Saturday, September 28, 2002
Steamboat Springs On March 26, American Skiing Co. pulled the plug on its deal to sell the Steamboat Ski Area to a group of investors led by Tim and Diane Mueller. Things haven't improved much for Steamboat Ski and Resort Corp. in the six months since.
When ASC decided to sell Heavenly Ski Resort in California for $102 million instead of taking $91 million for Steamboat, the reasoning was the Heavenly deal was better for ASC's efforts to restructure its debt. ASC officials said selling Heavenly would free up cash to direct toward ASC's other resorts, including Steamboat.
But while ASC did put forth a plan to spend $2 million on capital improvements most of it for snowmaking and paint, carpet and furniture at ski area facilities Steamboat doesn't seem to be in any better financial shape now than when the Mueller deal fell apart.
Earlier this month, ASC's Steamboat Grand Resort Hotel let a deadline slip to contribute $300,000 toward much-needed improvements to Mount Werner Circle. This was after the hotel complained that its initial agreement to pay $600,000 for the improvements was too high and the city reduced the amount.
The hotel's attorney said lenders and in-house council had approved the agreement for Mount Werner Circle, but a refinancing plan for the hotel needed to be finalized before the company could move forward. It isn't clear when or if the improvements including new sidewalks, turning lanes and remodeling the Gondola Transit Center will occur.
On Friday, the news got worse for ASC and the ski area. Fleet National Bank filed documents at the Routt County Treasurer's Office seeking to foreclose on the 44-acre Tennis Meadows Complex because ASC Resort Properties has defaulted on $81.9 million Fleet loaned it in July 2001.
ASC officials said they are confident the issue will be resolved in the coming weeks. "It was not a surprise," said Mark Miller, ASC's chief financial officer. "We're still in negotiations with Fleet Bank, but while we are negotiating, they are continuing a parallel course with their legal remedies under the agreement. We're optimistic about the outcome."
But given ASC's recent performance, it's hard to share Miller's optimism.
At the Mountain Resort Planning and Development Conference last week in Steamboat, Vail landscape architect and consultant Sherry Dorward said what is already painfully clear to the community the base of Steamboat's ski area is the worst in the state. The layout is complicated, it isn't pedestrian friendly, the design is dated and lacks landscaping and parking is a problem.
ASC doesn't have the money needed to help with Mount Werner Circle improvements, much less address the base area. Ironically, there was a plan not too long ago to create a new base area with hotels, shopping and a gondola at the Tennis Meadows. Now, ASC may not even own that property much longer.
The way things are going, that may not be a bad thing.