PARK CITY, Utah — It’s a battle of ski resort titans that could bring a hostile takeover at Park City Mountain Resort.
A company managed by Vail Resorts Inc. is trying to evict the Park City resort from 3,700 acres of ski terrain — a fight that took a turn in a court hearing Friday.
Vail Resorts recently took over neighboring Canyons ski area from Talisker Corp., a longtime real-estate operator around Park City that owns much of the land at Park City Mountain Resort.
The Vail-Talisker combination argues that Park City Mountain Resort waited too long to renew a sweetheart lease granted decades ago by a mining company. Park City Mountain Resort was served an eviction notice Aug. 28 demanding it get off the land and leave chair lifts and ski lodges behind.
On Friday, 3rd District Judge Ryan Harris ordered Park City Mountain Resort to turn over 22 confidential emails it traded with attorneys that could explain why or how the resort backdated a letter trying to renew the lease. Harris said he will review the emails first to determine which, if any, Vail and Talisker can use to press their case for eviction.
The dispute escalated last week when a former Vail Resorts’ lawyer, acting for Talisker Land Holdings LLC, accused Park City Mountain Resort of backdating the letter to make it appear it had renewed its lease for 29 years.
Under that lease, Park City Mountain Resort pays just $155,000 a year for its ski terrain.
Canyons officials have said they pay $3 million a year to lease much of their ski area from independent landowners. And Vail says it’s paying $25 million a year for rights to operate Canyons, Utah’s largest ski area. With that, Vail is taking up the fight against Park City Mountain Resort.
Vail said last week it wasn’t trying to “take any action that would prevent PCMR’s ability to operate their resort during the upcoming 2013-2014 ski season.”
Vail chief Rob Katz told investors in May the possibility of taking over Park City Mountain Resort “could add significant value to our opportunity.” The Colorado-based company is entering the Utah ski market for the first time.
An escalating lease dispute could damage Park City’s economy, a major tourist hub, if it forces Park City Mountain Resort to shut down this winter or next, said Alan Sullivan, an attorney for the ski area’s corporate entities.
Park City has three ski areas, including independently owned Deer Valley. For Park City Mountain Resort, the dispute could depress season-pass sales.
Sullivan said a shutdown would undercut local business, depress condo rentals and furlough 1,200 employees. Park City Mountain Resort says it owns its base area, parking lots and water-rights for snowmaking outright, making it difficult for Vail to operate the resort on their own.
“We think the court needs to understand the consequences of shutting down the resort,” Sullivan said.
The case began in March 2012 when the parent company for Park City Mountain Resort sought a court declaration that it properly renewed the lease and can’t be evicted.
The recent eviction notice was “obviously intended to interfere with our business,” said Jenni Smith, president and general manager of Park City Mountain Resort. Vail and Talisker have rejected “our reasonable offers” to settle the matter, she said Friday.
Vail Resorts operates 10 ski areas, including four in Colorado.
Park City Mountain Resort is owned by Powdr Corp., which operates seven major U.S. ski areas, from Vermont’s Killington to Oregon’s Mount Bachelor.