from the new west blog: resorts in trouble
Wall Street Journal Analyzes Idaho Resort’s Collapse
By Jill Kuraitis, 7-08-08
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Reporter Justin Scheck at the Wall Street Journal has an extensive piece today analyzing the downfall of Tamarack Resort in Valley County, Idaho.
“The luxury-resort boom brought windfalls to once-sleepy towns throughout the Rockies, as developers planned resorts with secluded homes and memberships to golf and ski clubs. Banks such as Credit Suisse Group, which syndicated nearly $1 billion in loans to luxury developments in the West, fueled the boom.
A resort’s success was often staked to real-estate sales: As a Tamarack lender recounted in recent court filings, the resort had a business model in which ‘operating expenses would exceed revenue and the primary source of profit would be generated by the sale of real estate.’”
Scheck’s piece recalls Tamarack’s winter 2007-2008 bankruptcy story (first broken by NewWest.Net) and the subsequent house-of-cards collapse:
[End of article]“Tamarack went into default on its Credit Suisse payments. Business entities owned by (company leaders) Messrs. Boespflug and Miguel, which hold a majority ownership stake in Tamarack, filed for Chapter 11 bankruptcy in February. Credit Suisse followed with a foreclosure suit, seeking to take over Tamarack’s majority-ownership stake, according to state and federal court filings.”
Its all about selling real estate. The annual dues of these knock-off clubs from Yellowstone Club success failed to understand that the need to charge annual dues to cover operational expenses just was not part of the plan. Take the money and run and when you run out of land to sell your out of business. Yellowstone Club is the only club which has not failed apar from a scaled down version in Wyoming.
You have to be original, Tamarack and Promotory and Las Vegas Lakes were all copy-cat spins from Yellowstone Club.
Anyway, too bad for Idaho and Utah.
Looks like Credit Suisse will end up owning the YC Club next. At this point CS owns more property in the US than anyone!
Comment By Horst Wagner, 7-08-08Better the Swiss than the Chinese, thank you...
Comment By Sisyphus, 7-09-08Hmmm I thought the article barely scratched the surface.
Comment By lemondisright, 7-10-08The Yellowstone Club was a failed concept from the beginning and every idiot that invested in it has come to realize that as the real details are dragged through the court in the Blixseth debacle. Invest with beginners and take your chances.
Comment By tas_515, 7-11-08I agree with Sisyphus that this article is journalism lite. Since when is it enough to report on any story that that Wall Street has covered the story, and leave it at that?
Comment By over in oregon..., 7-11-08Hey Bigpee. I agree that it's about real estate and you make an interesting point about member dues in that this is not sustainable unless lot sale profits are bolstered by something else. But you make an interesting point at the bottom that I don't think I totally understand - that you have to be an original. I wonder what exactly you mean. Why can't an original and a copycat both succeed if the market is big enough? Assuming the copycat has done a good job copying a successful business model. Care to explain?
Comment By Jill Kuraitis, 7-11-08tas,
This is a blog post, in a New West blog. It differs significantly from journalism, and it differs from our other pages. Blog posts very often - indeed almost always - include or feature a heads-up to an interesting article in the blogosphere which readers may find interesting. That's our defined mission for the New West Blog.
If you want more extensive writing, check out our topic pages and city pages. Links are on the upper left of this page. In addition, our print New West Magazine has features you may enjoy. Under Topics, click on "Magazine."
The funny thing is even Boise guru Jill K aint got the scoop.
The boyz at the resort have financing and are waiting until the final days of bankruptcy protection till they come forth. Or says my sources. So haterz stay away. The lifts are spinning and this winter they will spin. I know it sucks its the worst ski hill in America. 5 minute hikes to 2000 foot plus backcountry runs really suck. I'm sure you all have been there done that or have you?
I got chiggers the other day swimming and now I scratch my privates even more. I went to some hot springs and got crabs by just sittng down. So please stay away.
Thanks
inbred idaho gap toothed V plate moron.
3hThank's.0m I compleatly agree with last post. eov
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