Saddleback Mountain Sale

[peakbagger]

The congressional delegation all appear to be wanting to share the limelight, so I expect its probably the local investor deal sweetened with some sort of government assistance or assurances.

 

[Lost Dad]

Purchased by the Australian developer; with bold commitments for the future
http://www.pressherald.com/2017/06/28/australian-developer-buys-saddleback-ski-resort/

 

[peakbagger]

Well what the heck my guess was wrong. So we now have two "destined to be world class ski areas" about 65 miles apart (Balsams and Saddleback) with a third "world class resort", Jay Peak and Burke Mtn, for sale to the highest bidder by a federal government receiver. Great for the local businesses and suppliers in the short run but I still don't see how the fundamentals of lacking a good air travel connection and the distance from southern NH and Mass disappear. Then again a rising tide lifts all boats theory may apply so maybe this will give the area the critical mass to develop a national audience.

 

[injektilo]

http://bit.ly/2tXFm7T

Here's a little FAQ which was posted to Saddleback's Facebook page outlining some of the plans. Color me skeptical...

 

[peakbagger]

By the way, Sugarloaf (29 miles away) has attempted to become a world class 4 season resort at least twice. The conservation easement is interesting, the Fed already paid the prior owner of Saddleback a bundle (well above market rate) to protect the AT corridor. The fed had commissioned a development plan for the resort prior to that previous transaction so I guess its time to pull it off the shelf.

I expect the next shoe to drop is putting in the capability for foreign investments to get the special H1B investment status for economically disadvantaged areas.

 

[egilbe]

I wonder how this will connect with MHT plans for a hut in the region? Both organizations are promoting eco-tourism. It would seem to be complimentary.

 

[Mike P.]

To overcome the distance, you'll have to make the resort different than other resorts. The skiing is skiing, you can't change that too much. My experience hiking Saddleback is that it's one of my favorite summit areas, the hike up from Route 4 is a bit long but not difficult, that said, I've done it once. It's not easy to get to from Southern New England or from NY.

To make it work, IMO, they need to make it a premier week long destination or a destination where many people have 2nd homes and pay for access as part of a club or some type of association. The key probably has more to do with the 200 lots mentioned. What can you do to make me want to make that drive? Why is it different and better than your competition?

How to you make the population living in the populated areas make that drive? What kind of boating is allowed in the nearby lakes? Ziplines? An amusement park? (as a hiker, I'm cringing at some of these) Concert destination? Convention center, you usually need easier transportation for that. We'll wait and see.

 

[peakbagger]

Doesn't sound positive for Saddleback opening again any time soon.

https://www.pressherald.com/2018/03...edly-wont-lose-sleep-if-resort-doesnt-reopen/

When it was first announced he was buying it there was a lot of scrutiny on his background which seemed to be all hype and no substance.

This EB5 Scam is creating a lot of false hopes for struggling resorts in the region. Jay Peak and Burke is now managed by a bankruptcy receiver due to an EB5 scam, The Balsams now is talking EB5 as a key part of the investment strategy and now Saddleback. Not just ski areas, a certain high profile former real estate developer and his family have also abused the system.

 

[peakbagger]

The owner of Saddleback responds

https://bangordailynews.com/2018/03...hat-he-just-wants-resort-for-immigrant-visas/

 

[peakbagger]

Most likely the end of this potential owner

https://www.pressherald.com/2018/06...-to-buy-saddleback-resort-charged-with-fraud/

Back to the local option

https://bangordailynews.com/2018/06...w-talks-for-saddleback-reboot-nonprofit-says/

 

[peakbagger]

Update on current negotiations

https://www.pressherald.com/2019/07...m-still-actively-pursuing-sale-of-saddleback/

Despite the claim that the two events are separate, no doubt there is some tie. My pure speculation is the current owner is looking at a significant loss and therefore has to decide if they want to sit on it longer and hope for a better offer or take the write off on this one.

 

[NHClimber]

Agreed. Too coincidental given that negotiations had stalled because the resort was not eligible for a federal Opportunity Zone tax credit.

 

[peakbagger]

Looks like the Berry's finally decided to sell to the Boston firm. In the past they wanted to pay less then the Berry's were willing to sell for.

https://wgme.com/news/local/report-saddleback-ski-resort-to-re-open-this-winter

The headline title in the address is misleading. The article is about the sale not when it will reopen. The main chairlift is reportedly in need of replacement. Given the time of year, I suspect that full operation is at least one year out. The business plan has not worked for many years and a past third party evaluation indicated that the only plan that worked was a massive investment in the region to make it destination resort. The big question is what will the new owner do that hasn't been tried in the past?

 

[Hillwalker]

I warmly remember the old "Bronco Buster Competition" days. Used to love skiing there before lift lines existed. Hope it finally reopens some day.

 

[Vermonster]

Saddleback and Rangeley just can't seem to catch a break.
https://www.newenglandskiindustry.com/viewstory.php?storyid=805

REPORT: Saddleback Buyers Still Millions of Dollars Short
Donations are being sought for a pre-Christmas transaction deadline.
Sunday, December 8, 2019, NewEnglandSkiIndustry.com
While the Saddleback sale agreement continues to move forward, WGME reports the group buying the defunct resort is facing a $2 million shortfall with just over a week to go before a major deadline.

The non-profit Saddleback Mountain Foundation is collecting donations to help close the gap. In addition to the pre-Christmas target, another $2 million is reportedly needed by the end of January. Appeals are reportedly being made to area condo owners to contribute funds to prevent the deal from falling through.

 

[peakbagger]

This is quite an interesting turn of events. Given that there are significant capital and maintenance investments that will need to be made, plus up front money to get the place restarted, it is a bit disturbing that they are going out to the public to get potentially two rounds of donations especially with such a limited time window. If they were a non profit coop that would be one story although I expect the Mad River Glen $2000 membership and $200 minimum yearly commitment would not cover the purchase. It sure looks like a desperation pitch. My question would be does it make sense to transfer it to another financially shaky buyer hoping that it might reopen rather than let the current owners keep it on the market and possible drop the price to the point where another entity can buy it and run it at profit?. Arctaris has signed a deal with Finance Authority of Maine for Opportunity zone projects so they stand to make a buck if they can pull it off. I don't see an offer being made to those who donate to participate in any future profits.

One of the observations I have seen with respect to another struggling Maine ski resort, Mt Abrams, was that one of the recent owners was quoted when he bought it at auction that sometimes a ski resort has to go through a couple of bankruptcies to get the price down to the point where it can run profitably. It would be interesting to see the recent prices of the ski resorts sold over in NH and see if it was the prior purchase by American Skiing Corporation and subsequent bankruptcy by ASC dropped the price of these resorts so that the recent owners could make a buck? The Berry's stepped in and "saved" the resort after the prior owner got a controversial large one time cash out from the federal government by successfully greenmailing the AT corridor which allowed him to drop the price considerably. Prior to the greenmail, a third party study by ski area "experts" funded by the fed and ATC concluded that the resort would not be viable with the exception of massive development of a destination resort. This didn't happen then and the closure was result of the current owners not generating enough profit to able to cover expenses.

 

[srhigham]

It's unclear to me and not defined in the article or this thread what this non profit's role is and how it fits between the seller and the presumptive buyer.

 

[peakbagger]

A bit more info but doesn't clarify the tie between the developer and the foundation

https://wgme.com/news/local/saddleback-buyers-seek-2-million-before-sale-deadline

Frequently a developer is just a "cheerleader" getting other folks to invest money in project. If they pull it off they get portion of the profits. They are effectively putting in their "sweat equity" in lieu of an investment. Generally the investors and banks wants the developer to have "skin in the game" so that if the project fails, the developer has in theory lost actual money which in theory motivates them to make sure it succeeds. In reality usually it takes quite awhile for things to go bad and the developer has long since cashed out but that is the concept. They cant borrow the money for the "skin" but in many cases they figure out a way of using someone else's money in lieu of their own "skin". Pure speculation on my part is the requested donations are way of funding the "skin"?.

Over the last few years the Saddleback Mountain Foundation has been pretty open that their goal is reopen the mountain. Their supporters are reportedly condo and recreational housing owners who have substantially lowered property values with the resort closed, local businesses who have lost a big part of the winter business, real estate agents and possibly local workers. I would expect someone would be hard pressed to sell a slopeside condo located 4 miles in on what I think is a private road next to a defunct ski area. If the donation had any stings attached like free lift tickets then it might be treated as a backdoor loan.

Here is link to local Saddleback listings. https://www.morton-furbish.com/saddleback-lake-listings/

That is what realtors are asking, I expect actual transaction prices are going to tell a different story.

 

[skiguy]

A bit more info but doesn't clarify the tie between the developer and the foundation

https://wgme.com/news/local/saddleback-buyers-seek-2-million-before-sale-deadline

Frequently a developer is just a "cheerleader" getting other folks to invest money in project. If they pull it off they get portion of the profits. They are effectively putting in their "sweat equity" in lieu of an investment. Generally the investors and banks wants the developer to have "skin in the game" so that if the project fails, the developer has in theory lost actual money which in theory motivates them to make sure it succeeds. In reality usually it takes quite awhile for things to go bad and the developer has long since cashed out but that is the concept. They cant borrow the money for the "skin" but in many cases they figure out a way of using someone else's money in lieu of their own "skin". Pure speculation on my part is the requested donations are way of funding the "skin"?.

Over the last few years the Saddleback Mountain Foundation has been pretty open that their goal is reopen the mountain. Their supporters are reportedly condo and recreational housing owners who have substantially lowered property values with the resort closed, local businesses who have lost a big part of the winter business, real estate agents and possibly local workers. I would expect someone would be hard pressed to sell a slopeside condo located 4 miles in on what I think is a private road next to a defunct ski area. If the donation had any stings attached like free lift tickets then it might be treated as a backdoor loan.

Here is link to local Saddleback listings. https://www.morton-furbish.com/saddleback-lake-listings/

That is what realtors are asking, I expect actual transaction prices are going to tell a different story.

This is interesting info. Do you have any insight on how this is set up to be a non-profit? I know non-profits come in many flavors but this must be an interesting arrangement.

 

[peakbagger]

Not sure what you mean by the non profit reference, Arcteris is not a non profit. As for Saddleback Mountain Foundation they are a 501 c so they can take donations. Did you perhaps intend to clip the prior post from srhigham? He did mention non profit

Here is a link to some info on the Saddleback Mountain Foundation makeup https://www.charitynavigator.org/index.cfm?bay=search.profile&ein=820691811

A 501C can take tax deductible donations. Not sure how the details work out on getting the money into the transaction. My guess is the Berry's do not care where the money comes from so there must be some way for it to end up in their pockets. As for how Arcteris leverages the donations I really dont know. I expect that if it happens the closing will be lot of lawyers in room handing lots of documents around the table with everyone dependent on every other one.

Given their 2018 listed assets it does not look like SMF are flush with cash. The listed address is a residential home in Portland so my guess is its a condo or ski house owner hoping for a reopening. I was surprised it isnt a Rangeley address.