Vail Resorts makes buyout offer to PCMR
March 25, 2014
Vail Resorts on Tuesday offered to purchase the Park City Mountain Resort base area and the parking lots, a buyout option that could settle the lawsuit between PCMR and Talisker Land Holdings, LLC.
It was an unexpected move that came shortly before important court dates are scheduled in the lawsuit. The offer was made in a five-page letter from Vail Resorts CEO Rob Katz to John Cumming, who is the CEO of PCMR parent Powdr Corp. The letter was released midday Tuesday.
In the letter Katz said Vail Resorts would pay "fair market value for any of the assets you have that would be helpful to us in operating the resort." The letter says Vail Resorts and Powdr Corp. could retain independent appraisers to reach a price.
"While each situation is unique, there have been countless appraisals performed on land and parking facilities at the base of ski resorts. If you were willing to sell those assets, we are confident we can reach a fair price for both parties and ensure the continued smooth operation of the resort," Katz wrote.
The letter did not identify a price.
Vail Resorts is overseeing the Talisker Land Holdings, LLC side of the lawsuit as a result of the firm’s long-term agreement to lease and operate Canyons Resort. The agreement could be expanded to include the disputed Talisker Land Holdings, LLC acreage underlying most of PCMR’s terrain. The lawsuit centers on PCMR leases of the Talisker Land Holdings property.
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The letter, meanwhile, offered another option that calls for Powdr Corp. building and operating an action sports center to be known as Woodward Park City but Vail Resorts funding the associated skier parking and the skier facilities.
"In this way, you could build and operate the Woodward facility, profit from any residential or commercial development on the site, AND provide continued access to the mountain and the ski facilities," the letter said.
Katz covered a range of topics in the letter, including the lawsuit, Vail Resorts’ desire for negotiations starting last summer, access to the disputed terrain and the fate of PCMR’s employees.
"Everyone at Vail Resorts is very cognizant of how difficult this has been for PCMR, its employees, its guests, its partners and the Park City community. But, if PCMR should lose its lease, PCMR alone needs to take responsibility for that outcome," he says.
Some highlights from the letter included:
"However, if a Court ultimately rules that PCMR’s lease has expired, then Vail will become Talisker’s tenant on that land and it is absolutely our intention to utilize and operate that terrain, which was Talisker’s intent in leasing it to us," the letter said.
"There seems to be a concern in the community that if you lose your lease, you could use your base lands to block access to the ski mountain through that portal. Given that much of the Town’s planning and investment has relied on that portal, we think it’s important to let folks know that’s not going to happen. Candidly, we are not sure why you would ever consider doing that. Even if you lose your lease to the mountain, you have a very valuable piece of property. But its value comes from the access it allows to the ski mountain," the letter said.
"More important than almost anything else is how any of this may impact the PCMR employees. Obviously, this is PCMR’s responsibility. However, should PCMR lose its lease to the mountain, we want to make it clear that our Company is willing to hire substantially all of the PCMR employees who are involved with running the resort," the letter says.
The complete letter is posted on The Park Record website at: http://extras.parkrecord.com/video/katzlettertoCumming.pdf
PCMR won’t agree to ‘takeover’
PCMR Tuesday afternoon released a prepared statement from John Cumming, the CEO of resort parent Powdr Corp., in response to Katz’s letter:
"We have repeatedly made it clear to Vail that PCMR is interested in exploring all possible solutions that will preserve the independence of PCMR as the nation’s premier family ski resort. What we won’t agree to is a Vail takeover. Vail’s domination of the ski market in Summit County would be bad for our community, bad for our guests, and bad for our employees.
"If Vail and Talisker are interested in having a public discussion about their negotiation strategy, they should be willing to disclose documents to the public. PCMR has sought to make this information public, including Talisker’s takeover proposal, only to have such requests blocked by Vail and Talisker in court. People should not be swayed by Rob’s attempt to try the merits of this case in the press. We will present our arguments to the court beginning next week."