When the news about the judge's ruling in the PCMR/Vail mess came, I was on a quick trip to Capitol Reef. Somebody got a message about it, and we all grabbed our electronics and read The Park Record online. The reaction was kind of a shrug. It wasn't the decision anybody wanted, but it was the decision everybody fully expected. I actually pulled up the whole 80-page decision and read it. As that kind of thing goes, the judge did a good job explaining the decision and the reasoning behind it.
The Utah Supreme Court has been consistent for over 100 years that in a commercial lease, where the terms of the renewal are clearly spelled out, the parties have to do exactly what their own agreement says they have to do. If the lease said to renew, you have to stand on the corner of Heber and Main and sing, "I'm a Little Teapot" in the key of G, it doesn't count if you do it in B flat. Or not at all.
It's unfathomable that PCMR let the deadline pass. The landlord, United Park City Mines and now Talisker, has been trying to get out of a below-market lease for better than 20 years. It's just baffling that PCMR didn't give notice every morning for 20 years when they turned the office lights on. But there we are. So now what?
The one thing I'm sure of is that both parties to the dispute are too smart to kill the brand. There is a going-concern value to PCMR that is too valuable to be put seriously at risk. Everybody loses if the operation is splintered up. To put it another way, if two farmers are arguing over the ownership of a cow, you can bet that the cow will be fed.
PCMR will file an appeal, post the necessary bond, and it will be business as usual for the next season, at least. I bought my season pass without a moment's hesitation, and am confident that I will be enjoying all of PCMR, from the parking lots to Jupiter Bowl, and all points in between.
It will take several months to get through the court of appeals, and that assumes they don't spend months trying to figure out the amount of the appeal bond first. That alone gets us through almost all of next season. Whatever the result at the appeals court, the losing party will try to get the Utah Supreme Court to hear the case (which is optional with the court). So things could drag on for a long time before anybody is packing up the condiments and taking down the lifts.
For the vast majority of the skiers, the ownership of the resort really isn't important. Both Vail and Powdr have strong reputations in the industry, and their individual resorts have unique identities. Locally, having PCMR ownership and management as integrated into the community as they are matters. From sponsorship of kids' race programs to providing lifts-lessons-lunch-and-equipment rentals to a bunch of Rotary exchange students, all with a single phone call, PCMR is very engaged with the community. That's not to say that Vail wouldn't do some or all of the same, but if you have to get everything blessed by Corporate in Colorado, instead of talking to a local manager when you run into her at the grocery store -- well, it's different.
Powdr experienced the other side of that concern over the loss of local control when they bought Killington. Policies change, long-standing, informal practices get formalized or eliminated, and it's just different. It took a while for the locals to warm up.
But the real problem here is that nobody owns all the pieces to operate the resort if the lease is gone. Vail has the bulk of the ski terrain (with bits and pieces leased from third parties). Cumming family entities own the strip of land formerly owned by the banks who financed United Park's original construction of the resort, and PCMR owns the parking and base facilities. PCMR also owns the trademarks, water rights, lifts and other hardware. Without everybody, nobody has much of anything.
The solution is a shotgun wedding, where parties who don't like each other very much realize that they need each other. Negotiating the terms of that has been impossible with the lease dispute in place. Nobody could put a value on anything because it was unclear who owned or controlled the various parts. There's too much value there to break it apart. So in the end, some kind of deal will happen. They will walk down the aisle, black eyes and fat lips, and say, "I do -- because I have to."
Chill the champagne, there's going to be a wedding.
Tom Clyde practiced law in Park City for many years. He lives on a working ranch in Woodland and has been writing this column since 1986.