On November 27, 2019

New Sugarbush owners promise few immediate changes

Win Smith, former owner of Sugarbush Resort, discusses the resort’s recent acquisition by Alterra during a community meeting in Warren on Wednesday, November 20, 2019. Photo by Glenn Russell/VTDigger

By Anne Wallace Allen/VTDigger

WARREN — Rusty Gregory, the CEO of Sugarbush Resort’s new parent company, knew his audience was worried that corporate ownership would change the nature of the ski area that drives their local economy.

So Gregory gave out his mobile phone number from the stage, first to dozens of employees who attended a meeting to hear from Alterra Mountain Co. executives, and then to more than 200 community members who gathered later Wednesday night for a similar presentation.

Gregory said he hoped stakeholders would call him to let him know what Alterra was getting right as it assumed ownership of the resort, and what it was getting wrong.

“This is a place heading in a great direction already,” said Gregory, flanked by other executives at a meeting room at the Warren resort. He promised that the Sugarbush faithful would see barely any changes, especially in the first year. “Our first goal is to not do any damage to that.”

Win Smith, Sugarbush’s owner for the last 18 years, announced Nov. 13 that the Colorado-based Alterra will purchase the year-round resort effective at the start of the new year. That announcement is just one of many recently as large resorts are purchased by large companies.

Smith said in a letter to the community that the recent acquisition of Peak Resorts by Vail Resorts this year was “the tipping point” in his decision to sell.

In the East, only three major resorts remain independent, Smith said: Sugarbush, Jay Peak and Waterville Valley. He defined “major” as more than 250,000 annual skier visits.

“Looking out at the horizon, it became very apparent to us that remaining totally independent without being owned or partnering would make it increasingly difficult to be viable in the long run,” he said.

Sugarbush, founded in 1958, is a key feature in the Mad River Valley with trails on Mount Ellen and Lincoln Peak, joined by a two-mile long quad lift, billed as the longest and fastest in the world. The ski area reports 111 trails and 4,000 acres of skiable terrain.

When the Sugarbush sale is complete, Alterra will own 15 resorts, including Steamboat in Colorado, Squaw Valley and Mammoth in California, Stratton in Vermont, Tremblant in Quebec, and CMH, a heli-skiing company in the Canadian resort town of Banff. The privately held company has 25,000 employees, Gregory said.

Gregory and Smith said the move will help Sugarbush with economies of scale in areas like IT, staff health insurance, and equipment purchases.

“Not everyone likes me saying this but it’s the truth: Doing business in Vermont is expensive,” said Smith, citing taxes, regulations and a lower-than-average unemployment rate of around 2%. “With Alterra, there are ways of offsetting other costs. If we buy a groomer, we have very little negotiating power; if Alterra buys 12 or 13, it is different.”

Perhaps the largest example of that scale is the Ikon pass — an offering from Alterra, Aspen and several other companies. The pass provides entry to more than 40 ski areas and other destinations worldwide — including Zermatt in Switzerland — for one set price and offers five days at partner areas including Killington. Vail’s version of the popular multi-resort pass, created before the Ikon, is the Epic pass. Sugarbush partnered with Alterra last winter to admit Ikon passholders, and all of the executives at the meeting Wednesday, including Smith, cited the pass as a major asset.

“The Ikon pass gives stability in what can be a very volatile business,” said CFO Tim Donahue.

Smith and other investors purchased Sugarbush in 2001 from American Skiing Co. That large company, which later broke up, came under heavy criticism from locals in the years after its purchase for the way it managed the ski area.

Since 2001 Sugarbush has invested $74 million in mountain improvements including seven new lifts, significant upgrades to its snowmaking system, and the revitalization of the Lincoln Peak Base area, complete with the Clay Brook Hotel and Residences and the Gate House Lodge, two skier services buildings, the Farmhouse and Schoolhouse, and new slopeside residences.

This time around, Gregory said, the large parent company will put Sugarbush’s existing culture first. He and Smith said all 165 year-round employees – a workforce that swells to 1,000 in winter — will be retained; Smith, 70, will continue to be in charge locally.

Gregory said Alterra will focus on working with guests, employees and financial stakeholders.

“To us, the company is a lot of people beyond just the ownership and the bank that lends us money,” he told community members. “It’s about learning, about understanding how you think, and not thinking we know anything more than we did when we first talked to Win about partnering.”

Matt Lillard, the general manager of the neighboring Mad River Glen cooperative ski area, said Wednesday he wasn’t surprised when he heard Sugarbush would be sold.

“It makes sense, based on where the industry is going,” Lillard said. “I’m glad it’s Alterra. From watching other consolidations and buyouts around the state, I think Alterra has a very good plan of letting each area have their own distinct character.”

The Alterra executives didn’t have easy answers for the many who asked about sustainability initiatives. Ski areas are among the largest energy users in Vermont.

Gregory said environmental responsibility is one of Alterra’s core values.

“It’s a very complex thing but it’s very important, and in a lot of our resorts we’re not very far along,” he said. “Not as far along as you are here in Vermont. There’s a real sense of urgency.”

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