I wonder if it be worth SR putting this down on SouthRidge for some extra summertime revenue?  I am sure it would cost a fortune to install, but I would pay to try it out!  No ice!

https://www.youtube.com/watch?v=OJpis0TxxPA

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Just wait, Les may recreate that rush an hour North of SR very soon.

Max Hart said:

Les Otten did figure it out, and was very successful for a long time at Sunday River. He made a name for Sunday River by expanding it and installing one of the finest snowmaking systems ever. There's a reason this moutain's moto was "The Most Dependable Snow In New England" for a very long time. He turned this place from a four lift (3 T-bars, 1 double) ski area into one of the largest and most visited mountains in the east in only 15 years. The only reason that he could do that is because he was increasing skier visits by the thousands ever year. That just doesn't happen anymore because the skier crowd isn't growing the way it did in the 1980s.

In my opinion, LBO Resort Enterprise Corp. (created in 1994 and consisting of Sunday River, Attitash, Sugarbush, and Cranmore in 1995) could have survived. It was the merger with Sherburn-Killington-Investments Ltd. in 1996 that formed the American Skiing Co. Then Les Otten had his work cut out for him, coming out of a bad snow year and having to rebuild his six Yan detachable quads. Then he went west, and gobbled up Heavenly, Steamboat, and what would become the Canyons. By 1998 he operated 11 ski areas, 8 in NE and 3 out west. Then what really killed him was over-investing in his western mountains, notably the Canyons. He bought so many lifts in 1997. He installed 16 lifts in 1997, 8 of them at the Canyons, and 7 in 1998, totaling 23 installations in 2 construction seasons. Nobody has repeated that yet. This caused ASC to slide into serious financial trouble, and that is where everything went wrong.  

cnr1089 said:

The more I see "how the sausage" is made, the more I wonder why anyone invests in east coast ski mountains at all. I always figured that ASC had it figured out in the 80s by investing heavily in snow making more then anyone else, but maybe it was more of just pushing doubt out to later years until everything collapses (and I understand the downfall of ASC is more complex then the economics of SR).

Is snow the most important variable? Everything I am reading is that Vail (vail, right?) is the only company making money because they are focusing on 365/year activities, rather then just winter time.  Sunday River is a long way from that.  I hear a ton of non-skiers talk about going to Jay Peak (for the pump house water park), but if it was really the magic bullet, I think you would see investors make it happen (there is a dead water park about two miles away from Sunday River, but I have never seen it open). Looks like it cost $20m in 2011.  Although maybe not so profitable, if you read this article https://ski.curbed.com/2016/4/26/11506852/jay-peak-fraud-closure

I hate to say it but I agree with you.  They totally lost touch with what they did best when they started in with the Real estate push. Les Otten always said that a successful ski area caters to what is most important to skiers, the product.  So lifts and snowmaking was the focus from day one.  I remember this clearly.  You have to wonder if his co-investors steered him in the wrong direction.  Many areas have fallen prey to the real estate bug.  Just look at the early 80's at Sugarloaf.  They build that village with all the condos and a few years later they went Chapter 11.
 
Junior said:

Overexposure to Real Estate is what killed Otten. He had the right idea but took the "too much too fast" route. He did have the right idea, jut tried to execute it too fast with debt he could never pay back.

When the lenders came knocking, that was the end.

Lousy snow winters, no. Failing infrastructure, no. Rebuilding lifts, no.

It was taking on huge debt to build real estate and buy other resorts.

That's what did good old Les in. Too much too fast....

Yep, you beat me to it but it was pretty much the same scenario that put Sugarloaf into chapter 11 in the early 80s. 

Hawk said:

I hate to say it but I agree with you.  They totally lost touch with what they did best when they started in with the Real estate push. Les Otten always said that a successful ski area caters to what is most important to skiers, the product.  So lifts and snowmaking was the focus from day one.  I remember this clearly.  You have to wonder if his co-investors steered him in the wrong direction.  Many areas have fallen prey to the real estate bug.  Just look at the early 80's at Sugarloaf.  They build that village with all the condos and a few years later they went Chapter 11.
 
Junior said:

Overexposure to Real Estate is what killed Otten. He had the right idea but took the "too much too fast" route. He did have the right idea, jut tried to execute it too fast with debt he could never pay back.

When the lenders came knocking, that was the end.

Lousy snow winters, no. Failing infrastructure, no. Rebuilding lifts, no.

It was taking on huge debt to build real estate and buy other resorts.

That's what did good old Les in. Too much too fast....

Rippy, we are up at SL this weekend, want to hang out?  You can show me around, since SR sucks so bad I am thinking about relocating our skiing operations.  Will be out early AM Sat.  Mogul comp this weekend.

Ripsaw said:

A lot of golf courses made the same mistake. 

I know, thinking about it.  Not sure we will have much time.  I was registered to ride the Bethel event but plans changed.....I will be tied up w the event most of the weekend.  

Ripsaw said:

I have a family commitment in VT this weekend or I would. Be sure to bring your fat bike. The riding is really good and their having a Fat Bike Festival at the Outdoor Center. 

MonkeyBrook said:

Rippy, we are up at SL this weekend, want to hang out?  You can show me around, since SR sucks so bad I am thinking about relocating our skiing operations.  Will be out early AM Sat.  Mogul comp this weekend.

Ripsaw said:

A lot of golf courses made the same mistake. 

True to all of that.  But correct me if I'm wrong, didn't most of the improvements on hill in the 80's and 90's get driven by real estate sales in all the on mountain condos and townhomes at SR.  Not to mention, that's how LBO got access to inexpensive (for the resort) lodging in the early days to drive skier numbers as well?

Zen Master said:

Yep, you beat me to it but it was pretty much the same scenario that put Sugarloaf into chapter 11 in the early 80s. 

Hawk said:

I hate to say it but I agree with you.  They totally lost touch with what they did best when they started in with the Real estate push. Les Otten always said that a successful ski area caters to what is most important to skiers, the product.  So lifts and snowmaking was the focus from day one.  I remember this clearly.  You have to wonder if his co-investors steered him in the wrong direction.  Many areas have fallen prey to the real estate bug.  Just look at the early 80's at Sugarloaf.  They build that village with all the condos and a few years later they went Chapter 11.
 
Junior said:

Overexposure to Real Estate is what killed Otten. He had the right idea but took the "too much too fast" route. He did have the right idea, jut tried to execute it too fast with debt he could never pay back.

When the lenders came knocking, that was the end.

Lousy snow winters, no. Failing infrastructure, no. Rebuilding lifts, no.

It was taking on huge debt to build real estate and buy other resorts.

That's what did good old Les in. Too much too fast....

Kind of true in a sense, but it all boiled down to that tremendous amount of debt he took on.

It didn't matter what improvements were driven by the real estate sales. If you can't pay back the loan, you can't invest. If you can't invest, no one will lend you more money to try and make improvements on top of paying back the original debt.

OPM is the American way, I get it. It is also the way to a quick downward spiral, which is exactly what happened to Otten.

And the dirt cheap ASC passes didn't help either. You give way your product to gain market share, you kill the market profitability you had to begin with.

Like I said, too much too fast. And so it goes....
 
MachSki said:

True to all of that.  But correct me if I'm wrong, didn't most of the improvements on hill in the 80's and 90's get driven by real estate sales in all the on mountain condos and townhomes at SR.  Not to mention, that's how LBO got access to inexpensive (for the resort) lodging in the early days to drive skier numbers as well?

Zen Master said:

Yep, you beat me to it but it was pretty much the same scenario that put Sugarloaf into chapter 11 in the early 80s. 

Hawk said:

I hate to say it but I agree with you.  They totally lost touch with what they did best when they started in with the Real estate push. Les Otten always said that a successful ski area caters to what is most important to skiers, the product.  So lifts and snowmaking was the focus from day one.  I remember this clearly.  You have to wonder if his co-investors steered him in the wrong direction.  Many areas have fallen prey to the real estate bug.  Just look at the early 80's at Sugarloaf.  They build that village with all the condos and a few years later they went Chapter 11.
 
Junior said:

Overexposure to Real Estate is what killed Otten. He had the right idea but took the "too much too fast" route. He did have the right idea, jut tried to execute it too fast with debt he could never pay back.

When the lenders came knocking, that was the end.

Lousy snow winters, no. Failing infrastructure, no. Rebuilding lifts, no.

It was taking on huge debt to build real estate and buy other resorts.

That's what did good old Les in. Too much too fast....

All of the original housing was build inexpensively and was not the issue.  They got a good return on those.  When ASC took over it was when they started in with the Summit, the expensive units on Tempest and Grand Jordan and the golf course.  They started to put these at other resorts also.  Vey expensive and the return was not as good as they thought.
 
MachSki said:

True to all of that.  But correct me if I'm wrong, didn't most of the improvements on hill in the 80's and 90's get driven by real estate sales in all the on mountain condos and townhomes at SR.  Not to mention, that's how LBO got access to inexpensive (for the resort) lodging in the early days to drive skier numbers as well?

Zen Master said:

Yep, you beat me to it but it was pretty much the same scenario that put Sugarloaf into chapter 11 in the early 80s. 

Hawk said:

I hate to say it but I agree with you.  They totally lost touch with what they did best when they started in with the Real estate push. Les Otten always said that a successful ski area caters to what is most important to skiers, the product.  So lifts and snowmaking was the focus from day one.  I remember this clearly.  You have to wonder if his co-investors steered him in the wrong direction.  Many areas have fallen prey to the real estate bug.  Just look at the early 80's at Sugarloaf.  They build that village with all the condos and a few years later they went Chapter 11.
 
Junior said:

Overexposure to Real Estate is what killed Otten. He had the right idea but took the "too much too fast" route. He did have the right idea, jut tried to execute it too fast with debt he could never pay back.

When the lenders came knocking, that was the end.

Lousy snow winters, no. Failing infrastructure, no. Rebuilding lifts, no.

It was taking on huge debt to build real estate and buy other resorts.

That's what did good old Les in. Too much too fast....

The Grand Summit was pre-ASC, maybe even the Jordan Grand as well but I could be off on that one. 

Hawk said:

All of the original housing was build inexpensively and was not the issue.  They got a good return on those.  When ASC took over it was when they started in with the Summit, the expensive units on Tempest and Grand Jordan and the golf course.  They started to put these at other resorts also.  Vey expensive and the return was not as good as they thought.
 
MachSki said:

True to all of that.  But correct me if I'm wrong, didn't most of the improvements on hill in the 80's and 90's get driven by real estate sales in all the on mountain condos and townhomes at SR.  Not to mention, that's how LBO got access to inexpensive (for the resort) lodging in the early days to drive skier numbers as well?

Zen Master said:

Yep, you beat me to it but it was pretty much the same scenario that put Sugarloaf into chapter 11 in the early 80s. 

Hawk said:

I hate to say it but I agree with you.  They totally lost touch with what they did best when they started in with the Real estate push. Les Otten always said that a successful ski area caters to what is most important to skiers, the product.  So lifts and snowmaking was the focus from day one.  I remember this clearly.  You have to wonder if his co-investors steered him in the wrong direction.  Many areas have fallen prey to the real estate bug.  Just look at the early 80's at Sugarloaf.  They build that village with all the condos and a few years later they went Chapter 11.
 
Junior said:

Overexposure to Real Estate is what killed Otten. He had the right idea but took the "too much too fast" route. He did have the right idea, jut tried to execute it too fast with debt he could never pay back.

When the lenders came knocking, that was the end.

Lousy snow winters, no. Failing infrastructure, no. Rebuilding lifts, no.

It was taking on huge debt to build real estate and buy other resorts.

That's what did good old Les in. Too much too fast....

True, it may have even pre-dated LBO Holdings days.  I believe the Attitash Grand at Bear Peak went in before LBO Holdings evolved into ASC.  Still, I agree with Hawk that the trend was turning g towards too rapid a build out on real estate.  ASC also stretched too thin with all the resorts it swallowed up.  And too many grand plans (K and the Pick interconnect, Canyons, Heavenly Gondola, etc).

Zen Master said:

The Grand Summit was pre-ASC, maybe even the Jordan Grand as well but I could be off on that one. 

Hawk said:

All of the original housing was build inexpensively and was not the issue.  They got a good return on those.  When ASC took over it was when they started in with the Summit, the expensive units on Tempest and Grand Jordan and the golf course.  They started to put these at other resorts also.  Vey expensive and the return was not as good as they thought.
 
MachSki said:

True to all of that.  But correct me if I'm wrong, didn't most of the improvements on hill in the 80's and 90's get driven by real estate sales in all the on mountain condos and townhomes at SR.  Not to mention, that's how LBO got access to inexpensive (for the resort) lodging in the early days to drive skier numbers as well?

Zen Master said:

Yep, you beat me to it but it was pretty much the same scenario that put Sugarloaf into chapter 11 in the early 80s. 

Hawk said:

I hate to say it but I agree with you.  They totally lost touch with what they did best when they started in with the Real estate push. Les Otten always said that a successful ski area caters to what is most important to skiers, the product.  So lifts and snowmaking was the focus from day one.  I remember this clearly.  You have to wonder if his co-investors steered him in the wrong direction.  Many areas have fallen prey to the real estate bug.  Just look at the early 80's at Sugarloaf.  They build that village with all the condos and a few years later they went Chapter 11.
 
Junior said:

Overexposure to Real Estate is what killed Otten. He had the right idea but took the "too much too fast" route. He did have the right idea, jut tried to execute it too fast with debt he could never pay back.

When the lenders came knocking, that was the end.

Lousy snow winters, no. Failing infrastructure, no. Rebuilding lifts, no.

It was taking on huge debt to build real estate and buy other resorts.

That's what did good old Les in. Too much too fast....

The eastern Grand Summits are a different beast than the western Grand Summits, which are much more "grand".  Eastern properties sold relatively quickly during/after buildout.  Western units did not keep up with debt pay down.  Steamboat was the end of the end, falling into receivership and most of the units being auctioned for "cheap".  There was also a local backlash -especially Steamboat - over being part of a conglomerate.  No buy in by "local" community - more a mindset of the typical customer vs just being a local resident.

The nail in the coffin was Oak Hill Capital.  Les sold them a rosy picture that wasn't reality, especially in a time when the economy was headed into a recession (2000/01).  Oak Hill is Bass family money, Phil Knight money, and Bill Gates money to name key investors.  Typically Oak Hill averaged 25%(+) returns and quickly.  When OH fully assessed what they had invested in, they went into "capital management mode" and took control from Les, issued themselves preferred stock, paid management fees back to OH, and dumped the properties.  ASC was in a world of hurt and might have recovered with patient mentoring, but OH had no patience for the idea of growing a (long-term) vision.

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