Lease dispute threatens Park City Mountain Resort
It was almost as if the earth shook last week in Utah's premier ski town: Park City Mountain Resort (PCMR) announced it might not open next ski season if a lawsuit it filed against its landlord is not successful.
At issue is ski terrain that PCMR leases from Talisker Corp., which, among other things, owns and operates Canyons ski resort. After lease negotiations broke down, PCMR filed the suit March 9 and made a public statement that questioned whether Talisker had bargained in good faith.
"We don't know what [Talisker] has to gain by forcing this stalemate," said PCMR spokeswoman Krista Parry. But a hostile takeover of the resort is not possible, she said. "We will continue to own and control all the base facilities, parking lots, lifts and water rights for the resort."
The dispute took everyone by surprise, said City Councilwoman Liza Simpson, who also works as a bookseller at Dolly's on Main Street.
"Holy hot dog," she said. "If any Park City ski resort didn't open for the ski season, there would be a cascade of impact that would be really negative for the economy and the community."
Practically every business and resident in Park City would be affected if PCMR didn't open. Tourism would plummet. Retail sales at sporting goods and clothing shops would drop with it. Restaurants and lodges, too, would see severe losses.
And Park City's sales tax reimbursement would shrivel.
"It's difficult to calculate an exact [dollar] figure," said City Manager Tom Bakaly. "But it would be significant."
Already, Parkites are taking sides. One letter to the editor in The Park Record newspaper applauded PCMR for standing up for its employees, while another accused it of "scare tactics" to improve its negotiating position.
Details surrounding the negotiation breakdown remain sketchy. But PCMR characterized them as lease extension talks, while Talisker said the discussions were about a new lease not an extension.
Since the early '60s, PCMR which is now owned by Powdr Corp., founded in 1994 by Ian Cumming has leased ski terrain from United Park City Mines. Talisker acquired the mining company in 2003.
Although neither side is willing to discuss details of the failed negotiations, PCMR's lawsuit states that its annual lease rate is $155,000.
By contrast, The Canyons will pay about $3 million this year for ski terrain it leases from Wolf Mountain.
The lawsuit, filed in 3rd District Court, states PCMR met the conditions for a lease extension as outlined in the original agreement.
"The central issue in this case is whether the agreements under which [PCMR] has operated the resort and occupied the premises for more than 40 years expired in 2011," the suit states. "Prior to March 2011, however, [PCMR] gave both United Park City Mines and Talisker unequivocal notification that they intended to extend the agreements for an additional 40 years, to the year 2051."
The suit asks for $7 million in compensatory damages and demands a jury trial.
Talisker has not yet answered PCMR's court claim, and no hearing date has been set.
Beyond businesses at PCMR, the impasse will impact all of Main Street, said Mike Sweeney, whose family owns the Town Lift Plaza, between lower Main Street and Park Avenue. "It adds a lot of uncertainty to the market,"he said. "Nobody knows how this will be resolved."
Some, like Jan's Mountain Outfitters, which has shops on Park Avenue and on the plaza at PCMR, have already ordered skis, snowboards and other goods for next season.
"I don't know who's right or wrong," said store manager Karl Jacobsen. "All I know is it's bad for business."
Jacobsen said he fears that if PCMR didn't open next year, would-be tourists might get the idea that Deer Valley and The Canyons also were not operating.
Representatives for Talisker said PCMR's blame game won't help resolve the issue.
"We believed the negotiations were continuing," said Mike Goar, managing director of The Canyons, in an interview. "We were surprised and disappointed in the court filing [by PCMR] and their public campaign."
Despite statements by PCMR, Goar said Talisker is a good community partner that has "invested significantly in the community over the last several years."
Goar said he is hopeful that "things will turn out in the end," but added that future negotiations would be for a new lease, not a renewal. "To be clear, the lease has expired."