More dogs on Main Street
July 21, 2007
One hundred millions dollars. Oh my heck, that’s a lot of money. One hundred million. That’s what Talisker agreed to pay for The Canyons. American Skiing Corp. has been in a death spiral for a couple of years now, discovering that a business plan based on endless debt could only last for so long before somebody called the note. (A lesson Congress might consider.) The Canyons was the last piece of smoldering wreckage to be salvaged from the ASC train wreck. And it’s still not fully extricated from the mess.
For the price of one hundred million, Talkisker gets the resort in its current condition, including a pile of lawsuits and a cast of characters as frightening as the bar scene in the first "Star Wars" movie. You have to assume they have a solution to some of those problems ready to put in place. At least most people would not pay $100 million to take over property that is leased, not owned, while the landlord is trying to terminate the lease and evict the tenant. The conditions call for a fire sale, but $100 million doesn’t sound like a fire sale price. You have to wonder what it might have brought with a different cast of characters involved.
Talisker, of course, has become a big player in Park City. The stuff they have built in Empire Pass is very nicely done, even if there is about twice as much of it as we really needed. They also have the Tuhaye Ranch project between Kamas and Park City, which is one of those high-snoot gated communities. It’s also very nicely done. To my knowledge, they haven’t been in the ski resort operations business, so they either have to keep the current operation in place at The Canyons (minus Scott Pierpont who has already announced his resignation) or bring somebody else in. Rumors are rampant.
Whoever runs the place has their work cut out for them. In addition to the $100 million purchase price, it’s pretty easy to come up with a shopping list of another $50 million or so in things that need to be done. They need to come up with another way to get people up the mountain in the morning. The lines at the gondola are too long most mornings. They need to do something about snowmaking, which is more complicated than it looks because there isn’t a big source of water on the mountain. So, in addition to the pipes and other hardware that needs to be installed on-site, there is a pipeline to some remote water source, like East Canyon Reservoir, on top of it. A couple of the old Parkwest buildings are still in use, held together with duct tape and baling wire. They are not exactly consistent with Talisker’s brand: "A lifetime of privilege."
The deal doesn’t close until September, which means between now and then, accountants and lawyers will be looking under every rock on the mountain to see what kind of vermin is lurking there to mess things up. A lawsuit here, a lawsuit there — here a title dispute, there a title dispute — eeyi, eeyi, oh. A big enough checkbook can resolve most of those.
But there isn’t a checkbook big enough to lift the Curse. It’s a widely held, but completely unproven theory, that the property is afflicted with an ancient Indian Curse. The checkered past, dating all the way back to the Parkwest era, suggests that there is something karmicly wrong with the place. I’m not sure whom Talisker pays off to get the curse lifted, but if I were in charge, I’d forget the lawyers and focus on looking up every shaman, priest, bishop, rabbi, and druid goddess I could find. Incense, holy water, burnt offerings, whatever it takes. I wouldn’t rule out an exorcism before spending that kind of money.
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We’ve got about every real estate expert you can imagine around here. We’ve got architects, planners, civil engineers, more lawyers than is healthy for any community, and half the world’s realtors. You can get feng shuied and market staged. We’ve got marketing people who can turn sagebrush flats into an exclusive gated community. But I don’t know of anybody who is in the business of listing curses. Talisker better find somebody to do it, or a "Lifetime of Privilege" could quickly melt down into a "Lifetime of Problems."
After lifting the curse, I think the next dilemma for the new owners would be the name. "The Canyons" has never really worked, at least not for me. ASC really succeeded in creating a brand there, even with a bad name. In a few years, they took a resort nobody outside of Utah had heard of and put in on the national map. It would be hard to walk away from a successful branding like that, even though it is a dumb name. But if they could figure out the name of the Indian who put the curse on the place and name it after him, well, it couldn’t hurt.
It would be good to have an owner who focuses on the skiing a little more than the real estate, but I suspect that is too much to ask. There hasn’t been a ski lift installed in recent years that wasn’t driven by real estate, not just at The Canyons, but the other resorts, too. Deer Valley’s new lift will open some nice terrain, but was designed to open some nice condos and a big hotel in the process. The last lift PCMR added to the line up was entirely real estate-oriented. I guy I know who is in the lift installation business said they are busier than ever this year, nationwide, and all of them are primarily real estate access lifts. That’s where the money is, more than selling lift tickets and cheese fries.
But in the end, based on what Talisker has done around town so far, you have to assume the change in ownership is a good thing. I hope they can make it happen.