Powdr CEO talks of town’s ‘lawsuit-itis,’ Vail, Snowbird deal
June 6, 2014
Park City Mountain Resort parent Powdr Corp. continues to hope for what it describes as a rational solution to the lawsuit with Talisker Land Holdings, LLC and Vail Resorts centered on most of the land underlying the PCMR terrain.
The CEO of Powdr Corp., John Cumming, though, said in an interview this week there remains a chance that the lawsuit will force the closure of PCMR. The PCMR side since the outset of the case in 2012 has said the resort could be closed if it loses the case.
The case centers on PCMR’s lease of Talisker Land Holdings, LLC acreage. The landowner has won a series of rulings, including that the lease was not renewed in 2011. Talisker Land Holdings, LLC in coming weeks is expected to press for an eviction of PCMR from the disputed land. Vail Resorts is overseeing the lawsuit for Talisker Land Holdings, LLC as part of a long-term deal to lease and operate the Talisker family-owned Canyons Resort. The deal could be expanded to include the disputed terrain at PCMR depending on the outcome of the case.
"Absolutely, look, we’re going through an eviction hearing," Cumming said on Wednesday when asked about the possibility of PCMR closing.
In that scenario, he said, Powdr Corp. would continue to pursue an action sports camp to be called Woodward Park City on land at the PCMR base and on the lower terrain. The land where Woodward Park City would be built is not involved in the lawsuit.
"I can’t imagine that they want to close the place down, although maybe I’m wrong about that. Maybe I’m naive about that. I don’t think it helps Canyons to have Park City Mountain Resort closed, by the way, but maybe I’m wrong about that," Cumming said.
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Cumming reiterated the PCMR side’s intention to dismantle most of the lifts under an eviction. PCMR says the lifts are not affixed to the land and can be removed. Cumming said Powdr Corp. could install the lifts at its other resorts. Talisker Land Holdings, LLC, though, has said the lifts must remain if PCMR is evicted.
"We pray that it will never get anywhere near that . . . not a moment goes by that part of my brain isn’t occupied by prayer right now. I mean, honestly, this is ridiculous. This whole situation is ridiculous. If there was a little bit of Golden Rule in this thing, Rob and I would’ve worked this out already," Cumming said, referring to Vail Resorts CEO Rob Katz.
Cumming said the PCMR side has made offers that he describes as well above market rates. He declined to discuss details. Cumming said he hopes for a "rational outcome" but that the other side has "different plans."
"As painful as this is for me and everybody in my family, that doesn’t mean that we’re going to do something idiotic," he said.
He said PCMR executives and the rank-and-file workers at the resort have performed well and are focused as the lawsuit continues. He praised Jenni Smith, the president and general manager of PCMR, calling her a "tremendous leader" and saying her team is "incredibly dedicated to the place."
"I think they’re dealing with a really, really horrible situation in an incredibly, incredibly solid and grown-up way. I’m so proud of Jenni and her people. I can’t even tell you. And so grateful," Cumming also said.
He said Powdr Corp. intended to invest "a bunch of capital" into PCMR to give the resort "tailwind."
"But, you know, we can’t do that at the moment. Sort of sad," he said.
Cumming, meanwhile, addressed the mood in Park City. The lawsuit has generated widespread chatter in the community, with Parkites taking sides as they delve into the details. Cumming said Parkites are tiring of the case.
"I think people are sick of hearing about it, to be perfectly honest with you. I just think everybody’s got lawsuit-itis, you know. They’re tired. It creates a little anxiety around everybody, you know," he said. "This is a community asset, and there’s a chance it could close, turn into something different. That’s not fun for anybody that loves this place or this town."
He added: "Nobody talks to me about anything. I’m the elephant in the room. I’m the elephant in town. Everywhere I go people are very nice and cordial and don’t really want to talk to me. And I’m not surprised by that. I wouldn’t want to talk to me, either."
Some of the other topics Cumming addressed in the interview, conducted at Powdr Corp.’s offices near Kimball Junction, included:
"I don’t know that we can tell those things, you know, in the moment. I think we tell those things retrospectively . . . I’m definitely not as idealistic at the other end of this as I was going in, for sure. I still believe the golden rule is too far from business. I really do. So that hasn’t changed," Cumming said.
A Wall Street analyst who covers the publicly traded Vail Resorts recently issued a report indicating the Snowbird deal is a hedge by the Cumming family based on the lawsuit against Talisker Land Holdings, LLC. Cumming disagreed with the analyst assessment.
"We would have bought Snowbird regardless of what is happening. We would have invested with the Bass family regardless of what’s happening over here. It’s unfortunate timing. Does it hedge us? I don’t know. Have them call me and explain to me how we hedged, and we’ll see if I agree," Cumming said.
Cumming said it would have been difficult for Powdr Corp. to justify a "major acquisition" like the Snowbird deal amid the uncertainty with PCMR.
"We are not exactly slouches at assessing the value of a ski resort, either. And we are in the town . . . The fact that we have never bought it should suggest something," Cumming said.
He questioned whether Vail Resorts paid a smart price in the Canyons Resort deal. He said he respects Katz, calling him a "smart, shrewd person and a good businessman."
"But I think he did a misguided deal here. Because I don’t see Canyons ever making anything above that lease payment. I think if they can get to the point where they can pay their lease, they’re going to be doing a good bit of work," Cumming also said.
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