Steamboat Springs The Steamboat Ski Area is poised to leave its days as a publicly held company behind in March with the announcement Friday that a group of investors led by Tim and Diane Mueller have made a deal to purchase the ski area for $91.4 million from American Skiing Company.
The Muellers, owners of Okemo Mountain in Vermont and operators of Mount Sunapee, N.H., are the lead investors in a consortium that includes eight local couples or individuals. They are part of Triple Peaks, LLC, which reflects the Muellers ownership of Okemo Mountain Resort and operation of Mount Sunapee Resort in New Hampshire.
Tim Mueller said he's aware he is bucking the destination ski industry trend toward consolidation of resorts into large publicly traded companies. But he sees advantages to privately held companies.
"We're not so driven by quarterly (earnings) reports," Mueller said. "We can move quickly and act more directly. Our employees feel like they are a bigger part of it. We will not build up a corporate bureaucracy."
The Muellers gained a reputation for their ability turn to around the fortunes of Okemo and Sunapee; Okemo logged more than 590,000 skier visits last winter.
But the Muellers say their task at Steamboat is very different.
"Obviously, Steamboat is a resort that has done one million skier days for the last 10 or 11 years. It's not as if there's going to be a turnaround," Tim Mueller said. "We want to tweak a few things here and there to re-energize the staff. In terms of the best ski areas in the country, we want Steamboat to be right there."
Diane Mueller said the stature of Steamboat in the ski industry dictates the Muellers' approach here will be different.
"Okemo had a lot of issues," when the Muellers acquired a majority interest in the ski area 19 years ago, she said. "We spent the first few years converting Poma lifts to chairlifts. In Steamboat, we want to help employees focus on what it is we all agree on, and look at how do we all get on the same page."
Initially she said, she and her husband would lead the charge then get out of the way so managers can manage their departments.
Tim Mueller said he and his investors valued the Steamboat purchase based on its resort operations, and not on the potential for real estate development. Unlike many ski areas, which believe their challenge is developing more bed base, he said Steamboat appears to have ample resort bed base.
Mueller said having the Steamboat Grand at the base of the ski area is a big plus.
"The hotel is a nice asset for this ski area to have," he said. "It has 1,100 pillows in brand new units. We don't have to own it."
He said while Triple Peaks acquired undeveloped land with the purchase, there is no immediate development plan.
"We looked at this almost, not totally, but almost entirely on a cash flow basis," Mueller said.
The investors believe they can bring consistent growth to skier days, but Mueller said they are not counting on dramatic growth.
"We're not planning to grow to 1.7 million skier days or even 1.5 million skier days. Our plans don't call for it to grow that much."
The Muellers are aware that Steamboat faces ongoing challenges with funding the ski season jet program, and over the long term, redeveloping the base of the ski area.
"I think it needs a new identity," Diane Mueller said of the gondola building and the surrounding area.
But the Muellers say they aren't arriving with preconceived notions on what the solutions to those challenges are.
Tim Mueller said researching a master plan that would satisfy the many property owners in the resort village is a project that could take 5 to 10 years.
On the airline front, he said he views the change in ownership as a chance to get a fresh start on the issue.
"The airline program is the lifeblood of the community in winter," Mueller said. "Obviously the ski area is the driving force, and we'll be willing to continue to pay more than our fair share.
"Somehow we've got to work together to make it happen and we need the community's support. We're not going to come in with a hammer and try to make that happen."
Mueller said his investment group's capital structure takes a conservative approach as far as the ratio of equity to debt. And they have built in the availability of $10 million in capital which can be invested in Steamboat during the first two years of new ownership.
Mueller said he doesn't want to be specific about what capital projects might be undertaken in the near term, but he's aware that replacing the Sunshine chairlift and sprucing up on-mountain lodges at Thunderhead and Rendezvous Saddle seem to be at the top of everyone's lists.
When the Muellers (they pronounce their name Muller, not Mewler) purchased Okemo Mountain ski area in Vermont in the early 1980s, it was a struggling resort that counted just 95,000 skier days annually. Gradually, they built it up until it hosted more than 590,000 skier visits last winter (Steamboat logged more than 1 million). Okemo has accomplished that growth even though it is just down the highway from giant Killington.
Nick Schoewe of Steamboat Springs is among the investors in Steamboat and Triple Peaks. He did not know the Muellers until they became partners in Catamount. They were introduced to one another by a mutual acquaintance and another Vermont man, Lyman Orton. They formed a business alliance and became partners in Catamount Ranch and Club here.
Schoewe has witnessed Tim Mueller in action at Okemo and approves of what he has seen.
"Tim isn't pretentious at all," Schoewe said. "At the same time, he's a very astute businessman. He's very good at knowing what his market is and what his customers want."
Mueller began his business life with a degree in American studies, and a contracting firm that built roads and homes in Vermont. He and his wife are not native Vermonters; Diane grew up on Long Island, and Tim's family move from Cincinnati to Denver, then Long Island during his high school years.
Tim moved to the Virgin Islands from Vermont to help his future father-in-law build condominiums, and that project eventually grew into a resort.
He returned to Vermont and acquired Okemo when it was struggling. He says he was not wealthy at the time.
"We begged, borrowed and leveraged everything we had when we came back to Vermont," Mueller said. "And we've put everything we made back into Okemo."
Any wealth the couple has acquired, Tim says, has come about since they bought the ski area.
Diane Mueller is known at Okemo and in Ludlow for her willingness to roll up her sleeves and pitch in, even if it means working in the cafeteria line. She ran the sign-building department at one time, and was involved closely in employee training. Diane served on the school board in Chester, where the Muellers live, for many years, and currently is vice chair of the Vermont board of education.
The Vermont Chamber of Commerce named her "Vermont Citizen of the Year" in 2001.
Some people in the Ludlow area are unhappy with the additional growth being represented by a new expansion of Okemo's village called Jackson Gore. It will add 450 homes, a base village, 16 new trails, 55 acres of glades and five lifts to the resort.
The project has undergone extensive review by the Vermont Environmental Board, which is scrutinizing the project down to the number of trees that can be removed for trail construction.
More fractious have been discussions about zoning changes on the local Planning Board. Jackson Gore has been in the planning stages for more than three years, and at times both Okemo detractors and Okemo employees have served on the board.
The Muellers said this week they are comfortable working in small towns where growth issues are contentious.
"The conundrum for the town (Steamboat) is matching the success of the ski area with growth concerns. The question should be, 'how do you manage growth?'"
Diane Mueller said her approach to improving the performance of her ski areas doesn't depend upon growth.
"Quality has always been our first priority, and the rest falls into place," Diane said. "It doesn't necessarily mean you have to be a lot bigger."
The Muellers' son, Ethan, supervises the snowboard parks and halfpipe at Okemo, and enjoys skiing on twin tail skis as well as riding. Their daughter, Erica, is a competitive snowboarder.
They say they hope to be accessible to Steamboat employees and members of the community as they travel back and forth between Vermont and Colorado.