AP Article on Snowboard Bans

For skiiers only
Sunday, February 26, 2006
By DOUG ALDEN Associated Press

PARK CITY, Utah – A handful of winter playgrounds maintain that snow is for skiing — period.

While the ski industry has welcomed the evolution of snowboarding and the business boom it has brought over the last two decades, four U.S. resorts are sticking to a policy of “skiers only.”

“When it comes right down to it, it’s our guests who have the largest say in the determination,” said Chuck English, director of mountain operations at Utah’s Deer Valley.

Deer Valley is one of the four remaining U.S. resorts where trails sculpted from the mountains are reserved for skiers. Alta, southeast of Salt Lake City, New Mexico’s Taos and Mad River Glen in Vermont are the others willing to turn away potential business because enough skiers seem to like it that way.

“The current situation finds us receiving so many positive letters and comments from guests because we don’t allow snowboarding,” English said. “That’s really why we continue with our policy the way it is.”

The policy: If you want to snowboard, go somewhere else. It’s exclusive and not at all apologetic. And as long as there is a market of skiers who support it, change is unlikely.

“There were a lot more,” Mad River Glen spokesman Eric Friedman said. “Now you’re left with the four holdouts.”

Snowboarding accounted for 28.7 percent of national lift ticket sales last season, said Michael Berry, president of the National Ski Areas Association in Lakewood, Colo.

Each resort has its own reasons for being exclusively for skiers. Deer Valley has been skiers-only since opening above downtown Park City in 1981. And with Park City Mountain Resort and The Canyons welcoming snowboarders just down the road, Deer Valley plans to keep its posh slopes to skiers, who are willing to pay the hefty lift ticket costs in exchange for things such as ski porters and tissue dispensers at the lift.

Taos, in the Sangre de Cristo Mountains of northern New Mexico, is celebrating its 50th anniversary — and is sticking to its “pure skiing” mantra.

“We see it as something that differentiates us from other ski areas,” general manager Gordon Briner said.

At Alta, the decision to keep snowboards off the lifts in the early 1980s went largely unnoticed because the sport was still relatively new and there were very few people trying it, marketing director Connie Marshall said.

It has since developed into sort of a trademark for the resort, which has been around since 1938.

“We’ve been rewarded by our longtime skiers,” Marshall said. “We feel like it does give us an identity in the market.”

Mad River Glen’s policy came more from spite. Snowboarders were allowed on the mountain, but couldn’t use the classic single-chair lift, the only one that goes to the top of the mountain in central Vermont.

Friedman said the policy was broadened to keeping snowboarders out of the area altogether after former owner Betsy Pratt was confronted in a grocery store by a group of teens who wanted snowboarders to be able to ride the single-chair lift.

Friedman said the teens were hostile and called Pratt a name they shouldn’t have.

“That was the end of snowboarding at Mad River Glen,” Friedman said.

The policy stuck when the resort went co-op in 1995 and shareholders haven’t come close to overturning it — even in Vermont, home of Burton snowboards.

The rift between skiers and snowboarders has subsided as snowboarding has grown in popularity and gained more acceptance. But the stereotype that snowboarders tend to be younger and more reckless still lingers — even though teenagers who took up the sport in the 1990s are now well into their 30s.

There are still, and probably always will be, skiers who prefer to have the mountain to themselves.

Kelly Dudek, a 32-year-old hair stylist from Las Vegas, was loading up her skis at Deer Valley one December afternoon and noted to a friend that they hadn’t seen any snowboarders.

“Not that I don’t like them. I have many friends that snowboard, but it’s just different. A little more relaxing,” Dudek said. “If I was a snowboarder, I’d probably think differently.”

Burton to Purchase Mad River?

Granted this is second hand information, but the source has been very reliable in the past. Jake Burton, at a private party, talked openly that he and a special project team are seriously considering announcing a takeover bid for the Mad River Glenn Mad River Glen Ski Area (the Glen is one of the few ski areas in the USA that does not allow snowboarding).

Not sure if he has made a formal offer or if he has just approached some members of the MRG Board of Trustees about the prospect of buying the ski area from it’s shareholders. Given that the Board has a “fiduciary responsibility” to maximize the returns to shareholders, the mountain’s board could be seriously considering his offer or face a shareholder lawsuit for breach of duties. Team members had accumulated shares subsequent to the initial offering and have been attending most of the MRG board meetings. Mad River’s shareholders meeting is on April 1st.

The Glen has projected that the poor winter of this year will result in a loss of over $300k. This loss coupled with increasing insurance and tax expenses will wipe out the ski area’s reserves which had expected to be sufficient to cover a bad winter. In addition, the exorbitant cost of replacing the single lift (recent increases in raw materials, increased energy prices impacting shipping costs, a one-of a kind custom-built lift and delays in the project) has allegedly ballooned to over $2 million.

Currently, Mad River has a financing commitment for less than half of the project costs from Northfield Savings Bank. The mountain has been unable to come up with a concrete plan for the balance and the project has been delayed while the mountain comes up with options. Financing costs for just the NSB portion (45% of the rebuild) are projected to be in the $100k/year range for the next twenty years. Not sure if NSB knows that the reserves will be wiped out this year and what that will mean for their commitment.

The State of Vermont lift department has been pressuring Mad River to replace the 57 year old lift (oldest in the state by far) due to safety concerns. Without a concrete lift replacement plan, and with the mountain voting a delay in the project, the state guys think that Mad River is stalling for time. There is a chance that the lift may not be relicensed for the coming year. Mad River with just the double chairlifts that they have may not be economically viable. With none of the restrictions of current ownership, Burton’s team could install a cheaper double chairlift or any other lift to replace the single chairlift. That would drop the construction costs considerably as used double chairlifts are readily available and could probably be installed this summer, using the current engineering plan.

The Mad River Board has received and is considering a shareholder proposal to create a one-time assessment for the single financing. With a unfunded “hole” of $1.1 million, and no reserves, the mountain has discussed an assessment of $550 per share (for all shares authorized, even the preservation shares). Of course, not all issued shares are outstanding, therefore the per-share-outstanding assessment will be higher.

The board has submitted a proposal to shareholders to increase shares authorized to reduce this per share assessment. Whether the mountain can sell the additional shares is unknown, due to a number of shares which have been tendered for repurchase by disenchanted Glen shareholders.

The mountain was originally purchased for over $2 million. With no reserves and debt still outstanding from the rebuild of the mountain’s double chair, the shareholders equity position has dwindled substantially. Rising costs of the single chairlift rebuild and no concrete financing commitment have forced the board to explore desperate measures. In a October presentation about the situation, the financing committee recommended to the mountain that they pledge all of the assets of the mountain to the NSB in order for them to lend the mountain the money for part of the project. No reserves and a mountain of debt means that another winter like this will force a default under the loan leaving the shareholders with nothing.

In addition, the mountain has ignored one of the fastest growing and weathiest sectors of the winter sports business. The mountain claims that the take off area of the lifts can’t handle snowboards. Jake and his team had a presentation from the lift designers (Doppelmayer/CTEC) and the designers assured them that the single chair return station can be easily redesigned to include a takeoff area that can support snowboard activity. The design of the return station of the double chairlift that was recently installed included snowboard egress as a requirement by Mad River. A replacement double return station with a modern line tensioning system would be cheaper to install than the designed replacement of the antique counterweight system.

So, the Burton team sees Mad River in a precarious financial position and figures that they can recoup their minimal investment quickly once the necessary structural changes are in place. Citizen’s Bank has been very receptive to Jake regarding financing. This would make sense as Citizen’s has recently gained a banking foothold in Vermont and would like to be more visible.

Jake plans on retaining much of the atmosphere of Mad River except, of course, he would allow snowboarding and build a terrain park on the Practice Slope. With his financing commitment, he can move quickly and with a minimal investment have the lift situation figured out by opening day in 2006. The mountain also has a right on adjoining land which could sweeten the deal considerably. Jake has been in touch with Redstone (Burlington property developers) about potential base area expansion and development.

So, who know what will happen between here and the board meeting.