Analysis: PCMR lawsuit, arrival of Vail Resorts defined a decade of change in Park City
This is one in a three-article package examining the defining moments of the past decade in Park City and looking at what some residents say may be the headlines in the community at the end of the upcoming decade.
The future of Park City Mountain Resort in early 2012 appeared to be as bright as a bluebird day on the slopes.
The worst of the recession had passed and PCMR, like the rest of Park City, was enjoying the economic upswing. The resort and its owner, Snyderville Basin-based Powdr Corp., were displaying confidence in the era’s bounty. More than a decade before, in the late 1990s, the resort secured a development approval from City Hall contemplating an ambitious remaking of the base area. Some of the work had long been completed by 2012, but significant development rights remained intact. Powdr Corp. and PCMR were engaged with City Hall about the possibility of building an action-sports camp at the base as part of the overall development, something that would further solidify the place where American snowboarders swept the podium in the 2002 Winter Olympic men’s halfpipe competition as one of the nation’s top resorts for big-air seekers. The camp would be called Woodward Park City, and Powdr Corp. and PCMR were brimming with confidence as the concept seemed to be widely embraced. City Hall leaders of that time endorsed a multimillion-dollar contribution of taxpayer monies to assist with the transit and parking infrastructure. Parkites saw Woodward Park City as a facility that would train another generation of local Winter Olympic medal winners.
In some circles, though, the whispers had already started that something was afoot, and perhaps not right, at PCMR. Powdr Corp. for some unknown reason was negotiating a sale of its flagship resort, the most prevalent of the rumblings held. The CEO of Powdr Corp., John Cumming, late in 2011 had publicly stated there was not a deal involving PCMR under negotiation, telling Park City leaders during a Marsac Building appearance in December of that year the resort was “not for sale.” Later that evening, he told The Park Record the rumors “always amuse me.”
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The reality was far more astonishing and something that would define the decade in Park City in a similar fashion as the Olympics did in the previous 10-year span and the population boom did in the 1990s.
The corporate infrastructure in the spring of 2011 had inadvertently failed to renew two leases on the land underlying most of the PCMR terrain, propelling the PCMR side and the landowner, a firm under the umbrella of Talisker Corp., into what were initially private negotiations and then into a dramatic lawsuit that unfolded in state court as the Park City community, the tourism industry and the North American ski industry watched in disbelief. As the decade ends, the turmoil that beset PCMR stands, in many ways, as the instigator of a changing Park City that has left so many Parkites uneasy about the city’s future as a true community.
The PCMR side launched the litigation in March of 2012, saying the future of the resort was at stake in the case. PCMR might be forced to close if it did not prevail, the president and general manager of the resort at the time said at the outset of the case. Talisker Land Holdings, LLC countered that the leases had expired, suddenly leaving doubts that Powdr Corp. would retain control of PCMR.
Colorado-based Vail Resorts, one of Powdr Corp.’s industry rivals, would enter the case on the Talisker Land Holdings, LLC side in May of 2013 with the aim of wresting the disputed land from Powdr Corp. and coupling it with nearby Canyons Resort, which was branded a Vail Resorts property as part of a long-term lease and operations agreement reached at the same time of the Vail Resorts entry into the case. Vail Resorts was already an industry behemoth with its namesake property in the Rockies and other mountain resorts across North America. The addition of Canyons Resort would advance the Vail Resorts portfolio in one of North America’s key skiing states.
It was a deft maneuver orchestrated by the chairman and CEO of Vail Resorts, Rob Katz. The agreement was pegged at upward of $300 million in long-term debt. As part of the deal, Vail Resorts also seized control of the litigation on behalf of Talisker Land Holdings, LLC. The agreement included a clause allowing an expansion to the disputed PCMR terrain, depending on the outcome of the lawsuit. The clause, in essence, envisioned a single resort stretching across 7,000-plus acres of Wasatch Range terrain. The two sides would be linked in some fashion, most likely via a gondola.
Observers at the time pondered the dollar figures Vail Resorts negotiated to lease and operate Canyons Resort with there still being a question about whether the agreement would ever be expanded to the PCMR terrain. Some said the $300 million-plus price tag made sense only if Talisker Land Holdings, LLC and Vail Resorts could pry the terrain away from Powdr Corp.
The lawsuit itself unfolded with stunning developments followed by shocking ones over the course of two-plus years. In one stupefying moment, the Talisker Land Holdings, LLC attorneys discovered a crucial letter from the PCMR side regarding the leases had been backdated. In another such moment, PCMR outlined plans to essentially dismantle the resort infrastructure, possibly on an around-the-clock schedule, if it was ordered off the disputed land.
What was transpiring in the courtroom was inconceivable to the community. How could Powdr Corp., even inadvertently, not renew the leases on the ground that made up most of the skiing terrain at PCMR, many asked. Why couldn’t Powdr Corp. and Talisker Land Holdings, LLC just reach a new agreement, others wondered. And many became weary as businessmen and their attorneys took to the courtroom with the future of PCMR, critical to a broad swath of the local economy, at stake. The mood eventually shifted to exasperation as it appeared there was a chance PCMR would not open for a ski season if Talisker Land Holdings, LLC moved forward with an eviction against Powdr Corp. from the disputed terrain.
The lawsuit wore on with the Talisker Land Holdings, LLC-Vail Resorts side winning a series of key rulings from the 3rd District Court judge presiding over the case. Judge Ryan Harris in the summer of 2014 signed a de facto eviction notice against PCMR and ordered the sides into mediation. Powdr Corp., realizing there was little more that could be accomplished as it attempted to maintain control of PCMR, negotiated a $182.5 million sale of the resort to Vail Resorts that September.
The deal reverberated through the ski industry. Vail Resorts by the time of the acquisition of PCMR had already come to be seen as the leader in the industry, orchestrating a series of deals prior to the one for PCMR and introducing the Epic Pass as an inducement to convince skiers and snowboarders to visit its roster of resorts. The acquisition of PCMR, followed by the coupling of the resort with Canyons Resort prior to the 2015-2016 ski season with a gondola linking the two sides, left other operators of mountain resorts across North America worried about the extraordinary footprint of Vail Resorts. It had top-tier properties in Utah, Colorado and the Lake Tahoe region of California and Nevada, the three most prominent skiing regions in the U.S. The Epic Pass, then, would be a singular industry marketing opportunity.
In the short time since the 2014 sale of PCMR to Vail Resorts, there has been a realignment of the ski industry. It is likely there would have been some level of change in the makeup of ski resort ownership over that time as the economy boomed and the corporate control of the industry tightened. The realignment, though, has occurred at a rapid pace since the PCMR sale, transforming the industry with newly formed operators and traditional ones elbowing each other with competing acquisitions that can be added to their season-pass lineups. The string of deals since the PCMR acquisition has included the sale of Deer Valley Resort to Alterra Mountain Company in 2017 and Alterra Mountain Company’s acquisition of Solitude Mountain Resort the following year. Vail Resorts has completed a series of transactions as well, most notably for Whistler Blackcomb in Canada in 2016. Just months before the PCMR sale, the Cumming family of Powdr Corp. acquired a majority interest in Snowbird Ski and Summer Resort.
The sale of PCMR to Vail Resorts brought both excitement and trepidation to the community. Many saw opportunity in Vail Resorts’ plans to link PCMR and Canyons Resort into a single property under the PCMR moniker. It would be for the moment the largest mountain resort in the U.S. and attract the vast numbers of skiers and snowboarders who held an Epic Pass. The expected increases in skiers and snowboarders would lift Park City businesses as hotels, restaurants and nightclubs filled with people who would spend at least some of their time in Park City shopping, dining and drinking. But others were worried about the corporatization of the community with the New York Stock Exchange-listed Vail Resorts owning PCMR, a concern that was crystallized in 2016 as Vail Resorts pursued a trademark on the name “Park City” as it applies to a mountain resort before abandoning the push amid a public outcry from people disgusted that a firm like Vail Resorts could hold a trademark for the community’s name. There were also those who were leery of the impact on the Park City infrastructure, such as roads, the transit system and parking, as the crowds swelled.
The competing lines of thinking at the time have essentially been confirmed in the five-plus years since the sale of PCMR to Vail Resorts. The tourism industry has enjoyed a string of lucrative years, as the extensive Vail Resorts marketing efforts have drawn large crowds to Park City. The people who were concerned when the resort was sold remain worried after watching the arrival of more national-level or international retailers in Park City, seeming to have been influenced to open locations along Main Street with the arrival of Vail Resorts. Complaints about traffic over the past five years have appeared to increase sharply. There has also been a continuing community anxiety with what many see as a corporate vibe in Park City since the Vail Resorts acquisition even though the former owner of PCMR is itself one of the industry’s largest firms.
As the decade ends, the 10 years of change have left some Parkites wondering whether the future of Park City is as bright as a bluebird day on the slopes, as it appeared to be at PCMR in 2012. Or, whether something is afoot, and perhaps not right, as was actually the case at the resort.
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