blog: generation recreation

Ski Town Real Estate Projects Face Reality

By Michael Pearlman, 10-07-08

There isn’t much that I have in common with a 72-year-old Republican candidate for president, but there is one common trait we share: economic policy isn’t a strength for either of us.

With the current economic crisis the only subject on people’s lips these days, my insight into the problem is centered on what I’ve read about locally and seen out my front door. For resort communities, the writing is on the wall that the real estate development gold rush is grinding to a halt. Developers who relied on a steady supply of wealthy transplants and vacationers with super-deep pockets eager to buy trophy homes and snap up condo-hotel rooms are finding these people a tougher sell.

In Jackson Hole, the Snake River Sporting Club owes money all over the place and appears to be teetering on the verge of bankruptcy. A poor idea from the moment it was announced, this project drew protests from the moment it began the planning process back in 2002. The golf course and home sites are located along channels of the Snake River and amidst a nesting area for bald eagles. What may have doomed the project ultimately, however, is its location. Any real estate agent in Jackson would tell you that trophy-home purchasers want to have views of the Tetons, and this development well south of town offers neither Teton Views nor in-town convenience.

Over in Colorado, the Vail Plaza Hotel is rumored to be facing foreclosure proceedings and I previously posted about Tamarack Resort, which is facing a bankruptcy hearing as well. How would you like to own a house at a resort where the company CEO feels compelled to send out a letter assuring homeowners it’s safe to book their ski vacation?

“C’mon out and stay at our ski house this winter Bob, I’m pretty sure the ski area will be open!”

Of course, to be negative is to be poisonous in an industry that requires everyone to put a smile on their face and repeat a mantra that everything is fine, even as the credit crisis deepens. Take Ketchum, Idaho, developer Jack Bariteau, who’s confident, despite the see-saw stock market and lending crisis, that everything will work out for his hotel development. In real estate, the glass is always half-full I guess.

I’ve wondered aloud for years how there could possibly be enough potential guests to support the ever-growing bed base of $400 hotel rooms in Teton Village. Jackson Hole Mountain Resort has to be a little concerned about the economic crisis, having taken out major loans to construct a new aerial tram. It will be interesting to monitor occupancy rates in the resort towns this winter if the economy remains in a recession. Though resort CEOs say that snow is the biggest factor in determining ski area visitation, they may wind up being as overconfident as the Wall Street honchos that denied the sky was falling even as they were ducking the debris.

When does the trickle down hit the ski town service industry, and at what point do hotels and restaurants start laying off their hourly workers?

Michael Pearlman blogs from Sheridan, Wyoming.

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