If the bond is too high and unaffordable, PCMR will not operate this season. Since we have no information to indicate that Vail Corporation has made a reasonable offer to buy Powdr's various property rights needed for Vail to operate the ski area, it is unlikely that Vail will operate PCMR's facilities this year or in the near future. That will eliminate, at least temporarily, a competitor for Vail's businesses in Colorado as well as its business at The Canyons. Park City, with its three operational resorts, poses a substantial threat to Vail's Colorado business because of its unique combination of easier airport access, a more reasonable skiing altitude and varieties of skiing terrain and skiing experiences. The restaurants, hotels, shops and other amenities in Park City are excellent alternatives to the facilities at Vail's various properties in Colorado.

Vail Corporation's management may believe that it will be able to obtain the property rights needed to operate PCMR for a very low price by causing the resort to cease operations. But a low price is unlikely to be accepted by Powdr, and a low ball offer poses a real risk to Talisker/Vail, for reasons that I will detail below. At the very least, Powdr should expect at least 50 percent of the going concern value of the operating ski area, based on its past net revenues. Anything less than 50 percent could be seen as showing bad faith on the part of Vail, and that will provide justification for Park City's government to exercise its right of eminent domain to take all or part of the Talisker land.


Because of the negative impact on skier visits and hotel bookings in Park City caused by the uncertainty concerning this dispute, the Park City government should immediately start the process to condemn the Talisker property needed to satisfactorily operate PCMR. Because there are no development rights on this property and because of its access problems, the cost to condemn would be a manageable expense. Talisker will argue that it should get some going concern value from the past operation of the ski resort as a part of the valuation. But partial interests in businesses are not worth much, and the current impasse between Powdr and Talisker/Vail makes the going concern valuation issue appear speculative, and without merit. If the ski area doesn't operate this winter, Talisker will forfeit any benefit from the going concern value issue in a future condemnation.

The City should begin by condemning a leasehold interest for a short term to get past the present crisis, but absent an imminent agreement between Powdr and Talisker/Vail, the City should plan to permanently take the property needed to operate the ski resort. Once it owns or otherwise controls the ski slopes, the City can lease the property in a manner that assures that a ski resort operates at the PCMR facilities. It will recoup its costs of acquisition, and probably more, from the rent it charges the resort operator.

If the Vail Corporation wants to take over PCMR, it should offer and pay a fair price. If its real goal is to close skiing operations at PCMR facilities, then it will not make a fair offer and PCMR will probably close for good, barring a successful appeal.

The City government should not rely on the appeal to save PCMR. It should start the condemnation process now. Without the threat of condemnation, nothing good will come of this dispute for the Park City community. This is a matter of life or death for many of our small businesses. The City government should no longer stand passively by as events overtake us. Decisive action needs to be taken now.