Idaho Property still on the ropes
Buyout Offers Expected Shortly for Tamarack Resort
By Jonathan Weber, 5-28-09
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A handful of possible buyers have emerged for the shuttered Tamarack Resort near McCall, Idaho, and if all goes well a new owner who would re-open the resort could be in place within the next 3-4 months.
The situation remains tenuous, and a court hearing Thursday focused on if and how the resort could come up with additional temporary funding to maintain the property while a deal is negotiated. The latest interim funding provided by the Credit Suisse-led lender group - which loaned Tamarack $250 million in 2006 and is now owed well over $300 million with penalties and interest - will expire at the end of the month. Final resolution of that issue was postponed until tomorrow.
But for the first time in the many months (the resort filed for bankruptcy in February of 2008 and then shut down in March of this year), there seemed to be some optimism about the big picture, following a mediation session last week in Los Angeles that all sides portrayed as successful. Although there is a strict confidentiality order surrounding the mediation, sources familiar with the situation said the goal was to come up with a deal structure that would be acceptable to Credit Suisse and the owners of the resort, which is now in receivership.
The parties did reach agreement on several of possible scenarios, these sources said, including a full buyout of the property or a transaction that involved less cash but left the Credit Suisse lender group with much of the equity.
Other sources who asked not to be identified said that Jean-Pierre Boespflug, majority owner of the resort, and Mexican businessman Alfredo Miguel Afif, the second largest shareholder, were each working with separate partners on a bid for the property. Washington-based businessmen Jerry Barnett and Richard Getty, the backers of the nearby Blackhawk development and each 8 percent owners of Tamarack, are also said be preparing a bid. Two outside parties are also said to be interested.
Steve Milliman, an attorney for Tamarack, said “credible offers” were expected very soon, with one coming as early as tomorrow. While the prospective buyers would provide interim funding for the three to four months it would take to close a deal, that money would not be available for at least a few weeks, even assuming the offers come in as expected.
It’s not clear what the buyers might pay, and they would also need substantial financing to fund the resorts operating losses until the real estate market turns around. As with other new resorts in the West, Tamarack depends on real estate sales to pay the bills, and vacation home sales across the country have all but ground to a halt.
One person familiar with the situation said the price was likely to be in the $30 million to $40 million range, with another $75 million to $100 million available to invest going forward. Those numbers could not be confirmed. Almost any scenario would leave the lender group with a big loss and would wipe out the current equity holders completely.
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Comments
Thanks for your coverage of this and other CS stories. You are an old style reporter that covers the five W's and does the footwork to fill in the details. That's rare today, where reporters seem to think that their job is to take a few obvious facts and spend the rest of the article telling the readers what they should think about them.
Rumor was that if CS took on Yellowstone Club some of the ole Intrawest gang were going to manage it for CS et al.
You write the value down to the mechanics liens and working capital to move forward plus whatever it takes to finish the village units (which must be candidates to hold for 3-5 years till the warranty issues become clear) and get a great operator in there who positions the resort where it should be rather than JP's vision and you might have a good long term solution.
I suspect that fractional ownership and smaller private residences and more condo etc are what you need to fill the place up so you support the services. I just dont see single family 2nd homes as the solution to the operating deficit problem.
I would have loved to seen the original 10 year financial projections JP was using. The guy's heart was in the right place,
but he was dreaming.
There is so much entitled up there and with the land trade (i believe it is till feasible) so much more that you have a 20-40 year build out if you get the price points down, run a 4 season operation and focus on building out the village and filling those beds by having the rates at under $100/night.
Boomers have driven skiing for years, to sustain the business resorts need more skiers and younger skiers to pick up the pace, boomer 2nd homes are soon to be sunbelt/island, golf is in the crapper and needs to be affordable as well.
where is DB and BS when you need them??
I hear a certain CS exec. is going to be in the area in the next month, couldn't hurt to invite him by?
You have some good points. Kind of like the "cheapest resort in the west" thing you got going on. The shit is there and it would cost more to tear it out. (contrary to most of Boise's opinion.)
With some of the higher paid guys gone now you could hire on the guys still around to do their jobs. because they higher paid people werent doing anything except walking around in flip flops and driving golf carts. My point being some of the guys still around can run the mountain well.
One problem is that Boise hates Tamarack and Boise peeps dont really even ski. So when your population base hates the fact it even exists, thats tough.
Bogus and Brundage I know , way better I know. The Boise peeps act like Brundage is Snowbird and Bogus is Bridger Bowl.
Well neither are even close. So your point being ?
The longest best backcountry runs out of all 3 ,well sorry to break it to you, Tamarack.
Brundage has better snow, lift served powder, Tamarack has better/ faster groomers,park and backcountry.
Put the 2 mountains together and it serves up some good times. Thats all I'm saying.
Check out the recent articles on the resort market--skiing has extracted the last big dollars from boomers by up scaling the amenities and primo grooming to make things easier on old joints--Tamarack's groomers rank right up there with the best, just not the best as they don't have 3,000+ vertical. Golf is so overbuilt that they are closing a lot of courses and CS has eaten a lot of equity on Promontory, Lake Las Vegas, Tamarack, Yellowstone and apparently with Bobby Ginn on the eastcoast.
Most of my boomer cohorts, who are pretty typical profile of what Tamarack was playing to are done in my estimation. This last round in the equity markets and the RE markets left some serious marks. Most were happy to take lender money on stated income loans with minimum down and pay option choices so long as the prices were popping 15-30% a year. Only problem is like any gamble it sucked them in until it could deliver those greatest pain. I hear a former $5.2 million (most expensive house in Tamarack) recently sold for $1,200,000! That buyer is showing some balls wonder what the per SF cost is?
I am sure you are right, lots of folks probably still around the hill could run the operation with the right GM. I remember Spence on the hill with his cellphone glued to his ear listening to JP for long conversations--can you say micromanage?
I am not sure who the Boise Peeps are, but as well as I know Idaho, JP and Alfredo probably were fighting an uphill battle with those accents, but when they started naming buildings with European names I really got a bad feeling about where this was going to end up.
I know my way around Idaho mountains pretty well after starting on them at a young age. I have recently come to regain my appreciation for what Corey Engen, and his partners did right back in 1960 when they put Brundage together. The last few years I have had the very best powder skiing in bounds of my life up there and that is saying something!
I especially have been impressed with RC's impact on the mountain. He reminds me of a seasoned Chief in the Navy, he has been around and seen it all, and he knows how to run a tight ship in any situation, sell lots of tickets and make his owners look great. Man would he shake up Tamarack!
All that said, I also had more fun smoking groomers and hiking out of bounds at Tamarack in the last 4 years! I might have objected to what I thought was a little too much focus on park and terrain to the detriment of some great skiing, but JS did a good job getting that mountain in great shape every day.
To have a dual mountain pass for under $500 was the bargain in the ski business in my mind. You see what Schweitzer charges for just their pass?
1st Thing is put together a board consisting of folks who know the ski business first, and the resort business with experience making a profit from an operating basis regardless of the situation. If they don't do that the entire mess will crater again in the next 2-3 years--there is no fast recovery in the resort real estate market in Central Idaho even on the horizon. Such a board would know the numbers inside and out and would be entirely focused on getting the visitors way up by offering the best prices in the Northwest. They also know how to control costs at variable occupancy levels and can tighten things up as necessary and still turn a daily profit. Since the long term upside is the sale of real estate over the next 20-40 years it would help to have some folks on the board who know how to take advantage of that wave, if and when it presents itself. The key is the purchase price, the debt service and completely changing Tamarack's image to locals and Boise folks.
The 2nd thing the new folks should is declare Tamarack an Idaho resort for the locals, Boise Peeps, Lewiston, Eastern Oregon, and most of all Seattle and Portland--I am not sure I ever saw even one Tamarack brochure in the top end ski shops in Seattle or Portland or Spokane?? Flying into Boise and jumping up to McCall is no different from west coasters going to SV, only it costs about half as much with a lot less attitude.
3rd thing is rename those village buildings to reflect the local heritage. Get them finished, drop the finishes down to a reasonable level and get em filled with folks with families and especially families who are new to skiing and draw them in with great package pricing that is affordable.
4th thing is ask Andre and Steffi to stay around and be the face of local families, putting time with their families ahead of careers etc.--i.e. blow up that idiotic Fairmount Hotel model--did anyone ever stop to think that there may not be more than 20 days a year that 300 hotel rooms in all of Idaho are filled at $500+ night?
5th, dump the entire Members club BS and open everything up to everybody all the time. Tamarack needs visitors, skier days, golf rounds, mountain bike trails etc. It has already proven that there is not a demographic that will support the Private Club concept from an operating standpoint.
As a pretty famous Ski Operator likes to say, when you are running a resort, "there are a lot of moving objects". First and foremost you need to fill chair seats, food service seats, tee times etc. up, it never works to raise the price point--volume is the secret to success.
6th Get Amir (i hope i got the spelling right) back at the front door greeting everyone--the man is a consummate host, probably the finest employee of Tamarack I had the pleasure of speaking to every day i was there!
7th See if you can get a few of the RE team still around pulled back together and see if they get the lenders sitting on foreclosures to let them re-market them at the new prices as 1/8th to 1/10th shares based on cottage prices in the low 200's, and so on up the scale. Somebody is going to have to put the financing together, but heck if CS's investors holding worthless debt can not figure out how to package the new real estate debt (like fractional financing or condo/hotel financing) at Tamarack by juicing it up with some yield or guarantees then jumping in the original CS deal was not the only problem they have.
Okay, I know the odds are not great, but I love a long shot--lets hope DB and BS and BD find a common solution--strange bed partners they would not be. Maybe BR could be talked into a run or two on Tamarack and Brundage--we taught him to ski, it would be nice if he put Tamarack right--a lot of folks lives in the Valley could catch a real lift if the Pros from Dover stepped and took the reins!
I am doing my part!
any chance you have a line on the current operating budgets for Tamarack--I am thinking they might be part of the receivership process and available to the public through the court process?
Update from the brief hearing this week: the new deadline is June 15 to have a deal, receiver is funded until then...
you still following the situation at Tamarack? it looks like a no go for operations this winter. So now everyone begins to line up for the legal process next spring. You going to cover it? Lots of nice folks in Valley County are still waiting to be paid and the stabilization of Tamarack is crucial to property values in the Valley.
I hear the rumor is the Mexico money was Carlos Slim, Alfredo's brother in law. That, if true, would be an interesting story line eh?
No noise from JP, it would seem he is just hanging on to the leverage of redemption under state law to try and "extract" something at the very end of this process.
If Slim was the guy offering hard money rates, stepping in front of CS investors (which doesn't mean a lot) but also not even offering one bone to the contractors and vendors then I assume Alfredo and JP and now playing on opposing teams.
Given the request for 80 acres of entitled land on top of the first position and incredible high interest rates and no likely opening before mid January at best I don't see the judge approving the plan. But it is obvious it is an attempt to get in the prime position come next springs legal process.
What amazes me is that Alfredo's group==I know it says they are homeowners but come on==proposes to put a political hack as the receiver/manager in their proposal--shouldn't Alfredo have learned by now that the resort business is no walk in the park?
without a credible resort operator on board Tamarack is never going to reach its potential and more likely is going to fail again unless they bring in someone who knows how to handle all the moving parts.
While this story has a lot less drama than YC, it is still an important story and Long Valley needs a good ending to staunch the heavy bleeding among the natives.
I suspect some powerful folks, besides Slim are positioning themselves for the resolution of this mess. Hopefully someone will eventually show up with the right strategy and the right team to execute it==up to now all I have seen are amateurs, and that is so unfortunate for the great folks in Long Valley, one of my most favorite spots on the planet!