Vail Resorts versus Intrawest?
VAIL – Officials at Vail Resorts say they will see Intrawest in court if the Vancouver, British Columbia-based ski resort developer pursues plans to develop and manage the Winter Park ski area.
Thursday, officials from Intrawest and the City and County of Denver announced plans to develop the base area and make on-mountain improvements. Winter Park operates on 8,000 acres of private and U.S. Forest Service land. It has 2,886 skiable acres and 22 lifts, boasting an average 988,000 skier visits per year. The City of Denver chose Intrawest to develop an 1,100-unit village on 175 acres – 75 of which are developable – for the ailing Grand County ski resort, which last year lost $2.3 million. Vail Resorts officials say, “Not so fast.”
In 1996, Intrawest and Vail Resorts signed a non-compete agreement that indicates Intrawest – which is developing the base area of Vail Resorts-owned Keystone – cannot develop real estate at resorts in which it doesn’t hold a majority interest, said Porter Wharton III, Vail Resorts’ senior vice president of public affairs.
Winter Park, located near Fraser in Grand County, is owned by the City and County of Denver, and officials from those two entities announced Thursday morning they have no intention of selling the resort.
“Our position regarding Intrawest’s Winter Park agreement has never changed,” Wharton said. “Just as Vail Resorts never challenged Intrawest’s purchase of Copper Mountain, we will not stand in the way of Intrawest moving forward at Winter Park, provided that in doing so, they do not violate their contractual non-compete obligations.”
Wharton said Thursday evening, however, that Intrawest’s announcement Thursday morning makes Vail Resorts officials believe Intrawest might be breaching the no-compete provisions.
“If Intrawest has not bought a 50 percent or more controlling interest of Winter Park, then Intrawest is in contractual breach,” Wharton said. “Still, to this day, Vail Resorts has not yet seen the documentation that details the agreement between Intrawest and Denver. If Intrawest has indeed violated its contractual obligations, then we will be left with no choice other than to protect our company’s interests by commencing litigation in the very near term.”
According to Wharton, Denver officials have been told repeatedly by Intrawest they will be able to proceed with development at Winter Park. Intrawest officials have been reported as saying the agreement with Vail Resorts allows real estate development.
“Our issue in this matter is not with the City and County of Denver,” Wharton said. “Rather, it is with Intrawest, a business partner in our Keystone Real Estate Development Co. and with whom we have had a contractual agreement for nearly 10 years – and who now appears at first blush to be violating its commitments to us.”
Gary Raymond, president of development for Intrawest, disagreed.
“If we felt we were breaking our contract with Vail, we wouldn’t be in this transaction,” he said, adding that Intrawest has a controlling interest of Winter Park because it will run the resort, pay its bills and take all the risks.
Vail Resorts, owner of Breckenridge, Keystone, Vail and Beaver Creek resorts in Colorado, could have its work cut out for it if Intrawest proceeds with development at Winter Park. Intrawest is known for transforming regional day-ski areas, including Mount Tremblant in Quebec, into destination resorts.
From a business standpoint, that transition is significant. Destination skiers spend more than day skiers because they require accommodations, meals and other services.
Others that vied for development rights at Winter Park included East West Partners and Jerry Jones, a former vice president of Beaver Creek who now is developing Grand Elk, a 1,000-unit golf course community near Granby.
Jones said Intrawest could steer Winter Park into profitability on the strength of real estate sales – instead of depending on lift ticket sales as it now does.
The potential sales in real estate of $700 million is based on 1,400 units at an average of 1,200 square feet and a $450-per-square-foot sales price. Another slopeside property in Winter Park, the Gerald Hines-developed Zephyr Lodge, presold for more than $400 per square foot.
Jones said the development potential in Winter Park is significant because there is enough available land and because recent improvements to the Berthoud Pass section of Highway 40 make it a much easier drive from Denver.
The development also will provide Intrawest the chance to package its pass opportunities between Winter Park and Copper Mountain.
– The Associated Press contributed to this story.
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