue into the State's general fund. In other states, income tax, sales tax etc make up a large portion of the pie. Which tax the revenue comes from to support a particular State's park system is irrevelant to my point.

All I'm saying is that most State's Parks are subsidized with money from tax revenue. NH is apparently the exception as it has been able to sustain it's park system for years with just usage fees. If things have to change where by the parks due to need some funding outside of usage fees, I'd be fine with that. In the case of NH it would come from my contributions at the liquor store and in property taxes.

I do not see NH having a sales tax or income tax anytime soon.

 

[mondeo]

Yes, in NH, property tax is the primary source of revenue into the State's general fund. In other states, income tax, sales tax etc make up a large portion of the pie. Which tax the revenue comes from to support a particular State's park system is irrevelant to my point.

All I'm saying is that most State's Parks are subsidized with money from tax revenue. NH is apparently the exception as it has been able to sustain it's park system for years with just usage fees. If things have to change where by the parks due to need some funding outside of usage fees, I'd be fine with that. In the case of NH it would come from my contributions at the liquor store and in property taxes.

I do not see NH having a sales tax or income tax anytime soon.

Side note - NH has the 6th lowest government spending as a percentage of state GDP, and 4th lowest per capita. Only other states (or DC) to be in the bottom 10 for both metrics are Tennessee (10 and 2) and South Dakota (2 and 3.)

Vermont - 39/17
Maine - 30/6
Mass - 11/42
RI - 34/34
CT - 3/37
NY - 40/48 (And people wonder why everyone leaves Upstate...)
NJ - 17/41

 

[riverc0il]

.....Property tax does not provide Rivercoil his personal ski resort. If you want extra services, you have to pay for them like everywhere else. I'll bet you'd love a 6% sales tax, a 6% individual income tax, and the bloated state government all the other New England states have.

:lol:

I am not sure if that is an Ad hominem or not. Regardless, pretty dumb way to put it and not useful as an argumentative tool. You'll have to do better than that, Geoff.

:smash:

As far as paying for extra services, if the ski area can sustain itself financially, we are not paying for it. So I fail to see your point. NH dug itself a hole with the lack of sales tax. It lived by it for years siphoning off sales from Mass, VT, and Maine. Now it is dieing by the lack of sales tax since the spending sprees dried up. NH did just fine without extra taxes during the lean years and NH residents had their cake and ate it too. Your suggestion of extra servicing coming at a cost would not have been valid in past years. I am always leery of arguments that only work because of what is happening in the here and now.

 

[Geoff]

The data I've always read said that Cannon was poorly run and frequently ran at a loss.

Here's one analysis point:

http://www.gofranconia.com/Tuckreport-1.htm

If Cannon were run as a real business, it would both pay lease money to the state and pay all the normal things businesses pay like unemployment insurance and workmans comp that the State of New Hampshire now picks up.

 

[witch hobble]

I'm very much a new guy trying to find all the fun interstitial spaces and side country fun at Cannon. Great mountain. Apologies to those who have come before me yet may have to occaisionally ski in my tracks.:beer:

Anyway, the parallels to Gore Mountain are certainly there. I am whole heartedly in favor of state-run ski areas! During the real estate boom they were places that held a certain appeal for their stripped down, egalitarian and "skier's mountain " charm. Now they are the places that spur interest(and lots of multi-page posts) during the real estate...uhhh.....slowdown?.....for having signifigant terrain expansions and surging popularity.

Call me a crypto-fascist, anarcho-sydicalist, knee-jerk bleeding-heart, but I could find many other offensive and horrifying things to bitch about as far as my tax dollars go than the promotion of skiing and these ski areas. If I had been skiing and pruning at Mittersill for many years I'm sure I would have a different perspective.

I've also had a few beers and am posting on a ski message board @ 9:30 on a sunday night in August, so please excuse me if I edit this post somewhere in the future.

 

[threecy]

I doubt that the state would have purchased a used lift. If they did, folks would be complaining because it might not last as long.

I doubt most people would have known the difference. Heck, instead of going for a modern refurbished lift, they could have gone with an older refurbished lift and made it fit the retro theme of Mittersill.

Besides, the price was not just the lift install, but the removal of the old lift, site work, etc.

None of the items totalling $2.6M in the bid summary mention removal of the old lift.

 

[threecy]

I'm not sure where the funds come from for Capital Improvements to State Parks. So, the infrastructure improvements at Cannon could very well have come from the general fund.

The $2.6M comes from Concord's capital budget.

As Rivercoil said, if we've already invested all this money in Cannon, why hand it over right now to a private business to profit from that investment?

The state would have guaranteed income from a lease of Cannon, whereas right now the risk of running hundreds of millions of dollars in the red has been increased by adding another complex.

Another way to look at your question - Crotched, Jiminy Peak, Okemo, Sunday River...why would the owners of those areas, which have seen capital investments equal or greater than Cannon in the same timeframe, hand them over (i.e. lease) right now for Boyd, Fairbank, Mueller, Kirchner to profit?

 

[thetrailboss]

The $2.6M comes from Concord's capital budget.

Which, truth be told, probably came from the federal stimulus I imagine.

The state would have guaranteed income from a lease of Cannon, whereas right now the risk of running hundreds of millions of dollars in the red has been increased by adding another complex.

Not necessarily. I am not sure if there would be an operator who would want to run the ski area since there is limited if any avenues for the other sources of income a ski resort relies upon...namely real estate development. The Muellers were banking on being able to build a real estate development near Sunapee and then there was a change in administrations in Concord and their plans got derailed. With Cannon, the only real area nearby would be the former Mittersill Base Area, which is developed and privately held.

 

[threecy]

Not necessarily. I am not sure if there would be an operator who would want to run the ski area since there is limited if any avenues for the other sources of income a ski resort relies upon...namely real estate development.

You'd be surprised...Peak dumped millions into Crotched, for instance, and have yet to do any development half a decade later. Certainly real estate development potential is a big plus in attracting operators, but not a requirement.

The Muellers were banking on being able to build a real estate development near Sunapee and then there was a change in administrations in Concord and their plans got derailed.

It's certainly been tough for the Muellers, especially since they had the private land ready to go for development and only needed to cross state property.

That said, money has been made running Sunapee as a leased ski area.

 

[thetrailboss]

I think the key distinction between Cannon and Crotched and Sunapee is that Cannon is not as close to the metro areas and is considered more of a destination resort as opposed to a place to ski after work or for a day. Crotched has the nightskiing business and Peaks saw it as being close enough to Manchester AND Boston so that the skiing business would work. Look at Wachusett--same thing. It is close enough for folks to ski there for a few hours.

Sunapee draws from similar markets and is just close enough for a Saturday or Sunday trip from Boston.

Arguably Cannon is an easy drive from Boston, but folks just don't see it as being a day trip place from Boston. Plus it is competing against Loon/WV.

 

[deadheadskier]

The $2.6M comes from Concord's capital budget.


The state would have guaranteed income from a lease of Cannon, whereas right now the risk of running hundreds of millions of dollars in the red has been increased by adding another complex.

There are numerous NH State Parks that run in the red. Odiorne Point in Rye does every year. What would you propose doing about that? Sell it to a Condo developer? It's 300 acres could probably be sold for HUGE money. Probably enough to cover operational costs of the rest of the State Park system for a very long time.

As I stated prior, NH is the only state in the country whose park operations are funded entirely by usage fees. That may change and in this economic climate, it may change soon where by some funding will need to come by the state / tax payers. Right now that isn't the case.

Cannon and the entire State Park system are not a contributing problem to the State deficit. Why point the crosshairs where the problem is not located?

 

[Puck it]

There are numerous NH State Parks that run in the red. Odiorne Point in Rye does every year. What would you propose doing about that? Sell it to a Condo developer? It's 300 acres could probably be sold for HUGE money. Probably enough to cover operational costs of the rest of the State Park system for a very long time.

As I stated prior, NH is the only state in the country whose park operations are funded entirely by usage fees. That may change and in this economic climate, it may change soon where by some funding will need to come by the state / tax payers. Right now that isn't the case.

Cannon and the entire State Park system are not a contributing problem to the State deficit. Why point the crosshairs where the problem is not located?

Cannon has been in the black the last two or three years. And Cannon also benefits from the lease on Sunapee. I agree with the improvements made at Cannon. There is no way they would lease it now. And Lynch skis there and has said to the lease a numbers of times.

 

[threecy]

Cannon has been in the black the last two or three years.

Most decent ski areas operated in the black in those two seasons.

There are numerous NH State Parks that run in the red.

There's a big difference between running a state park - ie bathrooms, camp sites, trails, etc. - and running a major ski area with multiple lodges, aerial lifts, snowmaking, etc.

Odiorne Point in Rye does every year. What would you propose doing about that? Sell it to a Condo developer? It's 300 acres could probably be sold for HUGE money. Probably enough to cover operational costs of the rest of the State Park system for a very long time.

You'll have to ask the Governor about that. Leasing Cannon to a private operator is tremendously different than selling a state property for condo development.

Cannon and the entire State Park system are not a contributing problem to the State deficit. Why point the crosshairs where the problem is not located?

Are you suggesting that Cannon had $2.6M in cash sitting in a State Park bank account?

I think the key distinction between Cannon and Crotched and Sunapee is that Cannon is not as close to the metro areas and is considered more of a destination resort as opposed to a place to ski after work or for a day. Crotched has the nightskiing business and Peaks saw it as being close enough to Manchester AND Boston so that the skiing business would work. Look at Wachusett--same thing. It is close enough for folks to ski there for a few hours.

Sunapee draws from similar markets and is just close enough for a Saturday or Sunday trip from Boston.

Arguably Cannon is an easy drive from Boston, but folks just don't see it as being a day trip place from Boston. Plus it is competing against Loon/WV.

I think you're missing the point - Cannon has no real estate, nor any real estate potential. The areas I cited were recently transferred into REITs, with the lessees focusing on ski operations. A lease agreement for Cannon would potentially be quite similar - in other words, it's not at all unheard of to see a lessee not leasing for purposes of real estate development.

 

[Puck it]

.


Are you suggesting that Cannon had $2.6M in cash sitting in a State Park bank account?

I thought the most of the money for this came from the Sunapee lease over the last two years. I think I read that somewhere.

 

[thetrailboss]

Most decent ski areas operated in the black in those two seasons.



There's a big difference between running a state park - ie bathrooms, camp sites, trails, etc. - and running a major ski area with multiple lodges, aerial lifts, snowmaking, etc.


You'll have to ask the Governor about that. Leasing Cannon to a private operator is tremendously different than selling a state property for condo development.


Are you suggesting that Cannon had $2.6M in cash sitting in a State Park bank account?


I think you're missing the point - Cannon has no real estate, nor any real estate potential. The areas I cited were recently transferred into REITs, with the lessees focusing on ski operations. A lease agreement for Cannon would potentially be quite similar - in other words, it's not at all unheard of to see a lessee not leasing for purposes of real estate development.

I see that, but the Boyne, Peak, and Triple Peak Properties that are in the REIT's (coincidentally, the same REIT if I am correct) all have substantial real estate businesses and "resort" infrastructure (think condos, hotels, pools, golf courses, non-skiing junk). I do recall the Muellers saying something about wanting to get back into "running the ski areas" and did the REIT to not have to deal with the "resort" real estate headaches, but I think that there is a distinction between these REIT partnerships and the proposed Cannon Deal is that the latter has no resort infrastructure.

 

[threecy]

I see that, but the Boyne, Peak, and Triple Peak Properties that are in the REIT's (coincidentally, the same REIT if I am correct) all have substantial real estate businesses and "resort" infrastructure (think condos, hotels, pools, golf courses, non-skiing junk). I do recall the Muellers saying something about wanting to get back into "running the ski areas" and did the REIT to not have to deal with the "resort" real estate headaches, but I think that there is a distinction between these REIT partnerships and the proposed Cannon Deal is that the latter has no resort infrastructure.

I'm not quite sure what you're getting at...a lot of the development at those areas is a done deal - ie sold and paid and thus not providing direct additional revenues. Similar to the Mittersill real estate.

I would venture a guess that if the state offered Cannon for lease with similar provisions with Sunapee (and specifically named what they could and couldn't do), there would be suitors.