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Park City Mountain Resort loses lawsuit — and slopes

Published May 22, 2014 7:29 am

Ski industry • Judge says resort's lease of mountainside from Talisker Corp. had expired.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Park City Mountain Resort looks like it lost its mountain.

A 3rd District judge ruled Wednesday the resort missed a 2011 deadline for renewing its lease on more than 2,800 acres of mountainside from Talisker Corp., which said afterward it "looks forward to bringing in Vail Resorts as its new tenant and operator of the terrain."

Vail Resorts has been running Talisker-owned Canyons Resort, adjacent to PCMR, for the past year. In addition, Vail took over the lead role on this litigation, in which Judge Ryan Harris also determined Talisker did not violate the lease by turning over operation of Canyons to Vail without offering it first to PCMR, or its parent company, Powdr Corp.

The 83-page ruling leaves PCMR with only the base facilities and the lower portion of the mountain. But that could be enough to make it difficult for Vail to run PCMR's expansive terrain from Canyons.

"Even if Vail ultimately prevails in this litigation," Powdr Chief Executive John Cumming said, "it cannot possibly operate a resort on the leased property. They do not own the adjacent lands and facilities that are essential for ski operations to take place.

"And they are not for sale," he added, citing Powdr's plans to develop a Woodward athletic training facility on PCMR's base lands.

Cumming previously threatened to remove all but three of PCMR's lifts if the lawsuit were lost, contending they were company investments not permanently fixed to the land and thus not part of the lease.

Vail Resorts CEO Rob Katz responded that his company would have no problem replacing lifts, if it came to that, but he hoped Cumming would recognize that a scorched-earth approach only would hurt the Park City community, which depends heavily on the success of Canyons, PCMR and Deer Valley.

Judge Harris said he had shared the hopes of "most members of the Summit County community" that the lawsuit would be settled amicably "for the good of everyone, including the community, and keep both resorts operating in something close to the usual manner."

But no settlement was reached, so the judge ruled in favor of Talisker on 8½ of 9 motions. All that PCMR has left is a claim it was not informed by Talisker until more than a year later that the lease had expired on May 1, 2011.

Alan Sullivan, PCMR's lead attorney, said the rulings will be appealed.

"We believe there are significant factual disputes which require a trial," he said. "We are committed to ensuring that PCMR has its day in court so it can show that it acted responsibly and in good faith and that its right to use the lands at issue has been extended."

Sullivan said PCMR expects to operate as usual in the winter of 2014-15 while the appeals continue. Talisker previously issued two eviction notices to PCMR.

Talisker attorney John Lund accused PCMR of causing "years of unnecessary uncertainty for the Park City community and its guests." Dismissing PCMR's prospects of succeeding on appeal, he called on PCMR to "stop using the legal system to cause further delay and uncertainty and refocus instead on a positive and constructive solution."

Lund added that Talisker plans to seek "back rent and damages" from PCMR.

Cumming countered that Talisker and Vail were responsible for disrupting the mutually beneficial relationship that existed between the Park City community and the three resorts that surround it.

"Our community has become one of the world's premier ski destinations because each of our three resorts offer a unique ski experience and compete with each other for guests," he said.

"A Vail takeover would diminish what we collectively offer," Cumming added. "They may boast of their domination of other communities, but that flies in the face of what has made Park City so successful."

Park City Mayor Jack Thomas said that with both sides claiming to represent the community's best interest, he hopes they will "work to reach ultimate resolution, which will not result from these rulings alone. We have every reason to expect that resort operations will continue uninterrupted."

mikeg@sltrib.com

Twitter: @sltribmikeg