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New Guidelines for Terrain Parks
On the heels of a major injury settlement last spring, terrain park management has become a hot topic for resorts across the country. It’s the main topic at NSAA’s fall education seminars, and the reason for an update of NSAA’s terrain park guide, expected to be completed before the season opens this fall.

As unveiled at the Midwest Ski Areas Association summer meeting, it’s a comprehensive effort. To oversimplify, it involves greater education and staff training, increased efforts to educate users about the park and their own responsibilities for safety, and guidelines for the construction of table tops and other features, including takeoff angle, size of feature, landing area length and pitch.

While resorts have generally done a great deal of staff training and user education and have exercised good judgment in feature design and construction, the aim is to update all areas about state-of-the-art practices in each of these areas and thus to continue the evolution of terrain parks and management thereof. To cite two examples, the construction guidelines promote the “out rather than up” concept to keep aerialists closer to the ground, and quality of hits over quantity, both in an effort to make parks as safe as possible.


May I See Your Passport, Please?
Will implementation of the new passport requirements for travel to and from Canada, scheduled to take effect in January 2008, hamper cross-border resort visitors? It’s quite possible. Unless the new rules are delayed (again), border snarls may well affect resort visits on both sides of the border.

In some instances, customs entry points are not equipped to process visitors. Plus, many Canadians and Americans still don’t have passports, despite years of warning about the impending change. In the U.S., the State Department is partly to blame; it is still not prepared to handle the volume of passport requests it receives. Given the time required and the hassle involved, day visitors may opt to simply stay within their borders. And that could affect resorts like Jay Peak, Vt., in a big way, since Canadians make up half the resort’s visits.

Fortunately, Congress can forestall any premature attempts by the Department of Homeland Security to enact the requirement, via the Leahy Stevens amendment. The amendment would delay implementation at least until summer 2008, and possibly later. Given pressure from businesses all along the border, odds favor a delay. Watch for a resolution by October.


Intrawest Puts Resort Chiefs in Charge
Maybe it’s just a coincidence, but with real estate suddenly becoming a dirty word in financial circles, Intrawest has drastically shifted its priorities from real estate to resort operations. Word is, now that Fortress Investment Group is in control, Intrawest COO Alex Wasilov has sculpted a new organizational structure that places resort operations at the top—reversing the longstanding dominance of real estate within the company.

According to an internal memo, each resort is run by a “resort chief” who oversees all aspects of the resort’s business, including the master plan, and is solely responsible for the financial results. The new chiefs: David Brownlie (Whistler/ Blackcomb), Chris Diamond (Steamboat), Gary DeFrange (Winter Park), Gary Rodgers (Copper), Sky Foulkes (Mountain Creek and Stratton), and Bill Rock (Snowshoe).

Hugh Smythe, former head of the entire operations division, is directing the development of “common business platforms” for resort services, such as mountain ops, F&B, lodging and retail/rental, which presumably will be implemented at all resorts. David Barry is now running Alpine Helicopters, including the CMH empire.

Since Intrawest had largely tapped the real estate potential at most of its resorts, such a change in focus was inevitable. Instead of mountain ops being the amenity that provides value to real estate, the chiefs’ task is to make the developed real estate serve mountain ops and drive increased revenue. It didn’t take Fortress long to figure that out, did it?


Right Time for REITs
Following the recent buying binge of CNL Properties (see Industry Reports, page 12), the REIT which bought Mountain High, Sunday River, and Sugarloaf within a two-week period this summer, the subprime credit crunch led some resort pundits to predict this activity would slow. In fact, the opposite could occur.

Two features of REITs may make them even stronger players in the short term (read: six to twelve months). First, REITs generally have relatively low leverage—less than 40 percent as a rule. That’s because ratings organizations punish REITs whenever their leverage gets higher than that. And second, REITs get most of their funds from retail investors. Since many other potential uses of investor funds have soured, REITs look pretty sweet right now.

And the broader credit turmoil won’t go away anytime soon. With many billions in ARM loans resetting (probably at significantly higher rates) between October 2007 and February 2008, expect more bad news on the credit front, regardless of what happens in the subprime market. And resetting ARMs will affect a wider range of institutions than those involved in the subprime market. Cash will be king, and REITs are part of the royal court.

That can be a good thing. As (land) lords, REITs are benevolent masters who allow their managing leaseholders to run their operations independently. And because they are tax-advantaged investors, they gladly accept a lower rate of return than an equity partner might.

For all these reasons, expect to see more news of REIT activity in the coming months.


Into the Abyss at The Canyons
Poor American Skiing Company. It can’t even go out of business gracefully. ASC found a buyer for its last remaining resort, The Canyons (see story, page 12), but the sale has come under assault from two other entities who want The Canyons for themselves.

One of them is Kenny Griswold, who leased much of The Canyons’ land to ASC when it first came to town, in 1996. Over a year ago, Griswold sued ASC over an alleged default under its ground lease, with the aim of reclaiming The Canyons; that case will be heard in May 2008, and the sale of The Canyons will be subject to any eventual ruling on that suit.

Nonetheless, on July 15, ASC agreed to sell The Canyons to Talisker Corp. for $100 million. A few weeks later, Vail sued to stop the deal, claiming ASC had not properly considered its own, $95 million offer. Then Vail upped its bid to $110 million. In a moment of relative sanity, this trio agreed to await a Colorado court’s ruling on Vail’s request for a temporary injunction before doing anything else. That ruling is expected by Oct. 1.

It was only a few days, though, before Griswold sued ASC again, this time alleging that the 1996 lease agreement required Griswold’s approval for any transfer of ownership. Then Griswold was sued by Peninsula Advisors of Park City, which claimed that Griswold breached an agreement to sell land within the boundary of The Canyons, worth hundreds of millions in development rights, to Peninsula. Naturally, Griswold countersued.

One thing is certain. Sooner or later, ASC is headed for total dissolution. The company failed to meet a July 31 deadline to satisfy Oak Hill Partners, the company’s majority shareholder. After the sale of its remaining assets (mainly, The Canyons) and once ASC's outstanding liabilities are met, the remaining proceeds will be distributed to Oak Hill.


Those Resilient, Savvy Yankees
We’re not talking about the baseball team, but New England’s snow sliders. Given last winter’s crazy weather, this beleaguered lot could be excused for being gun-shy about buying tickets in advance of the coming winter. But Ski New Hampshire found the opposite to be true, and that reveals a great deal about how snowsliders make their winter plans.

The association sells a variety of day-ticket options as part of its annual funding mechanism. When it put these tickets up for sale on July 11, they nearly sold out at once. Perhaps inspired by season’s pass price hikes at the former ASC resorts, savvy buyers snapped up $400,000 worth of tickets, for prices ranging from $20 to $45 a day. Talk about pent-up demand!


SHORTSWINGS
The 10th Mountain Division, whose World War II veterans largely built the ski industry in the U.S., held its last official reunion in Denver in July; many of its members are in their late 80s and 90s, and less than 1,500 of the 15,000 or so are still alive . . . Two Vermonters have been booked for cutting illegal lines, a time-honored tradition among diehard tree skiers, at Jay Peak, Vt. . . . Lesotho hopes to make its Afri-Ski resort, with its one slope and 10,000-foot elevation, the top destination in Africa; if so, it would supplant Morocco as the continent’s wintersport Mecca.