It would be a dereliction of my duties as a ski writer and voice of reason not to write, comment and add my two cents regarding the bombshell PCMR dropped on our cozy little Park City community last Friday. You can read the nuts and bolts all over the web- Here and Here and Here and Here and well, Everywhere. I spoke with peeps from both sides and though they’re hinting, they’re hiding behind the phrase “we’re not authorized to talk because of the ongoing litigation.”
I have my own theories. One involves water rights. Talisker purchased the majority holdings of United Park City Mines in a complex merger and acquisition transaction in 2003 and became the principal owner of UPCM. Talisker Mountain Corp (owned by Canada’s Talisker Corporation) also owns Tuhaye, a high-end golf course community southeast of the Jordanelle Reservoir, Empire Pass and Red Cloud developments on Deer Valley’s slopes, Canyons Resort (the whole resort), The Waldorf Astoria Hotel, Talisker on Main restaurant, Bistro restaurant at the Silverado Lodge and a significant portion of PCMR’s 3300 acres. Water’s always a good reason to fight; especially when you need it. This dry season put a terrible strain on resources for snowmaking.
Another thought is that when the lease came due, Talisker saw it as an opportunity to ‘adjust’ the tab on PCMR. The lease was up March 1, 2011, and PCMR didn’t provide written confirmation that they wanted to extend the lease to 2031 until April 30, 2011. Whoops. Written notice aside, however, Canyons cashed the rent check and allowed PCMR to put $7 mill in renovations back into the resort. Some would argue that’s constructive consent to the lease. As a landlord, if I want to raise my tenant’s rent when the lease is up, I don’t take and cash a check for the former amount. I hand it back with a note saying that rent’s gone up.
Perhaps the amount PCMR has been paying on their lease was well below market value? I don’t know how much UPCM was charging the resort for the surface rights to the slopes but I’d have to wager it was a steal considering they’ve been extending the lease since 1963. But PCMR is a worldly smart corporation. They know the value of the land, the operation and their employees and you can only ride a good deal for so long until the new leasors want to bring you up to speed.
But if, as Canyons says, they have made a fair proposal and if, as PCMR says, they have tried to be ‘more than fair’ on their side, then why wouldn’t the two be able to reach an agreement that makes sense? No one wants to see Park City’s anchor resort sit dormant for 2012-2013. Not even Canyons. “It doesn’t make sense to anybody,” said Canyons’ Steve Pastorino. “PCMR’s success is critical to all of our success.”
Fair market value offer?
Is Canyons trying to squeeze PCMR for more than fair market? Both sides that I spoke with say they “have no idea” what the other side wants. Canyons was surprised PCMR filed a lawsuit and PCMR is surprised they’re surprised. “Maybe they felt like they were stuck,” surmised Pastorino. “But it’s kind of odd. For the last three months, we’ve been talking about how well we (the resorts) cooperate but this flies in the face of that.” (He’s referring to SkiLink and efforts to connect Utah’s seven resorts.)
PCMR controls their water rights, the parking lots and the base area. So what could or would Talisker do with the muffin top if they couldn’t have the whole muffin? So far no one’s talking- to me or to each other. So it makes sense to file a lawsuit to force Canyons to say exactly what they’re after and to find out where you stand but why would PCMR go so public? Most of the time lawsuits fly well under anyone’s radar. This one might have as well. But perhaps PCMR’s throw the first punch strategy is working. They are even posting these ‘what Park City means to me’ video vignettes on YouTube. Talisker is now looking like the Big Bad Wolf in all of this. Someone even tweeted me- “What’s next? Deer Valisker?”
Truthfully, I’m in the dark like everyone else and I don’t have much more to go on than the statements the resorts have released to the public. It seems crazy that two hometown resorts are duking it out like this. I’m sure someone can point to a similar sitch in history somewhere else – Aspen? Tahoe? Winter Park?- but I can’t.
I’m waiting to hear when the date’s been set for that court hearing. It should be mighty interesting.