Thursday, November 15, 2018
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What does it mean?

Do the Muellers still own the ski area?
No.
Do the Muellers still own the developable real estate around the mountain including the North Village Property?
Yes.
Will CNL Lifestyle Properties (the purchaser) have someone here overseeing the ski resort?
No.
Will the Muellers continue to run the resort and make the decisions regarding the business of the ski area?
Yes.
Who has the permit for the proposed Snodgrass expansion?
CNL, but the Muellers still control the process.
Is CBMR now just one more cog in corporate America?
Sort of… but not really. According to its website, since 1973, CNL and its affiliates have formed or acquired companies with more than $23 billion in assets. Sounds corporate. But Triple Peaks and the Muellers are still calling the shots at CBMR. Now if the Muellers don’t pay the rent, some suit in Orlando will likely send a new operations company to the valley.
Will the national economy still have an impact on the resort?
Uh… Hello?! Of course, but the Muellers feel like they are now much better situated to respond quicker and with more confidence when things change.

In a complicated business deal culminated last Friday and reported first by the Wall Street Journal (I hate that), the Muellers found a way to sleep better at night. They took away some of their debt and now may be one of the few ski area operators in the country not beholden to a bank. It’s not like the banks are a little flaky right now or anything.
Triple Peaks, LLC, which owned CBMR and Okemo in Vermont and ran Mount Sunapee in New Hampshire, has morphed into a ski resort operations company. They essentially cashed in some of their equity chips. So now they’ll pay rent (instead of a loan), continue to hire the ski instructors, market the resort (with passion), sell the hamburgers, build the igloos and groom the snow.
“The Muellers aren’t going anywhere,” said Diane Mueller. “And we don’t have to report everything to a special board or anything.”
“We will still make the decisions,” said Tim Mueller. “And hopefully a profit.”

It’s as if you owned one of the restaurants on Elk Avenue…. say, for example, Giuseppe’s Pizza Palace, and along with the restaurant, you owned the building the restaurant operated out of. You decide it is time to pay off some credit cards and put some cash in the bank. So you sell the building but strike an agreement with the new owner to let you continue to make pizza in the building. You pay the new landlord rent and keep the profits from pizza sales. And if you decide Giuseppe’s is going so well you want to expand the building or add another oven, you go to the landlord for financing… which would raise the rent.

To make it more complicated, because of the tax laws governing real estate investment trusts (REITs), the landlord (in this case CNL Lifestyle Properties) didn’t buy the whole property. They bought the restaurant building but not the vacant lot behind the kitchen. CNL is limited to buying things that provide rental income. So when you feel the time is right, you can add an outdoor bar to the vacant lot and it’s yours.

Bottom line—if you like what the Muellers have been doing with the Crested Butte ski area, you’ll probably like this deal.  They now have some breathing room and a line to capital.
If you were hoping for some quick and major changes in how things were going here… this deal isn’t going to provide that. It will keep things moving (look for a Red Lady Lodge sooner rather than later, which is a lot more than most ski resorts have on the planning docket) but the overall local and national economic situations are still a factor. Even CNL and its $23 billion in assets can’t change that. But it certainly appears as if the Muellers have struck a pretty good deal and in the end, that’s probably pretty good news for the valley.

—Mark Reaman

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