Park City Mountain Resort indicated last week it would immediately pay a firm under the Talisker corporate umbrella a sum that it considers greater than fair market value to lease most of the land underlying the resort's terrain until the end of the 2014-2015 ski season.
Alan Sullivan, the lead attorney for PCMR in a lawsuit against its landlord, Talisker Land Holdings, LLC, outlined the offer in broad terms in an Aug. 6 letter to Park City Attorney Mark Harrington. It was also sent to John Lund, who is leading the Talisker Land Holdings, LLC legal team. City Hall released the letter and two other recent correspondences related to the case after media requests using state open-records laws.
Sullivan says in the letter the immediate payment would cover a lease from May 1, 2011 until April 30, 2015. The amount would be based on an independent expert's opinion, the letter says. The 3rd District Court judge presiding over the case, Ryan Harris, has ruled PCMR's leases expired on April 30, 2011 after they were not renewed. In return, Sullivan says, PCMR wants Talisker Land Holdings, LLC to agree to not pursue an eviction of the resort until after the 2014-2015 ski season.
Harris has signed a de facto eviction order against PCMR but stayed its enforcement to allow the sides to attempt to reach an agreement through mediation. The mediation deadline is Friday. An important hearing is scheduled Aug. 27.
"PCMR's payment would be made without prejudice to the right of either side to prove to the Court at trial that a higher or lower annual rent should apply for this period. We think that this is a sensible solution to the immediate impasse. It would allow the litigation to proceed without holding the community hostage. Neither party would be harmed. And it may lead to a resolution of the entire dispute," Sullivan says in the letter.
The three recent letters cover a variety of topics. The first, dated Aug. 4, was from Lund to Harrington and was apparently spurred by comments made by Mayor Jack Thomas and Park City Manager Diane Foster about the case. Harrington responded to Lund on Aug. 6.
The letters come at a critical time in the case with the mediation deadline looming and the Aug. 27 court date following shortly afterward. Neither PCMR nor Talisker Land Holdings, LLC has provided details about the mediation efforts. The sides are also readying court filings that will address the dollar figure that would be attached to a bond that would allow PCMR to remain on the disputed acreage as the resort pursues an appeal of the case to the Utah Supreme Court.
Vail Resorts is overseeing the lawsuit on behalf of Talisker Land Holdings, LLC as part of a long-term agreement to operate the Talisker corporate family-owned Canyons Resort. The deal could be extended to the disputed terrain depending on the outcome of the case.
Some of the highlights from the three letters include:
"The comments by these City leaders incorrectly suggested that Talisker and PCMR must negotiate an out-of-court agreement as to the bond amount and cannot rely on the Court to set such an amount. More troubling were comments that Talisker's damage claim was 'piling on' and accusing Talisker of 'splitting the resort in half' by leasing the land to Vail. We very much understand and appreciate the City's concern regarding the dispute between Talisker and PCMR and the toll it is taking on the community. However, we believe all of these comments are unfounded and could be construed to be trying to influence the legal process itself," Lund says
"You may know that each year we have submitted a check to Talisker for the rent called for by the leases, and each year Talisker has returned the check to us. Since the rent required by the leases is less than the property's current market rent, PCMR has repeatedly made it clear that, as a way of resolving this case, it is prepared to pay Talisker rent well in excess of the fair rental value, and it is prepared to do so today. PCMR has also repeatedly offered to purchase the leased property at a premium over its fair market value. But since Vail Resorts has taken over the litigation on Talisker's behalf, it has refused to consider the renewal of the lease or a sale of the property," Sullivan says.
"The Mayor and City Council expect the parties to reach an agreement. However, your letter leads to a logical assumption that a resolution is unlikely and certainly not imminent, even temporarily through the posting of a bond. That assumption is drawn from the parties' inclination to return their focus to the court proceedings as opposed to negotiation. Your statement that Talisker 'must take this matter through the normal court process' confirms that the parties have little hope of broader negotiations, such as using next season's revenues as a foundation for a mutually acceptable agreement. From the City's vantage point, all conceivable resolutions, including bond, lease, sale, escrowed revenue, or joint operation, have one common element: a fully operational resort generates revenue regardless of the name of the operator," the city attorney says.
To view the letter from John Lund, attorney for Talisker Land Holdings, LLC, to Mark Harrington, the Park City attorney, dated Aug. 4, 2014, click here.
To view the letter from Mark Harrington to John Lund, dated Aug. 6, 2014, click here.
To view the letter from Alan Sullivan, attorney for PCMR, to Mark Harrington, dated Aug. 6, 2014, click here.