UPDATE, Sept. 6:
Park City Mountain Resort has until the end of the day Friday, Sept. 12 to post a $17.5 million bond in order to operate the resort for the 2014-15 ski season. During the hearing, which postponed from Aug. 27 to Sept. 5, 3rd District Court Judge Ryan Harris explained how he set the bond amount after throwing out both parties calculations. Park City has not stated whether it plans to post the bond amount in order to stay an eviction from the land it had been leasing from Talisker Land Holdings, LLC.
Look for an more complete update in The Mountain Times, Sept. 11 edition.
Killington and Pico’s parent company anticipates hearing to determine Park City lease, Aug. 27
By Karen D. Lorentz
Further developments in the Park City Mountain Resort (PCMR) legal dispute indicate a cloudy outlook for the resort.
The dispute concerns the right of PCMR to continue to lease resort land on the Talisker Land Holdings, LLC, section of the mountain. PCMR is owned and operated by Powdr Corp., a private company headed by the Cumming family. Killington and Pico Mountains are two of Powdr’s eight resorts but, like its other siblings, appears unaffected by PCMR’s situation.
PCMR faces eviction since the court found that its lease had legally expired in 2011. Judge Ryan Harris, who is presiding over this case, stayed the eviction order pending mediation he ordered on June 19 with an Aug. 15 deadline. However, both sides filed for an extension to Aug. 24, which he granted. On Aug. 25, they requested another extension to 5 p.m. Aug. 29. Neither side has commented on those negotiations in accordance with Utah state law.
While that was seen as a positive sign, the better one was Talisker/Vail Resorts offering to delay the eviction order for two years provided PCMR posted a bond. Vail Resorts received the lease to Talisker’s 2,800 acres of resort land (formerly leased to PCMR) at no extra charge, along with the right to take over the PCMR/Talisker lawsuit when they leased the Canyons from Talisker.
Judge Harris scheduled an Aug. 27 hearing, at which time he is expected to either implement the eviction, further postpone it and set a bond amount.
Both parties filed papers in Utah’s Third District Court for Summit County, as to what the bond amount should be.
PCMR has publicly stated through its attorney Allan Sullivan that they are looking for “a reasonable amount.” In papers filed Aug. 15, PCMR argued that the only amounts that should be included in the bond are “the fair rental value of the leased land from May 1, 2011 to May 29, 2013, together with the reasonable amount of Talisker’s attorney fees incurred in connection with the unlawful detainer counterclaim since October 2013.”
In an Aug. 19 statement, Sullivan stated: “Vail seeks a very high bond that includes as ‘rent’ a significant percentage of PCMR’s annual earnings. By any standard, fair market rent for the Resort’s upper ski terrain cannot be calculated based on annual earnings from the full resort operations. Neither Vail or Talisker own or control other assets essential to the Resort’s operation.
“By seeking to include a significant percentage of PCMR’s annual earnings in its bond calculation, Vail is making an unreasonable demand to increase the pressure on PCMR and the community.”
According to The Park Record, “PCMR has indicated in a court filing the judge should set a bond at between $1,021,308 and $6,559,616.” That amount was based on an annual lease rate of $225,000 to just over $1 million for damages, attorney fees, and rent from May 1, 2011 to January 31, 2015, according to the Salt Lake City Tribune.
A Forbes online story noted that PCMR said, “landowner Talisker Corp. was demanding $7.7 million a year, before it entered into a $25 million-a-year lease arrangement with Vail under which the Colorado ski resort operator took over control of the litigation.”
Forbes also reported that “Park City said the rent should be no more than $1 million a year, while Vail’s lawyers provided a redacted version that indicated something closer to $14 million.” Forbes writer Daniel Fisher provided several estimates of the land’s value according to Vail Resort information and PCMR’s estimates. It seems the judge will have a difficult decision in setting the bond.
On Aug. 22, Vermont Public Radio broadcast comments from the CEOs of Vail Resorts and Powdr Corp. PCMR CEO John Cumming, while acknowledging “an administrative error” made with PCMR’s late lease filing, continued to express his view that the situation is tantamount to a hostile takeover, noting, there is”no moral or ethical obligation to be taken advantage of.” He was referring to his belief that Vail Resorts took advantage of the PCMR/Talisker lease situation while PCMR was “in negotiations with our landlord.” Due to the complexity of the situation, he said PCMR’s alternative use is to offer a action sports adventure camps, stressing that as a distant second choice.
Vail Resorts CEO Rob Katz dismissed a question regarding the lease, saying it was history and he wasn’t going to revisit what had happened or the court’s decision, adding Talisker had declined PCMR’s offer. He maintains Vail came in “after the fact.” Asked if PCMR will close, he said he remains “incredibly optimistic that won’t happen.”
But based on the interviews and bond filings, the stalemate doesn’t seem to have abated despite both sides saying they want to do “the right thing” for Park City.
And as winter approaches, residents and business owners are understandably nervous as a closure of the ski resort could mean millions in economic impacts. The only certain thing is that PCMR’s future hinges on a judge’s very difficult decision(s) unless mediation proves fruitful, making for a forecast that is cloudy, at best.