Powdr Corp. rejects Vail’s buyout offer
Ryan Summerlin April 25, 2014
The CEO of Park City Mountain Resort parent Powdr Corp. on Friday sent a letter to his counterpart at Vail Resorts indicating the firm intends to retain control of PCMR, saying the land and infrastructure it owns are not for sale.
The two-page letter from John Cumming to Rob Katz was made public Friday morning. It follows two correspondences from Katz to Cumming in recent weeks, also made public, including one outlining an offer by Vail Resorts to buy the PCMR base area and parking lots.
The Cumming letter continues a period of high drama, stretching from the courtroom to the boardroom, in a legal case centered on PCMR’s disputed leases of the land underlying most of the resort’s terrain. The case pits PCMR against Vail Resorts and Talisker Land Holdings, LLC, the firm that owns the land involved in the lawsuit. Vail Resorts is leading the litigation efforts as part a long-term agreement to operate Canyons Resort. The deal could be extended to include the disputed terrain at PCMR depending on the outcome of the case.
"But let me clear: we won’t cave in, and we won’t agree to a Vail takeover that would deprive our guests and our community of all the benefits offered by three resorts that compete with each other," Cumming said in the letter.
Powdr Corp. controls the PCMR base area, ski terrain toward the bottom of the resort, the parking lots and infrastructure. Those are not a part of the lawsuit. That ownership would complicate the situation if Talisker Land Holdings, LLC wins the case, probably requiring the creation of a new access point to the disputed terrain.
"The reality is that even if Vail prevails in this litigation it cannot possibly operate a resort on the leased property because it has no claim to the adjacent lands and facilities that are essential for ski operations to take place. Those lands and facilities are not for sale, to you or anyone else," Cumming said in the letter. "If you win the lawsuit you’ll certainly have succeeded in buying a chair at the negotiation table, but you will not own the table, or the resort. So we must negotiate a resolution, even if Vail wins the lawsuit."
Cumming, meanwhile, said Vail Resorts "has prematurely tried to evict PCMR from property it has occupied since the early 1970’s." The statement is a reference to a de facto eviction notice the Talisker Land Holdings, LLC side served on the resort in anticipation of favorable rulings in the case.
"Vail chose to press for immediate eviction even before the courts issue a final decision on which party has the right to occupy the property. Vail should not be surprised that its decision to play hardball has set off alarms in the community," the letter said.
It also said there are options for a resolution to the case. They include PCMR purchasing the disputed property or entering into another lease for the long term.
Some highlights of the letter include:
"We then offered to lease the property on a long-term basis for a rental value far in excess of market rent. Talisker’s response to all of these overtures was to demand capitulation. On a take-it-or-leave-it basis, it demanded that PCMR pay rent at levels that would have quickly put the resort out of business," the letter said. "It also demanded that at the end of any new lease term, the base facilities and all other assets involved in the operation of the Resort would have to be turned over to Talisker for free."
"Unfortunately, you and Vail have picked up where Jack Bistricer and Talisker left off. Capitulation in the face of such demands was unacceptable then, and it is unacceptable now," he said.
"Although you claim that a Vail takeover would be good for Park City, I disagree, and I believe that my Park City neighbors would disagree," he said.
Talisker: assertions ‘false’
Talisker Land Holdings, LLC midday on Friday released a prepared statement in response to Cumming’s letter to Vail Resorts CEO Rob Katz:
"We will not be responding to the many false assertions in Mr. Cumming’s letter. Ultimately, the Court will decide who has the rights to operate the disputed ski terrain. If that will be Vail Resorts, then what’s important is how the parties collaborate and cooperate on the use of the base facilities to ensure the highest quality experience for the guests and community of Park City. This is not about takeovers or caving in, it’s about working together once the Court rules. We appreciated Mr. Cumming’s offer to call and Mr. Katz has already done so and hopes those discussions will allow for a resolution that accepts the realities of the legal process that PCMR started."
To view Cumming’s letter in its entirety, please click here.