Tom Ross: News of Intrawest’s IPO plans, and Crested Butte’s suitor closely timed
November 22, 2013
Steamboat Springs — It would be the ultimate irony if Intrawest, owner of the Steamboat Ski & Resort Corp., turned out to be the entity interested in acquiring the management contract for Crested Butte Mountain Resort ski area. But you didn't hear that rumor from me.
More than a decade ago, Tim and Diane Mueller of Triple Peaks LLC, the current operator of Crested Butte, believed they were within minutes of closing on the purchase of Steamboat Ski Area from a previous owner, American Skiing Company.
Tim Mueller was literally sitting in an attorney's office in Manhattan waiting to sign a draft of closing documents when the Magic Carpet was pulled out from under him. A board member and an attorney for American Skiing, which no longer exists, phoned in to say "never mind," they were calling off the deal.
After settling a resulting lawsuit for millions, Triple Peaks moved on to Crested Butte. And Steamboat was eventually sold to Intrawest. But this month, even though it may be coincidental, Triple Peaks and Intrawest are in the news, with the former mulling an offer to purchase, and the latter contemplating an IPO to raise money for acquisitions.
Just days after the news surfaced last week that Intrawest had filed notice of its intent to take the company public with a stock offering, both the Denver Post and the Crested Butte News have reported that a group of investors has approached Triple Peaks LLC, which manages CBMR.
The ski area in the town of Mount Crested Butte is owned by a real estate investment trust, CNL Lifestyle Properties, which has an arrangement with Triple Peaks to manage the ski area. The two companies have a similar arrangement at Okemo Mountain Resort in Vermont.
Mark Reaman reported for the Crested Butte News on Nov. 20 that the signing of a formal sales contract between Triple Peaks and an unknown suitor is possible before the end of the month.
Now, there's a buzz in the town of Mount Crested Butte and the nearby historic mining town of Crested Butte, that it's Intrawest that is interested in Crested Butte Mountain Resort.
However, Reaman went on to pen the prophetic phrase: "As with any business dealing, nothing is done until it is done."
You don't have to tell that to the Muellers and their son, Ethan, who is the vice president and general manager at CBMR.
In early 2002, Triple Peaks and the Muellers, who had become well-known in Steamboat, entered into an agreement to purchase Steamboat Ski Area from a previous owner, American Skiing Company, for $91.4 million. It never came to pass.
A lengthy courtship had played out before the contract was signed on Jan. 24, 2002, and it wasn't until after a series of postponements that Tim Mueller found himself sitting at the closing table in the conference room of a New York high rise on March 26, 2002. That's when he got the phone call from the general counsel of American Skiing informing him that they no longer intended to sell Steamboat and planned instead to sell Heavenly Ski Resort in California for $102 million.
Talk about being jilted at the altar.
Triple Peaks, which included other investors from the Steamboat area sued American Skiing (subsequently dissolved in September 2007) seeking to force it to close on the sale. Although Tim Mueller insisted it was his goal to acquire Steamboat, Triple Peaks ultimately settled for $5.14 million.
And American Skiing sold Steamboat (the deal included real estate and other parting gifts) to Intrawest for $265 million.
So, what do you think? Is Intrawest intent on picking up another destination resort that is dependent on airline contracts to deliver affluent skiers to its slopes? My sense is that the timing of the news of Intrawest's IPO filing and the news of Crested Butte's anonymous suitor quite naturally spawned a rumor.
One could postulate that it would be unorthodox for Intrawest to close on a new ski area management contract this month, before it even goes to the markets to raise cash. Or, you could speculate that such a contract, and the synergies it might create, would boost Intrawest's stock price when the time comes (if it comes at all).
Crested Butte is a lot like Steamboat in that it has a great airport about 35 miles south in the college town of Gunnison. And the setting is spectacular.
Among Crested Butte's liabilities is the scarcity of intermediate trails on its ski mountain.
While Steamboat is a paradise for people who thrive on blue runs, Crested Butte only has a handful of intermediate trails mixed in with some appealing beginner runs and a ton of steeps.
The U.S. Forest Service denied, in 2009, Crested Butte's plans to expand onto nearby Snodgrass Mountain, where the resort could have built intermediate trails on what has been a sacred locals' side-country powder stash on the edge of town.
In January, CBMR submitted a new plan to expand into Teo Bowl with a new fixed-grip Teo Park triple chairlift that would access more than a dozen new trails, including significant intermediate terrain as well as some expert bowl skiing.
The expansion plan envisions 19 new trails in total.
I guess if the rumors circulating in Crested Butte are true, Steamboat residents could look forward to someday purchasing the new Gnarly Pass, entitling them to ski some of that steep, rocky terrain in CB.
And you have to admit, "Butte(y) and the Boat" has a nice ring to it, doesn't it?
Just don't look for direct jet flights between Hayden and Gunnison any time soon.