Looking Back: The year in Business

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— Air service was a recurring theme in Yampa Valley's business culture throughout 2003, as it has been for more than a decade.

It was a year that began with a bit of a hangover, as so many do, from the ongoing story of United Airlines' efforts to reorganize under the protection of bankruptcy.

The ski season load factors on jets arriving at Yampa Valley Regional Airport started out like a Warren Miller film in January but took a disappointing tumble in March. Then, before 2003 was over, the promise of a summer jet flight evaporated only to be reconstituted in December. It was a year that saw the addition of service on Delta airlines for the first time.

When the clock ticks past midnight Dec. 31, Delta's first performance reports for a daily flight from Salt Lake City and a Saturday flight from Atlanta will be due. At the same time, resort officials will be getting ready to sign a contract ensuring summer service from Houston on a 50-passenger regional jet.

United Airlines and its commuter partner, Air Wisconsin, led the way at YVRA in January, carrying more passengers than any other airline. After a strong December 2002, January's arriving passengers grew by more than 1,200, to 21,950. As the nation's economic woes deepened, advance reservations for ski vacations for March softened.

March arrivals at YVRA were off by 1,800 passengers, to 25,619.

Lincoln changed forever

February brought the news that a landmark Lincoln Avenue business, Boggs Hardware, would shutter its doors for good. Boggs harkened to a day when farm implements were sold on Steamboat's main street. Its utility persisted into the 21st century; people valued the ability to run down the street to Boggs for emergency plumbing supplies.

It also was in the second month of 2003 that news came out that the founders of one of Steamboat's homegrown business success stories had sold their interest in their company. A top executive of SmartWool promised the company would remain here.

Philadelphia-based RAF Industries, which purchased a majority interest in the outdoor-wear maker, acquired the remaining minority interest of Peter and Patty Duke in late January. The news was withheld until principles' travel schedules quieted down.

SmartWool is best known for hiking, skiing and running socks made in the United States from Merino wool imported from New Zealand. The company's headquarters is based in the former Steamboat Springs Airport terminal. Manufacturing is done in mills in the southeastern United States. The company has aggressively expanded its line during the past two years. The 2003 catalog for dealers includes wool turtlenecks, sweaters, vests, jackets, gloves and more.

RAF acquired a majority interest in the company in 1995. The privately held RAF operates as a holding company, which invests in existing companies and lends management expertise. Its portfolio includes a range of companies, with an emphasis on gift items and industrial products. Some of the companies are in the Philadelphia area, but their locations range from Texas to Minnesota.

Denver snow hits home

Heavy snowstorms have been known to close Rabbit Ears Pass and make it difficult to drive between Yampa Valley and Denver. However, in March, it was a storm on Colorado's Front Range that cut Steamboat off from many of the truck shipments businesses depend upon.

The UPS distribution center received a single truck March 17 and one truck March 18, then nothing until March 21.

A variety of over-the-road shippers also were affected.

An auto dealer couldn't get parts for Subarus because the roof of the supplier's Denver warehouse collapsed under the snow, and a fast food restaurant ran out of french fries. There were many such stories.

Stopping the 'leakage'

In June, when the results of the Routt County Consumer Preference Survey were released, retailers received the news that Yampa Valley households spend almost half of their shopping dollars elsewhere.

The report was prepared by Scott Ford of the Steamboat Springs Economic Development Council and Colorado Mountain College with Deb Alpe, a sociologist with the Colorado State University Extension Service.

"We know we are a leaking bucket but we had no idea how much and where," Ford told a gathering of more than 160 community leaders. "Almost all of our consumer groups have leakage of 50 percent or better."

The exceptions to the roughly 50-percent leakage are the banking, food and beverage, auto repair, and medical industries.

Or as Ford put it, "when we fix our cars, our dogs or ourselves, we tend to spend most of our money at home."

The report evaluated the spending habits of residents in various income brackets and in various segments of the local economy. The intent was to provide baseline data about the amount of money "leaking" from the economy so businesses can formulate strategies to plug those leaks.

Timeshares liquidated

The 56-suite Leisure Resorts Hilltop on Highpoint Drive and 60-suite Leisure Resorts Steamboat Springs Suites on Pine Grove Road were identified as likely sale targets in July when their parent company, Las Vegas-based Leisure Resorts Industries/Mego Financial Corp., filed for bankruptcy and set out upon a liquidation strategy.

The resorts remained in full operation with the exception of their sales offices, and by November, the two properties had been sold to Celebrity Resorts of Orlando, Fla.

In addition to the Steamboat timeshare properties, Celebrity Resorts acquired developments in Honolulu; Reno, Nev.; Brigantine Beach, N.J.; and Indian Shores, Fla., from Leisure Resorts Industries.

Foreclosures were a key element in Leisure Industries' decision to declare bankruptcy.

Documents filed with the Securities and Exchange Commission by Mego Financial Corp., parent of Leisure Industries, reflect that lagging sales across its numerous subsidiaries, as well as the number of customers abandoning their timeshare vacation contracts had sapped Leisure Industries' ability to operate.

Leisure Industries arranged financing for many of its timeshare purchasers and used its consumer contracts to underwrite lines of credit that were its source of operating funds.

Ski area plans upgrades

The Steamboat Ski and Resort Corp. reported in August that together with partners in Gondola Square, it had begun planning for a long-anticipated face-lift for the buildings at the base of the ski area, including the gondola building.

"Gondola Square was built in the late '70s and early '80s" Ski Corp. President Chris Diamond said. "It's been stucco and beige ever since. Our strategy is to look at the buildings and create individual groupings through the use of color and materials."

Diamond announced the tentative plans for the ski area base in the context of $1.8 million in capital improvements the ski area intends to undertake in 2003/

2004.

In addition to making preparations to modernize base area buildings, the ski area planned to upgrade the interior of on-mountain restaurants at Rendezvous Saddle.

Diamond acknowledged the initiation of planning for improvements at Gondola Square and the gondola building does not imply the decision has been made to proceed with the work. American Skiing Co., parent of the Ski Corp., sold about 40 percent of the commercial buildings in the square within the past five years. The other owners are active participants in the planning and funding for the work, Diamond said.

"We don't have the resources to do the whole thing," Diamond said. "But we want to create a thoughtful plan so we can do the work as we have the capability."

The Ski Corp. has association agreements in place that enable it to make assessments on the other owners for the improvements. However, Diamond said the Ski Corp. has no intention of proceeding in that way. Instead, it will seek consensus.

Plans do not call for any new buildings at the base of the ski area, however, nine existing buildings would get new treatments. Tentative plans call for timber and stone on building exteriors.

"It will be a much more modern feeling when it's complete," Diamond said.

Tennis Meadows' new game

Whitney Ward of Resort Ventures Inc. reached a deal in October to purchase 52 acres representing the bulk of the remaining development land near the base of the ski area.

Ward said he intends to purchase the land from the real estate division of American Skiing Co. and was working to close the complex deal as the year drew to a close.

Terms of the sale were not been disclosed. Tennis Meadows is adjacent to, but does not include, the Steamboat Ski Area's remote parking lot. Also included in the deal is a half-acre parcel in Central Park Plaza.

Ward told Steamboat Today he does not envision major commercial development on the Tennis Meadows site. Instead, he anticipates that mixed-density residential projects will be built on the land.

Ward has begun construction on a new commercial center adjacent to Tennis Meadows. Known as Wildhorse Marketplace, it also is being developed on land purchased from the ski area's parent company.

Ward, who was a founding partner of Invesco Realty, said he sees significant potential for development in the Steamboat Springs area.

"Steamboat is one of the few ski areas in the United States that is known internationally. It is one of the best values left in Colorado and it has special qualities that need to be preserved."

Ward left Invesco in January 2000 to start his own business, but saidthe business relationships he formed there allow him access to the funds he needs to complete developments.

Ward said he did have specific development projects in mind when he acquire the undeveloped parcels from American Skiing Resort Properties Inc. Nor has he formed partnerships with third parties that already have projects in mind.

"That would be a backwards process," Ward said. He added his approach to developing the land would be to work with the community to achieve what it wants.

The 4.2-acre Snowflower II lot occupies what is now refereed to as the gondola parking lot and some surrounding land. It sits in a portion of a triangle formed by Mount Werner Circle and AprÃs Ski Way. Ward said he envisions a high-density resort project on the site and believes that is consistent with the city's vision for the parcel.

Former ASC executive Les Otten at one time envisioned a people-mover gondola linking Tennis Meadows with the base of the ski area. Ward did not rule that out in October.

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