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California/Nevada Mt Rose Ownership In 2016-17

Tricia

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Anyone know the status of Mt Rose ownership?
I heard that someone was in serious talks about buying from Fritz, but I haven't heard any follow up.
Mt Rose owner looking to sell

@ScotsSkier @Bobalooski ?
Industry experts say Mt. Rose Ski Tahoe has a number of appealing factors for potential buyers

RENO GAZETTE JOURNAL

Mt. Rose owner 'looking to sell' ski resort


In short, Mt. Rose appears to be a profitable, well-run resort that could attract interest from major ski industry players.

“I don’t think anybody is going to steal that place,” said Tim Cohee, director of the Ski Business and Resort Management program at Sierra Nevada College in Incline Village. “It is very efficient. I suspect it is very profitable.”

Cohee and other industry experts, including Andy Wirth, president of Squaw Valley Ski Holdings, said ski resorts tend to sell for about six times their average annual earnings, or EBITDA, which stands for earnings before interest, taxes, depreciation and amortization.

Overall, ski and snowboard resort visitation has seen slow or flat growth nationally for more than a decade and declined in the far West.

According to the Snow Sports Industry Association, the number of skier visits annually to resorts nationwide was about 54 million in 2014-15, about the same as in 2001-02. It peaked at 60 million in 2010-11.

635902632129860822-RENBrd-03-10-2013-RGJ-1-B008--2013-03-09-IMG-REN0310-SPT-SKI-CP-L-1-1-6A3IJ0HA-L193662390-IMG-REN0310-SPT-SKI-CP-L-1-1-6A3IJ0HA-1-.jpg

(Photo: RGJ file photo)


In the Pacific region, the number of annual visits has fallen from a peak of 12.3 million in 2010-11 to 7 million in 2014-15, although 2015-16 could produce stronger results given the El Nino-driven snow totals in California.
 

ScotsSkier

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Still pretty much radio silence Tricia. There were I believe over 50 expressions of interest initially but the price tag is not insignificant which basically made it not viable for several of the proposed local consortiums. Also there is I understand a strong desire to find a seller that will retain the character and local focus of the mountain rather than a major industry conglomerate and the owners deserve a lot of credit for that. VR is pretty much ruled out (even if they were interested) on competition grounds given their current Tahoe footprint. Still possible that KSL (Squaw) and Mammoth could be players A good strategic argument can be made for either of them. For KSL it gives some higher altitude insurance in a bad snow season. For Mammoth, it could be used as a setting stone for increasing destination traffic. Fly into Reno, ski at Rose same or next day, drive down to mammoth (3 hours v. 6 hours from LA) and then ski again at rose prior to departure from Reno.
 

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I talked to one person who's group got out at $25M, he felt it might go as high as $40M, doesn't mean it will and if not, they might get back in. IMHO, Mammoth makes more sense for the rasons you state. While Squalpine might not be as high as Rose, Alpine and the access the Funi gives them, they have enough insurance but it depends how much the big check from the Whistler sale burns in their pockets.
 

fatbob

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I'd say it's not a bad fit for KSL other than real estate potential. You can still get the ski the day you fly in draw (not many people seem to realise it's less than 40 mins from RNO to 89 in good conditions on I80) and you get to sell a variety of passes with limited Squalpine days (or midweek only) and push some of your Reno crowd to Rose on the weekend.

But without real estate is it really where they would want to go?
 

ScotsSkier

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Actually (but not well known!) there is some real estate potential as there is outline planning for condos .... :)
 

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Actually (but not well known!) there is some real estate potential as there is outline planning for condos .... :)
Real Estate is the main reason anyone would be interested, there is no money is ski areas, it is ski resorts that are the draw.
 

skibob

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Real Estate is the main reason anyone would be interested, there is no money is ski areas, it is ski resorts that are the draw.
So @Philpug , does this mean there is NOT a sale in progress? Or that it failed to close? I had heard that there was a sale in progress and they hoped to announce the new owner before season open.

But the story quotes Mt Rose's Attorney as saying no offers have been received. Its an interesting read. Reading between the lines, I'd project the expectation at around $40-60 Million.

http://www.sierrasun.com/news/busin...newsletter&utm_campaign=monday-morning-report
 

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So @Philpug , does this mean there is NOT a sale in progress? Or that it failed to close? I had heard that there was a sale in progress and they hoped to announce the new owner before season open.

But the story quotes Mt Rose's Attorney as saying no offers have been received. Its an interesting read. Reading between the lines, I'd project the expectation at around $40-60 Million.

http://www.sierrasun.com/news/busin...newsletter&utm_campaign=monday-morning-report
Interesting story @skibob. I know for a fact that there have been multiple offers, it's just that they have all been way low out of price range. I don't think the whole crowdfunding idea would work out but you never know! I have to agree with @Philpug though, real estate is the only way rose will get sold for the wanted price. But, it is definitely still on the market.
 

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Still for sale but no offers under consideration at the moment. Moving forward as normal from an operating perspective
 

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Maybe it's not worth what they hoped it was. Maybe it is just that it is a buyers market. Maybe $25M is the number.
 

Muleski

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Interesting. I've only skied there four three days, but I really liked it. I know that there's a bit of a reality check going on in terms of ski area valuations....based on what a real buyer would pay. As Phil mentioned, even the best run ski areas are tough. Doesn't take much to derail a season, the capital needs are generally pretty significant, and the upside is not great.

A friend who's a N.E. bank CEO, who's done a lot of ski area financing, tells me that they are pretty cool on areas these days. Meanwhile, the private equity market is very interested in the best four season high end destination resorts. There was mention of KSL having money to burn on their pockets, after the W-B sale. Actually having recently closed out another fund, I think they have a war chest of about $3.5 Billion to deploy. Yikes.

How many skier days does Mt.Rose get in a season? Just curious.
 
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Tricia

Tricia

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Interesting. I've only skied there four three days, but I really liked it. I know that there's a bit of a reality check going on in terms of ski area valuations....based on what a real buyer would pay. As Phil mentioned, even the best run ski areas are tough. Doesn't take much to derail a season, the capital needs are generally pretty significant, and the upside is not great.

A friend who's a N.E. bank CEO, who's done a lot of ski area financing, tells me that they are pretty cool on areas these days. Meanwhile, the private equity market is very interested in the best four season high end destination resorts. There was mention of KSL having money to burn on their pockets, after the W-B sale. Actually having recently closed out another fund, I think they have a war chest of about $3.5 Billion to deploy. Yikes.

How many skier days does Mt.Rose get in a season? Just curious.
From season open to close Mt Rose has potential to have a longer season than most due to elevation and snow making capabilities, but they tend to close before the first of May even on a good year.
They tend to have a few more down days during the winter due to high winds, but that is usually followed by an amazing powder day.
 

Muleski

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Hi,
I meant the total number of paid skier visits/days in a season. Not how many days open or length of the season. Should have be clear on that. Just curious about the size of things. 200k skiers? More, less?
 

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Hi,
I meant the total number of paid skier visits/days in a season. Not how many days open or length of the season. Should have be clear on that. Just curious about the size of things. 200k skiers? More, less?
Not sure of the numbers but as resorts go, I am pretty confident their overhead is pretty low. The same family has owned it for decades so I am sure their fixed epenses are pretty good. If someone is to come in and buy it for say $30-40M, they have that huge not to crack in a mortgage. The only is to develop..again more costs. What will it be able to turn a profit? Not that they would but this is not the type of resort that Vail goes after, they buy turn key resorts, not ski areas. They are not into developing, they might fix up and modernize but they aren't into building condos and resorts. Anyone who is interested in doing that would need to be a developer and I am sure there are better ways to spend/invest money at that point. I also don't think it could be run profitably as just a ski area.
 

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Tricia

Tricia

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I thought there were "skier visit" totals in a story in the Reno Gazette Journal, but it looks like they only gave land stats.
http://www.rgj.com/story/life/outdo...-rose-owner-looking-sell-ski-resort/79247740/
The independently-owned Mt. Rose Ski Tahoe is officially up for sale.

Fritz Buser, majority owner of the Reno-area winter resort since 1971, “is looking to sell the resort,” according to a statement issued late Saturday afternoon.

“From a business perspective, the timing is right with the 2014-15 season proving highly successful despite enduring the leanest snow season in the history of the mountain,” the statement said. “In addition, the 2015-16 winter is currently on track to be one of the strongest in the last 10 years and prove exactly what the resort is capable of achieving in a typical or above average snow year.”

Marketing director Mike Pierce said staff was told earlier this week Buser intended to officially put the property up for sale.

Mt. Rose includes about 1,200 "skiable acres," with a mix of private property and land leased from the U.S. Forest Service. Also, some of the private property along Highway 431 is zoned for commercial use which could make it more valuable on the market.

Buser, 95, was traveling around the country in the 1950s and 1960s promoting Henke ski boots when he met the founders of Mt. Rose and became an investor in the operation, eventually becoming the majority shareholder in 1971, a stake he’s held ever since.

In the past 15 years operators of Mt. Rose have spent millions upgrading the property, including adding the Winters Creek Lodge, installing two high-speed, six-passenger lifts and expanding terrain to include the challenging Chutes runs.

The statement Saturday didn’t give a timeline for a sale beyond saying the process, “is expected to take some time,” and that day-to-day operations would continue as usual.

"The basics are that Fritz is a healthy 95 years young and is ready to hang up his skis and retire," the statement said.
 

Muleski

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200K skier days. I was curious, as it seems to be a key driver in evaluating what the potential is. I always hear that the keys are in get more people there, get them to spend more, and come back, with their friends. And then there is the question of expected ROI.

At Mt. Rose, I'm guessing many are on season passes? The question that every area in the country faces is how do you grow the revenue? More skiers, more lessons, more food and beverage? Any off season opportunities? Concerts, weddings, small conferences? Maybe rent hill space for training, when they have a good surface and others don't.

I'm assuming that it's been well managed and well run, without a lot of deferred maintenance staring a new owner in the face. No need for immediate lifts, etc.

So, I bet that most buyers back into a price, taking that into consideration, and looking at what they need for a return, as well as their source and cost of capital. And obviously the cost of that, the debt service is going to be entirely different for a new owner! Current owners bought it 45 years ago.

I would bet that there's a big gap between the relative asking price, and any serious buyers prices. The market tends to come back to the buyers, or so I've seen. But these times seen different.

The portfolio of properties that CNL has been trying to liquidate has many "areas" and few "resorts." Not a lot of appetite for the areas. There will be when the prices drop, to make it all hang together.

As we always say, tough business. Mt. Rose seems to have a lot going for it, though. Location, elevation, weather, and much more. Very different that what we often see with areas in that same relative size {skier days}, or a bit smaller.

Good luck. Hope it turns out well. I think the Mammoth play is an interesting one.
 

ScotsSkier

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Yes, a lot of the visits are season passes. However, the ski school delivers some of the highest numbers of lessons in the basin. The mountain gets very strong visitor and lesson traffic over the holiday periods. Has also been profitable even in recent poor seasons. Operates very efficiently, numbers and costs tracked daily as is essential. Has also continued to make investments in lifts, lodges etc and is debt-free for current owners. So, as a ski area, the returns and ROI are pretty impressive. It is NOT, and does not try to be, a "resort". The current owners are also very keen that a new owner has similar objectives in terms of the ethos of the mountain. However, as in any transaction of this type, that is not always totally down to the seller. And unlike a lot of areas, this is not a distress sale so while it is available, it still continues business as normal and gearing up for the new season.

And, a shameless plug, for those who would like to get some gate practice in, look at the Masters program offered, terrific value and a first class program. In fact ing terms of results in Far West Masters last year, Mt Rose Falcons Masters was the second most successful program behind Mammoth - which is ~ 5 X more expensive and has 3-4 X as many participants. And for younger athletes 5y/o to U19/FIS also a very strong range of programs, including Big Mountain/Freestyle as well as Race
 

Muleski

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Sounds great, which has been my impression. I would love to have a gem like this near me. The things like lessons, and the race programs all add up to the bottom line, and IMO, create loyal fans. The masters program success is just awesome.

I had assumed no debt. A bit part of the equation. And a big reason for no need for a fire sale. Seems to me that, long term, the elevation and length of season are huge pluses.

Thanks for sharing the info. Interesting.

A very different sale, or attempted sale, drags on across the country in Maine, at Saddleback. So many positives, so many challenges. Location is tough. Something like 8000 total acres. Current owners have invested $40 mil. Has great terrain. Needs some lift work. Have struggled to bump up against 100K visits. A real limit to the number of day skiers. Lists price well under $10 Mil. I have heard that potential buyers struggle with a plan even at a $5 Mil price. It's a totally different place.

Sounds like Mt. Rose should have a bright future, while a lot of people have their fingers crossed for Saddleback. If they fail to open this winter {which will be the second year in a row}, it might be a significant hurdle.

Tough business. And illustrative that ski areas cover a wide horizon in terms of value and opportunity.
 

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