Last to Open, First to Close
Idaho’s Tamarack Resort Going Out of Business
On the hook for a too-generous $250 million loan from Credit Suisse, the new resort was unable to survive the economic crisis.By Jonathan Weber, 3-01-09
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Hailed just a few years ago as the first major new ski resort to open in the U.S. in decades, Tamarack Resort in central Idaho will be shuttered on March 4, victim of the real estate meltdown and the profligate lending and spending that’s brought a number of big Western resort projects to their knees.
Tamarack has been in receivership since last year, when the ownership group led by Jean-Pierre Boespflug ran out of money and defaulted on a $250 million loan from a Credit Suisse-led consortium. The lender group agreed to provide interim funding to get Tamarack through the winter season and hopefully find a long-term solution, but with the continued deterioration of the economy and a weaker-than-expected ski season, Credit Suisse and its partners have agreed to provide only a very small amount of new funds to assure security and limited maintenance on the property.
All recreation and hospitality services will be shut down indefinitely on March 4, with about 200 people losing their jobs and a skeleton staff of 16 remaining on site. Foreclosure proceedings will continue, and the Credit Suisse lender group will likely end up owning most of the property and attempting to find a buyer for it.
The Yellowstone Club in Montana and Promontory Club in Utah also got in trouble after taking big loans from Credit Suisse in 2005, and both of those properties are now operating under Chapter 11 bankruptcy protection. In those cases, the federal bankruptcy court and other key players were persuaded that the long-term value of the property depended on keeping them open, but that argument did not prevail at Tamarack. Unlike the others, the Tamarack case is not technically a bankruptcy but rather a foreclosure proceeding that’s governed by state law, which may be a factor in why it played out differently.
Tamarack, located a little over two hours north of Boise near the town of McCall, was on a roll just a few years ago, with a spanking new ski hill, a championship golf course, lake frontage for watersports, lots of trails for cross-country skiing and hiking, and the promise of a fancy new hotel from tennis stars Andre Agassi and Stefi Graf. Like other new resort projects, the economics depended on the sale of expensive real estate and condominiums, and initial sales were very strong.
But cost overruns, weak operational management and slowing lot sales began to catch up with Boespflug and Tamarack by late 2007, and the emerging credit crisis scotched a planned refinancing of the Credit Suisse debt in early 2008. Tamarack was unable to complete the crucial “village” project - essentially the base area for the ski resort, with shops and restaurants and condos - and quickly slipped into insolvency. The partnerships that owned the resort filed bankruptcy protection early last year, though those cases were later thrown out and foreclosure proceedings were launched in state court.
The best-case scenario would be for a buyer to emerge and take over the property at a steep discount; the Credit Suisse lender group would lose most of its money, and Boespflug and his main partner, Mexican businessman Alfredo Miguel Afif, would be wiped out entirely, but the resort would be able to operate, employees would have jobs, property owners would have their amenities, and at least some of the many creditors would get paid off.
In a worst-case scenario, the resort could literally be taken apart, with the chairlifts re-possessed and all equipment and real estate liquidated in a fire-sale.
While Tamarack was in many ways a boon for an area that had been in an economic tailspin since the closure of a big lumber mill, it was also controversial in some quarters. A previous effort to develop a resort in the same location had failed, and critics said it was just another case of beautiful Western spaces being developed and privatized for the benefit of the rich.
These questions aside, Tamarack’s location always presented business challenges. It’s far from a major airport, and even the Boise airport lacks good connections to the East Coast and major international cities; that made it a challenging sell as a global destination resort. As a regional resort, meanwhile, it lacks large nearby population centers and faces lots of competion for Boise skiers and golfers.
With so much infrastructure already in place, Tamarack could be appealing to a long-term buyer. But in light of the severe recession and the rapidly shrinking number of people able and willing to spend seven figures for a mountain vacation property, it’s not at all clear that such a buyer will be found anytime soon.
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Comments
can anyone comment on how many homes and/or condos are up there and have been sold? It looks like they issued 80 or so C of O's in 2007 - are there homes sitting up there now that are dark? I know they took a lot of deposits on the Fairmont project - were those returned or locked up in the bankruptcy? Thanks -
Unfortunately, there were unleveraged buyers who now own a highend piece of real estate at a closed golf and ski resort. Tamarack was generaly a good neighbor in the valley and employed a lot of hard working, invested people. Someone will pick this up for a song at some point since it will be impossible to start a project like this for some time. It is an amazing piece of real estate. My guess is the original owners pull a "Blixeth" and try to take it back at a big discount on the loan they defualted on with Credit Suisse. I would assume, that like Blixeth, they pulled out their equity from the CS funds and then some and are sitting on some cash.
are there homes/condos up there selling for less than 200/sq. ft.?
These circumstances are more the product of of poor vision than poor management. Someone in one of the recent comment sections said something to the effect that the "Amenities West" is an extension of the suburbs, and in truth, that is probably the case.
The people who go to the Tamarak's, the Vail's and the Sun Valley's - the people who actually keep such places financially afloat are suburbanites whose monies are the fuels that keep the little economic engines of such places running. Even little Moab, now now not so quaint community as it was in past decades runs because of the suburbanites who drive their Subaru's thousands of miles to ride their Mountain Bikes on the Slickrock trails.
As the experiment that was suburbia crashes to a close and the prolifigate ways of Middle Class spending habits vanish along with it, we should expect an end to everything as we once knew it. Everything is changing for the worse, and how badly it shall
end no one can possibly know.
As a commenter above so stated, that little area of Idaho traded off some sweat-filled logging and milling jobs for a promise of luxury and decadence. Now it shall have neither.
Does anyone know how to reach to the right people at Credit Suisse? My email is: If you know of the city where the corporate offices are that would help. Otherwise I can contact a title company to help me locate them, but if some else could point me in the right direction that would get us up going faster. Perhaps we can help the community (while doing what we normally do). Gayna
The people of Valley county have been reliant on tourism since the local timber industry started pulling out in the 80's; no one made a trade-off for the life styles of the rich and famous. Tamarack was seen as a boon to the "keep it like it is" folks and a boom for people in a depressed rural economy that invited the promise of more tourist opportunities, better employment and real wages...not all of the employees moved here from other places and not everyone got rich.
Oh yeah and then there is the skiing...miles of untracked ridgeline, lots of snow, tons of intermediate terrain in area to bring in the tourists (families that pay for a high quality/low fear factor experience), and the lure of the side country: over 5000 acres of nearly lift accessible out of bounds glades and 2000+foot steeps for those of us that know what skiing is all about. Then there is the atmosphere; a low key place(Steffi and Andre who?), uncrowded, a year round resort with great amenities(mt bking, ziplines, sea kayaking, golf, boating, fishing, hiking, dining, loding etc. etc.) friendly employees and a sense of pride in the product...what a refreshing break from tradition! Unfortunately, y the owners tried to do too much too soon. Unfortunately, the lending industry and the world economy tanked. The result is the loss of a promising and upbeat new resort and a lot of shaken up lives. The loss of Tamarack will be mourned by more than will applaud it.
Just getting rid of the do nothing mngmnt is somthing the bank wanted to accomplish and shuttering it was one way to do so. I'm not saying names but you guys milked your salaries good. Every time I saw just milking it. I'm not talking about middle tier patrol,grooming,maint,etc I'm talking about upper tier.
Hopefully just a shake up to generate interest and not somthing thats never gonna happen again.
The mountain is fun once you learn it when the snow is good to the valley floor for long runs with features. Some of the most featured terrain not extreme but 15 jumps on run makes up for it.Spines mushrooms logs cliffs 2000 foot shots sidecountry .
Inbounds 5 minute hike gets me 2000 feet of trees uncut for days after the storm when its on. 1000 foot shots when it isnt. I would go to my stash 2 weeks after snow and still find some good snow this season.
It doesnt suck as bad as they say its a hard mountain to learn the lift served and have fun. but when you learn it you're laughing at the haters cause I know your mountains you dont know mine.
Its my mountain now smell my 2 stroke beotches. In fact its my whole mountain range for skiing cause I'm the President of West Mountain. I'm the only one left. Everything south of 4 corners was already mine cause mine were the only tracks being laid down. I've just aquired 5000 acres of the useless permit. I think the bank already burned the permits just out of spite.
Just another drunken rant. I have to mentally make good out of it.
it's sure to be a success and would add to the socialist system.
Brundage actually does have a master plan for additional development and new lifts at the mountain over the next ten years as the market recovers. The large resorts are all suffering with the slowdown in the economy and specifically the real estate sales that they need to drive the huge investments they put into lifts and lodges with granite covered bathrooms. The sole and future of skiing is in the town hills like Brundage with great skiing, good people,cold beer and conservative business plans. In the mean time do you come here to ski or pee?
Tamarack almost got their funding to turn chairs this winter, they are facing an impossible battle at this point. The resort goes into foreclosure in March if you have a few million in spare change! Maybe the next owners will have better luck than JP and Alfredo.
When the savings and loans went belly up, and the US Govt had to foreclose, take over the assets of the FSLIC, the Reagan administration formed the Resolution Trust Corp to dispose of all that real estate. The people who bought RTC properties, cheap, and most were cheap, made a lot of money, and in turn, taking that inventory out of the market and putting it into a lower market at realistic and lower prices slowed and then stopped a construction decline of major importance. So, I guess my question would be where is Fannie Mae and Freddie Mac in this deal? Are they just slipping the good deals to the politically connected, and thus earning very handsome bonus money from taxpayers? Rep Barney Frank and his ilk seem to have dodged a thousand bullets on this financial fiasco, all arranged, prompted, promoted, and driven by the Congressional left in the thought that anyone, working or not, should be able to buy a McMansion. I guess paying for one was not a part of the equation. But, Barney, et al, did manage to deconstruct the whole of finance in the US and the world, and bring us to the brink of world wide depression. For that he will get re-elected next year, in the never ending saga of voter apathy, sloth, and egregious self interest that is proving to be our collective undoing. The banks are profiting hugely, and you do wonder how much of that is coming from selling the US short, as GoldmanSachs did in the liar loan and monkey mortgage business. Betting against the US to make your fortune, with US Govt assistance, seems to be a self fulfilling prophecy that none need, except those greedy bankers.
I watched a PBS examination of student college loans, and was flabbergasted that the private sector loans, the loans outside the Federal programs which have limits, (there are not limits it appears on tuition, book and course fees) and are governed by Congressional interests in getting re-elected, are usurious to say the least. Many have interest rates in double digits at a time the US Treasury is almost at a negative interest rate. College kids borrowing 18% money so they can finish school is usury. No more and no less. That those loans are due and payable the day you graduate, job or no, and they have no protection from debt collectors, is a sad commentary on the left and the liberals who create this trap for kids. Now we have tens of thousands with loans they cannot service due to joblessness, a recession, and they are hounded, some into homelessness, by collectors who need not worry about bankruptcy because the usurious bankers got protected from student loan defaults by specific legislation. Congress rid itself of oversight, of being the backstop for financial risk, by taking bankruptcy protection from student loans, specifically. Student loans, and IRS taxes owed, are not dischargeable by referees in bankruptcy. Of course, there might be a Federal judge with a sense of fairness who would change that law by decision and some sort of fairness doctrine. Who knows? But the frigging message was damned clear to high school students who do not come from families with means: DON'T GO TO COLLEGE BECAUSE YOU WILL BE HOUNDED FOREVER FOR DEBT YOU ACQUIRE TO PAY THE COSTS OF THE UNDERGRADUATE DEGREE. And that, America, is not what the GI Bill, Pell Grants, the whole process was to be about.
The failure of Tamarack, Big Sky, and all the other upside down developments was due to unregulated banking in the US, which had taken this country down the same path once before, at which time the Congress made banking-by-the-numbers Federal law due to bankers being too stupid and greedy to contain their bad judgement. Add the current crisis, and add to it the credit card and college loan bait and switch loan business, and it is apparent we need to get back to banking-by-the-numbers for both commercial and retail banking. And the sooner the better. Hear that Good Ole Boy Harry? Max? You have taken care of the rich and the hoi poloi. Now it is time to take care of our future. Who gives a shit about climate change if you can't get an education because some GoldmanSachs types need another few billions in bonus money? We need to take care of kids, first, by getting them educated. Then they can solve the other problems. How can you not follow that logic?