Florida Real Estate Trust Gets Stake in Big Sky Resort

By Robert Struckman, 10-31-08

In the thick of the financial turmoil, Big Sky Resort near Bozeman did what others couldn’t—arranged for a $74 million cash infusion.

On Oct. 7, Big Sky’s parent company, Michigan-based Boyne Resorts inked a lease-buy-back deal with CNL Lifestyle Properties, a Florida-based Real Estate Investment Trust, said Big Sky spokesman Dax Schieffer.

One insider to the deal said the money will be spent not on any big capital projects but on continued infrastructure improvements to aid development of real estate as well as improvements on the ski mountain.

CNL has had a similar relationship with other Boyne properties for several years. CNL—an REIT—owns but doesn’t manage resorts. Boyne leases the resorts and manages them for CNL.

It is worth noting, that this deal providing cash to Big Sky came to fruition during tough financial times, even as other resorts in the region have sought bankruptcy protection or otherwise struggled under debt or unable to get cash for much-needed improvements. In early 2008, for instance, resorts including Tamarack Resort in Idaho and Promontory in Utah found themselves in bankruptcy court as the high end real estate market across the region tanked. More recently, Moonlight Basin near Big Sky lost a reported $170 million line of credit when investment bank Lehman Brothers collapsed. Construction at Moonlight has stalled, and the resort has laid off a good portion of its workforce.

Big Sky’s financial move will make no difference on the ground in Big Sky—except that the resort will have more money to make improvements. Early numbers suggest the resort will have a good winter season. The ski mountain is scheduled to open on Thursday, Nov. 27, Thanksgiving Day.