The Crested Butte News Serving the Gunnison Valley since 1999
The deal brings a “comfort level”
The sale of some of the assets of Crested Butte Mountain Resort to CNL Lifestyle Properties, Inc., last week was met with initial surprise by the local community but that has changed to optimism. As more of the story has come out, the general reaction to the deal has been positive.
The transaction allowed the Mueller family, owners of Triple Peaks, LLC, which included CBMR in its resort portfolio, to sell some assets and lease back the property to their operating company. The Muellers will continue to run the local ski area and make decisions on its future as result of the “sale-leaseback” deal.
Local officials and business people are feeling good about the situation the Muellers have created with the sale-leaseback arrangement.
“I don’t know the specific details, but from what I understand, it seems like our ski area is secure in its future operations, financially,” said Crested Butte mayor Alan Bernholtz. “It would be a shame to switch horses in mid-stream, so I think it is wise of CNL to continue to use the same management team. The Muellers are great people.”
The mayor of Mt. Crested Butte had the same reaction. “I think this is a good move,” said William Buck. “I don’t think it is going to initiate any great boom from a real estate perspective but it stabilizes CBMR and gives them a foundation and gives a comfort level to the resort.”
Buck looks forward to continuing to work with the Muellers. “We’ll be dealing with people we know and we are very comfortable with that,” he said. “Giving the resort stability will help the town in the long run. This move should raise all boats. The residents and visitors to Mt. Crested Butte will benefit as a result of this action.”
One of the major real estate developers in Mt. Crested Butte sees the investment by CNL as a great sign. “We look at this as great news,” said Eagle Resort Development partner Dan Fitchett. ERD built the Westwall and Wildhorse developments. “I think that given the economy we have all seen in the last 12 months, if someone sees the value in Crested Butte and makes a huge investment in the resort at this time, it’s indicative of the value that’s in Crested Butte and Mt. Crested Butte. These are sophisticated real estate investors and to invest money in this market is impressive. With this investment, I expect to see real estate purchasers look more favorably on the Crested Butte market. The bottom line is that I’m excited about this.”
Doug Kroft has owned Red Lady Realty since 1978 and is excited about this latest news as well. “From what I understand, the positive thing is that it allows the Muellers to improve the ski product through the access to capital. In terms of the eventual economic recovery, to be able to go forward and see improvements in the ski product is wonderful news. The Muellers have always been dedicated to improving the ski product and customer satisfaction is important to them.”
Kroft said seeing someone invest in the local economy is great news. “Obviously CNL has a lot of confidence in Crested Butte and in the Muellers,” he said. “The bottom line is that hopefully it will enhance real estate values and maybe this area can recover quicker when the national economy turns around.”
Coldwell Banker Bighorn Realty owner Dan McElroy also expressed a positive outlook. “My initial reaction is that I’m excited,” he said. “From what I know, it’s a real positive thing. It’s probably the best news we’ve had here since the Muellers initially bought the ski area. It appears to give them some debt relief and at the same time freedom of movement with decisions along with access to capital,” he said. “I think they were hog-tied with financing over the Red Lady Lodge and now they can move ahead and do some things,” McElroy continued.
“I don’t expect a major turnaround in the real estate market,” McElroy added. “Buyers have an eye on the local economy and they’ve just received some good news. But the other eye is on the national economy and that’s still too uncertain. If not for the national debacle, this could have been a major mover.”
McElroy is also looking to the future. He says if the proposed Snodgrass expansion makes it through the federal regulatory process, “the resort will have the financial capabilities to go into start mode. In the meantime, just getting started with the Red Lady Lodge will be a big boost.”
The general business community showed a little surprise with the announcement, according to Crested Butte-Mt. Crested Butte Chamber of Commerce director Christi Matthews. “There might have even been a little alarm at first,” she said. “But as the dust has settled and we find out more about the deal, people are more comfortable with the situation.”
Matthews said that having access to additional capital resources puts CBMR in a unique position. “It puts this resort a step ahead,” she said. “Other resorts are having to scale back and put off projects but there is the opportunity here to perhaps move ahead with some amenities at a good time.”
She too, likes the fact that the Muellers will continue to manage the ski area. “It allows us to keep going in the direction we’re headed with the vision of Tim and Diane,” she said. “Tim and Diane are a good presence in the community. While the resort will have corporate ownership, it will be overseen at a local level by people who understand the industry and the community.”
Longtime Crested Butte businessman, real estate broker and restaurateur Eric Roemer said from what he knows, “It appears all positive. They don’t have to deal with the banks every three years and they have a 40-year perspective. It sounds like they now have a lot of property that is unencumbered and that’s positive.
“The one thing that’s unknown is the extent of CNL’s ongoing commitment,” Roemer continued. “They want the rent to be paid so they want a successful venture. I assume, without knowing, that they are willing to make the long-term commitment and so they must expect the resort to grow and expand. I assume they want to see Snodgrass approved and if that’s the case, I see that as positive. Overall, at this stage of the game, the deal looks like a basic refinance and it is a positive step.”
So, while the future still holds a bit of uncertainty, the local business community sees the sale-leaseback as constructive for the overall health of the resort. The deal was signed Friday, December 5.
