City Hall has considered the impacts on municipal finances if Park City Mountain Resort did not open for one ski season as a result of a lawsuit against its landlord or, in another scenario, if PCMR operates for a year using only its lower terrain.
Park City Manager Diane Foster said the exercise was conducted as a part of City Hall's contingency plans in budgeting. It occurred last fall, she said. Foster said officials estimated a drop in tax revenues and how City Hall would react. If the tax revenues fall, she said, leaders do not want municipal services to be diminished. They also would not want to lay off municipal workers and rehire them the next year, according to Foster.
"I'm hopeful we'll never have to use that plan, but I'm still going to plan," Foster said in an interview.
She said it is a "low probability" City Hall will be forced into a contingency. The case pits PCMR against its landlord, Talisker Land Holdings, LLC, and Vail Resorts. The Colorado firm operates Canyons Resort under a long-term lease. The lease could be expanded to include the disputed terrain at PCMR depending on the outcome of the case. The PCMR base area is not part of the case.
City Hall has long had a contingency plan for a recession. Foster said the contingencies centered on the PCMR dispute are different than those in a recession plan since officials expect any impacts on municipal finances would last for one ski season rather than the unpredictable length of a recession.
Foster, meanwhile, said City Hall is considering the impacts on municipal finances if the PCMR base area no longer is the access point to the terrain disputed in the lawsuit. The Talisker Land Holdings, LLC and Vail Resorts side has indicated that the terrain could be accessed elsewhere. Many people purchase their lift tickets and season passes at the base area, and City Hall collects the taxes on those sales.
If the base area is no longer the access point to the terrain, it seems likely a new primary access point could be outside the Park City limits, perhaps at Canyons Resort. The disputed terrain, though, is inside the city limits. In that scenario, Foster said, City Hall could approach the Utah State Tax Commission to consider the revenue implications on the municipal government.
The discussions at City Hall occurred against the backdrop of mounting tensions in the lawsuit. The Talisker Land Holdings, LLC side served PCMR with a de facto eviction notice last summer in anticipation of the judge making favorable rulings. PCMR, meanwhile, recently indicated in a court filing it planned to dismantle and remove most of the ski lifts if it is forced off the land. PCMR has said it could operate the lower terrain as well as an action sports camp. The PCMR side has said since the early days of the lawsuit a loss would have serious economic impacts on the community. The other side, though, disagrees with that prediction.
PCMR is selling season passes for the 2014-2015 ski season with a caveat based on the lawsuit. It says season passes will be refunded on a prorated basis if the resort is forced to close for all or part of the ski season as a result of the lawsuit. It is the third consecutive year the resort has published a caveat.