It’s nail-biting time for Park City and its ski resort
By Christopher Smart
The Salt Lake TribuneFirst published Aug 25 2014 01:01AM
This week promises plenty of drama for Park City and the Utah ski industry as resort titans go to the mat again with the winter season at Park City Mountain Resort(PCMR) fast approaching and still in doubt.
Two important deadlines could determine whether PCMR cranks up its lifts for the ski season. The legal dispute between the resort and its landlord, Talisker Land Holdings, casts a shadow over most of Park City and western Summit County, where the economy is based on tourism. And neither side has appeared ready to give much ground.
Even though Deer Valley and Canyons Resort are in and around Park City, if PCMR were not to open, it could dramatically impact tourism.
"Obviously there is a sense of anxiety the longer this goes on," Bill Malone, executive director of the Park City Chamber of Commerce and Visitors Bureau, said in an interview.
The dispute has not yet impacted bookings for the ski season, he said. But it will if not resolved soon.
Summit County Council Chairman Chris Robinson, in a statement released Friday, warned of the "potentially disastrous impacts on our resort communities" if an agreement isn’t reached. "We don’t want our economy held hostage by a dispute that can be pragmatically resolved between two agreeable parties."
There could be an announcement Monday because court-ordered mediation talks were scheduled to end Sunday. On another front, 3rd District Judge Ryan Harris will consider a proposal to keep PCMR open for the coming season at a Wednesday bond hearing. But, as with the mediation talks, nothing is certain in this legal smackdown.
The dispute • The contention centers around a long-term lease for 2,852 acres of ski terrain. PCMR, which is owned by Powdr Corp., missed its April 30, 2011, lease-extension deadline but, according to PCMR officials, had given verbal assurances to Talisker that it intended to extend the lease for 20 years.
Talisker, which also owns the nearby Canyons Resort, disagreed and wanted a substantial increase in the lease payments. When the two sides couldn’t reach a deal, PCMR, fearing eviction, filed suit. The parties have been in court ever since.
The lease goes back to the early 1970s, when then-Park City Ski Area leased ski terrain from United Park City Mines. In 1975, the parties clarified that the agreement would end April 30, 1991, but the $155,000 annual lease could be extended by three 20-year terms to 2051.
Ian Cumming’s Powdr Corp. purchased Park City Ski Area in 1994 and renamed it Park City Mountain Resort. Canada-based Talisker acquired United Park City Mines in 2003.
Talisker leased its Canyons Resort to Vail Resorts Inc. in May 2013 for $25 million annually with the potential that Vail also could operate PCMR if it prevailed in court. Vail took over the litigation in the PCMR case.
After almost three years in court, Talisker/Vail seemed to have the upper hand after Harris ruled earlier this year in its favor on key parts of the case. The judge looked poised to order an eviction.
PCMR vowed to appeal the ruling to the Utah Supreme Court. Further, officials stated publicly that PCMR owned the base acreage and facilities that are essential to operating the resort. It would not cooperate with Talisker/Vail and, if Powdr Corp. were to be evicted, the Park City resort would sit idle.
There is, however, a potential to shuttle skiers to PCMR via chairlifts at Canyons Resort. But such an operation poses challenges and appears doubtful for the upcoming season.
In the meantime, both sides have launched public-relations campaigns in an apparent attempt to gain local support from a community increasingly wary about the uncertainty of the approaching ski season.
Most recently, PCMR established a website at KeepParkCityOpen.com, where readers can sign a petition. A recent full-page ad in the local newspaper, The Park Record, exclaims, "Let’s Work Together to keep Park City Mountain Resort Open."
Call for compromise • With Park City residents in an uproar over a scenario in which PCMR would not open, Park City Mayor Jack Thomas joined county officials Friday in issuing a public statement telling the parties to knock off the one-upmanship and compromise for the good of the community.
"Our patience and the community’s collective patience is wavering," Thomas said. "Park City and Summit County will not reward bad behavior by investing in businesses who do not view their success inextricably linked to the success and well-being of the broader community."
That followed a statement from Thomas last month that "for either party to operate the resort next season, each must be willing to compromise and leave something on the table."
He was referring to a Talisker/Vail proposal that would ensure PCMR remained open until litigation is exhausted. It offered to allow PCMR to continue to operate the ski resort if it posted a bond to cover annual rent, damages and attorney fees.
Last week, PCMR filed documents in 3rd District Court spelling out what it believed is a fair rent, based on what its real-estate consultants reported. It suggested a lease rate between $225,000 and $1 million per year. With damages, attorney fees and rent from May 1, 2011, to Jan. 31, 2015, the bond should be set between $1,021,308 and $6,559,616, according to PCMR.
But an attorney for Talisker/Vail said that proposal is much too low. The bond should be based, at least in part, on PCMR’s earning, said John Lund.
Talisker/Vail’s court filings that outline its bond proposal is heavily redacted to protect PCMR’s proprietary financial information. However, those values are known to Lund and Talisker/Vail officials.
"We take the position that what they should pay is based upon what they are making," Lund said. "A significant amount of that revenue is associated with our land."
But an attorney for PCMR said the proposal to set lease rates based on earnings is not fair and is counter to Utah law.
"The law is clear about what can be bonded for," said Alan Sullivan. "The rent and damages that Talisker can recover must be based on fair rental value of the property, not earnings."
It’s unclear whether Harris will rule on the bond come Wednesday. But just about everyone in Park City will be watching.