Wall Street woes spreading to ski resorts

Big Mountain's financial health is good, officials say

By RICHARD HANNERS / Whitefish Pilot

Word that the Wall Street meltdown has led to layoffs at the Moonlight Basin ski resort had some locals concerned about the future of Whitefish Mountain Resort.

By mid-September, the ski resort south of Bozeman had spent $100 million on construction and lined up another $70 million in financing, thanks to its primary banking partner for the past year, Lehman Brothers.

But with the giant Wall Street financial firm declaring bankruptcy several weeks ago, Moonlight Basin's future turned cloudy, and ski resort CEO Lee Poole announced Oct. 9 that 90 employees were temporarily laid off. Poole, however, vowed that the resort would open this season.

Since it opened in 2004, Moonlight Basin has been developing into a four-season resort, with a Jack Nicklaus-designed golf course, a village with hotels, restaurants and stores, and single-family residences.

A ski resort spokesman announced last December that Moonlight Basin was for sale, but the situation changed drastically as the nation's mortgage problems spread into financial markets, and buyers for the resort's mountainside homes grew scarce.

The situation is more drastic at Tamarack Resort, about 90 miles north of Boise, Idaho. Tamarack Resort has amassed $273 million in debt, and investment bank Credit Suisse has sued in federal bankruptcy court to take over the resort.

Tamarack Resort also opened in 2004. Lots were marketed at up to $450,000 apiece, and resort CEO and major stockholder Jean-Pierre Boespflug predicted the project would reach $1.5 billion " including a marina on nearby Lake Cascade.

Boespflug also vows to open the resort this winter, but he's looking for investors and buyers. Construction on the Village Plaza project has stalled and needs an additional $56 million, tennis stars Andre Agassi and Steffi Graf have pulled out of a luxury hotel project, and several banks have foreclosed on the resort's conference center and employee housing.

The fact that Lehman Brothers CEO and chairman Richard Fuld Jr. is a partner in two large Whitefish projects " Block 46 downtown and The Homestead At Whitefish out on Farm To Market Road " had some locals wondering about the financial well-being of other wealthy investors with ties here.

In particular, they were concerned about Bill Foley, who in April 2007 held 61.8 percent of Whitefish Mountain Resort stock, and Michael Goguen, who held 17.9 percent.

" Whitefish Mountain Resort is in a very sound financial position right now," spokesman Donnie Clapp said. " We're very fortunate to have received a significant infusion of cash when Mr. Foley and others became stockholders, enabling us to begin to pay down our debt and complete several needed infrastructure improvements last summer without having to borrow further."

Two years ago, the resort raised about $20 million through stock sold to some of its 35 stockholders. That money was used to build the new Base Lodge, upgrade Chair 1 and Chair 2, install additional snowmaking infrastructure and pay down some debt.

" We're in the best financial shape since I've joined the board in 1995," Whitefish mayor and resort stockholder Mike Jenson said.

Last year was one of the first years in a long time that the resort's operations was " in the black," Jenson said, noting that real estate sales often propped up operations in the past. And compared to the debt load at Moonlight Basin and Tamarack Resort, " Big Mountain debt never reached $10 million," he said.

Clapp said that thanks to streamlining operations, record-breaking snowfall last season and a favorable Canadian exchange rate, " we had one of our most financially successful winter seasons to date in 2007-2008, putting us in a very favorable position as this fiscal year closes."

Whitefish Mountain Resort broke its season-pass sales record for the second year in a row, he said, and advance lodging-reservations are looking good compared to last year and the rest of the industry.

" Our stated goal of turning ourselves into a ski resort that is self-sustaining " one that does not have to resort to real estate development or excessive borrowing to survive " looks to be within reach, and we couldn't be more excited about it," Clapp said. " With the addition of several attractions next summer, including zip lines and an alpine sled, we hope to improve year-round revenue enough that we can begin to move toward a debt-free Whitefish Mountain Resort."

State ski areas post record numbers

A superior snow year across Montana is the reason behind record-high skier numbers at the state's 15 ski areas last season, the University of Montana's Institute of Tourism and Recreation Research reports.

About 1.4 million skier-visits were recorded in 2007-2008, an increase of 14.5 percent over the previous season.

Seven ski areas reported their best seasons ever " Blacktail, Bridger, Discovery, Great Divide, Lookout Pass, Maverick, Moonlight Basin and Turner Mountain.

Whitefish Mountain Resort's biggest year was 2005-2006, when the ski area recorded 304,366 skier-visits. Last year, the Big Mountain saw 296,708 skier-visits.

Big Sky Resort has posted the highest skier-visit numbers over the past 10 years. Its biggest year was also 2005-2006, with 323,000 skier-visits. Last year, the ski area south of Bozeman saw 309,170 skier-visits.

The number of skier-visits at Blacktail Mountain Ski Area, in Lakeside, has more than doubled from its opening season in 1998-1999, when it recorded 19,061 skier-visits. Last year, the ski area saw 41,657 skier-visits.

Recent drought years were tough on Turner Mountain Ski Resort, in Libby. In 2004-2005, the ski area saw 309 skier-visits. Last season, the number was 5,872.