MRG Releases Single Chair Costs — Exceeds Estimates, Narrows Scope

Yesterday, the MRG Board released Minutes from their May 20th Board meeting at which they approved the contract for the single chair rebuild/replacement. As mentioned here in earlier posts, the costs contractually agreed upon are in excess of the amount that was approved by MRG Shareholder vote. According to the minutes, “legal counsel concluded the shareholder authorization could include maximum increase of 10% ($140,000) plus inflation ($47,600). Therefore the $1,498,000 expenditure does not require shareholder reauthorization. ” That means that the Mountain is free to spend up to $1.58 million without shareholder approval.

The agreement was approved subject to “escalation as per the contract” in costs which were undefined by the meeting minutes and presumably in excess of the project costs disclosed yesterday.

The project scope was also narrowed to exclude site work being done at the mountain this year, in advance of the project start date. This has the effect of decreasing the project costs to stay within the amount authorized by the shareholders. These public facts are all consistent with our earlier reports about the single chair and the potential investor group and Burton’s purchase of MRG.

A financing plan has not been released as mentioned below.

Burton to Purchase Mad River? — Update 4

While not responding to the investment group directly, Mad River Glen’s board has adopted a defensive strategy for the cooperative and it’s ownership. According to sources who were at recent MRG Board Meetings, the mountain has entered into a plan to lease the single chairlift which needs to be replaced to a third party. MRG would retain operating control and responsibility during the term of the lease, but effectively “ownership” of the lift would be transferred.

Without total control of the single chairlift or of the replacement project, members of the Burton team advised Jake to pull away from the group and the transaction.

The contract has been signed with the lift company and lift-related project costs will be approximately $1.5 million. Site work and other costs will add to this total. A plan to pay for the costs has not been finalized. Site work is being started this summer and the replacement work will begin after the ski season in 2007.

Burton to Purchase Channel Islands Surfboards

Burton story Here.