from the new west blog: resorts in trouble

Wall Street Journal Analyzes Idaho Resort’s Collapse


By Jill Kuraitis, 7-08-08

 
 

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:

“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.”

Read the rest of the story here.



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