Thursday, August 16, 2018
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CBMR sale is still on track and everything is moving smoothly

Public process is not expected to hinder Vail deal

By Mark Reaman

The sale of Crested Butte Mountain Resort to Vail Resorts is proceeding apace and should be closed in early fall. While no specific closing date has yet been set, CBMR vice president Erica Mueller says having it signed, sealed and delivered by Labor Day would be ideal, but sometime this autumn is likely.

Vail Resorts Mountain Division executive vice president Chris Jarnot said thus far, everything is moving as expected. “We’re focused on a smooth integration and it’s been going great,” he said. “We’ve been coordinating with the team at CBMR to understand what we’ll need to manage in terms of systems, benefits and other important integrations. We are working through [the closing procedures] right now with the Forest Service, the state of Vermont and the state of New Hampshire. Crested Butte, Okemo and Sunapee are included in a single transaction, and we have to wait until all three processes are complete before we can close.”

The management contracts for the Mount Sunapee ski area in New Hampshire and the Okemo ski area in Vermont are also part of the CBMR deal and, since both of those resorts are located on some state-owned land, the public process is more intense. New Hampshire state approval is needed to transfer the Sunapee lease from the Mueller family to Vail, and while some have expressed concern this could hamstring the deal, Mueller said that isn’t the case. While there is a public process the state process is primarily procedural. Okemo is going through a similar review.

According to the Concord Monitor, more than a hundred people packed into the main lodge at the Sunapee ski area at the end of July to listen to Vail representatives and voice the desire to preserve the unique qualities of a ski resort located in a state park. According to the news report, New Hampshire “attorney general Gordon MacDonald promised a ‘robust and thorough process’ in vetting whether the proposal meets the lease’s standards.”

Vail representative Pat Campbell made it clear at the public hearing that the company wants to be a “good neighbor” and said, “We want to acknowledge that we really recognize this is a very special place.”

Mueller said it was expected that the Sunapee public process would take some time but there do not appear to be any kinks in the upcoming transfer process. “There was no real timeline to begin with but the public comment period in New Hampshire ends August 8,” she explained. “Having a decision done by Labor Day would be fantastic with the ski season approaching. But we think the closing will happen in early fall.”

Mueller said when the closing takes place and the sale documents are signed, a lot of behind-the-scenes work will kick in. “The Vail reps have been spending a lot of time here and our management team has been communicating with their Vail counterparts,” said Mueller. “They are setting up the mechanisms to make the changeover once the documents are signed. There are a lot of things people won’t see that need to be implemented before the ski season opens in November.”

Jarnot explained that once contracts are completed, the official transition would begin. “On day one, we have to hire the employees into our company,” he said. “Other IT systems changes and transitions in practices will come later. Some will hopefully be prior to the coming winter operating season and some may wait until next spring. What we are able to implement really depends on when we are able to close.”

Mueller said the two management teams have worked well together and no real surprises have come up in the transition. “It has been all good and pretty smooth,” she said. “They’ve been awesome to work with and they are excited about Crested Butte in general. We’ve said it before but I really don’t see this sale changing what Crested Butte is. The community nuances won’t go away.”

Jarnot agreed. “We haven’t encountered any real surprises. Everyone I have met with has been fantastic—curious, full of questions and suggestions, and truly welcoming and collaborative,” he said. “We recognize that the community from Gunnison to Mt. Crested Butte is very tight-knit. My impression is that everyone understands that they are all interdependent—including CBMR—for each other’s success. Some people are a bit wary, but most are genuinely curious about how we will fit into the community. I have appreciated the enthusiasm and candor of everyone I’ve had the opportunity to meet.

“Additionally, the team at CBMR has been great,” Jarnot continued. “I had the opportunity to present to them last month on Vail Resorts’ mission, vision, values and strategy. I think they generally realized that we are more similar than they might have thought in terms of values and how we think about our business.”

One item still being discussed in the Choice Pass. That pass option gives a heavily discounted season pass to local kids who pledge not to partake in using drugs or alcohol. The pass can save money for local families. “We’ve been talking to [Vail Resorts] about the Choice Pass and they have been receptive,” Mueller said. “They think it is a neat program and a good cause so I think they will look at it when the deal is concluded.”

Jarnot was not yet in a position to comment on the Choice Pass.  “Vail Resorts will continue to honor previously sold 2018-19 season pass products for Crested Butte,” Jarnot noted. “We have also been actively integrating the resort into our Epic Pass and other season pass products for the 2018-19 winter season. Resort access and benefits at Crested Butte are of course pending closure of the transaction to acquire Triple Peaks.”

One thing Jarnot said he was looking forward to was Kebler Pass in the fall. He described it as jaw-dropping this time of year, so he said he “can’t wait to drive it in late September when the aspens change.”

Fair enough.

The Vail sale entailed $82 million for the management rights and $155 million to pay off all leases for CBMR, Sunapee and Okemo.

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