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CNL looking for buyer for 16 ski resorts, operational leases would not change

post #1 of 36
Thread Starter 

CNL Lifestyle Properties is a REIT that owns 16 resorts including Sunday River and Sugarloaf in Maine, Bretton Woods, Loon Mountain and Mount Sunapee in New Hampshire, Okemo Mountain in Vermont, Crested Butte in Colorado, Brighton in Utah, and Northstar-at-Tahoe and Sierra-at-Tahoe in California.  CNL announced on March 14, 2015 they are looking to sell as part of an expected "exit strategy."  In the short run, skiers won't notice because the long term leases with the companies that operate the ski resorts would remain in place.  Boyne manages several of the resorts, including Sunday River and Loon.

 

* * * From an ABC News article:

A Boyne official said skiers needn't worry about the potential sale of their beloved ski mountains.

"For the skier, it's a nonevent," said Steve Kircher, president of eastern operations for Boyne, which will remain the lease holder, regardless of ski resort ownership, for several more decades.

http://abcnews.go.com/US/wireStory/real-estate-investment-trust-sell-16-ski-resorts-29637514

* * *

post #2 of 36

Here's the full list of what CNL owns. I didn't realize there were arrangements like this, where they own it, but others runs it. For instance, I just thought Northstar was a Vail owned resort.

 

CNL Ski Resort Ownership:

  • Brighton Ski Resort, Utah, managed by: Boyne USA
  • Summit-at-Snoqualmie Resort, Washington, managed by: Boyne USA
  • Cypress Mountain, British Columbia, managed by: Boyne USA
  • Loon Mountain Resort, New Hampshire, managed by: Boyne USA
  • Sugarloaf USA, Maine, managed by: Boyne USA
  • Sunday River, Maine, managed by: Boyne USA
  • Northstar-at-Tahoe Resort, California, leased by: Vail Resorts
  • Sierra-at-Tahoe Resort, California, managed by: Booth Creek Inc.
  • Mountain High Resort, California, managed by: Mountain High Resort Associates LLC
  • Crested Butte, Colorado, managed by: Triple Peaks LLC
  • Okemo, Vermont managed by: Triple Peaks LLC
  • Sunapee, New Hampshire, managed by: Triple Peaks LLC
  • Bretton Woods, New Hampshire, managed by: Celebration Associates
  • Jiminy Peak, Massachusetts, managed by: Jiminy Peak Mountain Resort, LLC

CNL Owned Mixed-Use Ski “Villages”:

  • The Village at Copper, Colorado, managed by: Intrawest
  • The Village at Mammoth, California, managed by: Intrawest
  • The Village at Blue Mountain, Ontario, managed by: Intrawest
  • The Village at Stratton, Vermont, managed by: Intrawest
  • The Village at Snowshoe, West Virginia, managed by: Intrawest
  • Whistler Creekside, British Columbia, managed by: Intrawest
  • The Village at Northstar, California, managed by: Booth Creek
post #3 of 36
Thread Starter 

@dbostedo : take a look at this webpage.  Lists the main corporations that own multiple resorts and who actually manages the resorts.

 

http://www.nsaa.org/press/industry-stats/industry-stats-pages/who-owns-which-mountain-resorts/

post #4 of 36
Quote:
Originally Posted by marznc View Post
 

@dbostedo : take a look at this webpage.  Lists the main corporations that own multiple resorts and who actually manages the resorts.

 

http://www.nsaa.org/press/industry-stats/industry-stats-pages/who-owns-which-mountain-resorts/

 

Here's the one my list came from : 

 

http://www.mrablog.com/ski-resort-ownership-in-north-america-who-owns-what-part-1/

http://www.mrablog.com/ski-resort-ownership-in-north-america-who-owns-what-part-2/

 

Though it's 4 years old now, so some thing - like Afton Alps - have changed.

post #5 of 36
Thread Starter 

For total info overload, check out the SAM Ownership Timeline:

http://www.saminfo.com/ski-area-ownership-timeline

post #6 of 36
post #7 of 36

mod note - above post is just consolidating threads

post #8 of 36
Quote:

Originally Posted by marznc View Post

 

A Boyne official said skiers needn't worry about the potential sale of their beloved ski mountains.

Do you guys believe this statement? Wouldn't a new owner possibly close some of the mountains?

post #9 of 36
Quote:
Originally Posted by nemesis256 View Post
 

Do you guys believe this statement? Wouldn't a new owner possibly close some of the mountains?

I don't think they'd close hills.  I suspect they'd prefer to spin off the poor performing hills to another owner if possible in the hopes they could find the trick to make it work.  I don't think a buyer would want to close hills.  That's zero return on that investment.  Unless they're terribly unprofitable with no hope of turning them around.  Some folks on here have good insight into the business side of things.  Be interesting to hear their take on it.

post #10 of 36
Saying it makes no difference who owns things is a stretch. Experience from the last 7 years has shown it does make a difference.

Of course things could've gone down w/o the new owner. Also things that get press tend to get done, such as lifts, snow guns, versus the mundane running which actually makes a difference to people who come but might not show up on a stat.
post #11 of 36

I'll but a bid on sugarloaf

post #12 of 36
Thread Starter 
Quote:
Originally Posted by dbostedo View Post
 

Here's the full list of what CNL owns. I didn't realize there were arrangements like this, where they own it, but others runs it. For instance, I just thought Northstar was a Vail owned resort.

 

CNL Ski Resort Ownership:

  • Brighton Ski Resort, Utah, managed by: Boyne USA
  • Summit-at-Snoqualmie Resort, Washington, managed by: Boyne USA
  • Cypress Mountain, British Columbia, managed by: Boyne USA
  • Loon Mountain Resort, New Hampshire, managed by: Boyne USA
  • Sugarloaf USA, Maine, managed by: Boyne USA
  • Sunday River, Maine, managed by: Boyne USA
  • Northstar-at-Tahoe Resort, California, leased by: Vail Resorts
  • Sierra-at-Tahoe Resort, California, managed by: Booth Creek Inc.
  • Mountain High Resort, California, managed by: Mountain High Resort Associates LLC
  • Crested Butte, Colorado, managed by: Triple Peaks LLC
  • Okemo, Vermont managed by: Triple Peaks LLC
  • Sunapee, New Hampshire, managed by: Triple Peaks LLC
  • Bretton Woods, New Hampshire, managed by: Celebration Associates
  • Jiminy Peak, Massachusetts, managed by: Jiminy Peak Mountain Resort, LLC

CNL Owned Mixed-Use Ski “Villages”:

  • The Village at Copper, Colorado, managed by: Intrawest
  • The Village at Mammoth, California, managed by: Intrawest
  • The Village at Blue Mountain, Ontario, managed by: Intrawest
  • The Village at Stratton, Vermont, managed by: Intrawest
  • The Village at Snowshoe, West Virginia, managed by: Intrawest
  • Whistler Creekside, British Columbia, managed by: Intrawest
  • The Village at Northstar, California, managed by: Booth Creek


I think the two places missing off this list from 2011 are:

 

  • Cranmore:, NH, managed by: Jiminy Peak Mountain Resort, LLC
  • Stevens Pass, WA, managed by: Stevens Pass Mountain Resort, LLC
post #13 of 36
Quote:
Originally Posted by Scott43 View Post
 
Quote:
Originally Posted by nemesis256 View Post
 

Do you guys believe this statement? Wouldn't a new owner possibly close some of the mountains?

I don't think they'd close hills.  I suspect they'd prefer to spin off the poor performing hills to another owner if possible in the hopes they could find the trick to make it work.  I don't think a buyer would want to close hills.  That's zero return on that investment.  Unless they're terribly unprofitable with no hope of turning them around.  Some folks on here have good insight into the business side of things.  Be interesting to hear their take on it.

New owners only close hills when they have some degree of monopoly.  Restricting supply in that situation allows higher prices.  When Jiminy Peak bought Brodie Mountain,  they closed Brodie.  When ASC bought Haystack (near Mount Snow), they closed that as well. 

 

Quote:
Originally Posted by Tog View Post

Saying it makes no difference who owns things is a stretch. Experience from the last 7 years has shown it does make a difference.

Of course things could've gone down w/o the new owner. Also things that get press tend to get done, such as lifts, snow guns, versus the mundane running which actually makes a difference to people who come but might not show up on a stat.

Unless an owner can create a monopoly, it really doesn't matter much who owns things.  According to the Coase Theorem, everything in a competitive market is developed to its highest value.

If CNL sells off 17 properties to a number of different independent owners, it will only improve the situation. 

 

 

BK

post #14 of 36

It does matter who owns the mountain.  

 

Lets start with what erodes a mountain.  

 

PROFITS:

#1 Profit:  Currently, each mountain owned by a REIT, has to provide profits - TWICE.  Ho is that, you may ask?  Well, the REIT has to provide a dividend to their investors, that is one...proided by the long term leases and then by the hopeful liquidity event when they sell.  

 

#2 Profit:  Next, Boyne is operating the mountain on a lease - and they need to provide a profit- and I have no doubt they have profit targets like every other company.  They have to do this while operating a lease that likely has it so they always have to provide a set profit to the owner.  

 

INVESTMENTS:

Lets look consider that non-corporate concern - LONG TERM viability - which is often known to us skiers as investment in infrastructure.  Once again, there are two parties, so how do they look at it?

 

Most REITs have a lifespan - so the current REIT is looking at making their dividend and only doing what is needed to prop the price up.  Very often, it is more important to show profits than the actual infrastructure. If they only plan to own it for a short term, any debt they take on will need to pass on with the sale.  In addition, it may be easier to skate by if you own it for a short term than to add more debt and reduce the profitiability aspect.  (Not sure who is responsible for investing in lifts, etc.)

For the leasee, the term will matter the most.  With a 40 year lease, investing early on may make sense, but you will probably look at your overall portfolio and invest your $$$ where you get the best return.  In the case of Maine, that may mean taking from Sugarloaf to get a better return from Sunday River - depending on what the numbers say.  I think this is even more of a situation when an area has a buildup of old infrastructure balanced with less opportunity/history of being able to make more $$$.

ADVOCACY:
Lastly - I think skiers should consider getting groups together and making a bid for their mountains.  This would allow the owners focus to be on the one mountain and its infrastructure - and to pressure the operator to do what the skiers want.  It certainly seems better than having ownership by someone that only cares about the dividend and the ability for a high resale...

 

post #15 of 36
As an outsider, I always thought having a REIT own your mountain wasn't that different from financing it with a loan. Neither one gets involved at a hands on level. Both require payments to the financiers.
post #16 of 36
Isn't it basically like pawning your mt?
While there may be no diff, I've seen quality suffer.
post #17 of 36

Having a loan you struggle to make the interest payments on will hurt quality too.

post #18 of 36
Well it's hard to know how much struggling is going on with private co's.
post #19 of 36

I think it is like pawning the mountain.

 

While the terms of the leases are nowhere to be seen - as noted -  CNL lifestyles site states clearly that they do TRIPLE NET leases on the property where they don't have an operator running it.  In the case of the ski mountains, they are leased. While Boyne may not end up with a mortgage payment, it is likely their payment to CNL is going to exceed the mortgage costs Boyne would have.  (especially when depreciation and other tax implications are weighed)

 

What Boyne traded by selling to CNL was having their capital back in their hands to focus on improvements.  Not a bad short term idea if you are a company focused on the ski industry that wants to use the $$$ to invest in improvements and have more borrowing power - but the long term outlook is likely a lower overall cashflow - speculation based on people wanting a decent return on their investment.  

 

So, what is a TRIPLE NET lease?  Here is it according to http://www.investopedia.com/terms/n/netnetnet.asp

 

----------------------
DEFINITION of 'Triple Net Lease'

A lease agreement that designates the lessee (the tenant) as being solely responsible for all of the costs relating to the asset being leased in addition to the rent fee applied under the lease. The structure of this type of lease requires the lessee to pay for net real estate taxes on the leased asset, net building insurance and net common area maintenance. The lessee has to pay the net amount of three types of costs, which how this term got its name.

This type of lease can also be referred to as a "net-net-net lease" or a "hell or high water lease".

INVESTOPEDIA EXPLAINS 'Triple Net Lease'

For example, if a property owner leases out a building to a business using a triple net lease, the tenant will be responsible for paying the building's property taxes, building insurance and the cost of any maintenance or repairs the building may require during the term of the lease. Because the tenant is covering these costs (which would otherwise be the responsibility of the property owner), the rent charged in the triple net lease is generally lower than the rent charged in a standard lease agreement.

 

-----------

 

In essence, while CNL owns the property - 100% of the cost of ownership, maintenance, improvements, etc. are on Boyne.  CNL is not going to have any of the usual ownership responsibilities - and are probably not advocating for lift changes, etc.  I would imagine toward the end of the lease, some improvements might be questioned, especially since they will probably drive your own lease cost up if they drive in more revenue.  I would think the largest investments from a lessee would be at the beginning, especially since they should have the capital in hand from the sale of the mountain to the REIT - but it depends on their strategy.  I have not seen that in the case of Sugarloaf/Sunday River.  I'm not clear if that has been the case with other mountains Boyne operates.

Boyne Resorts is private, so it isn't t clear what their real improvement plans are short of the little they officially publish on their sites.  

While the REIT may work out for a company - I still don't believe it is good for the skiers - as the double profits does apply.  I also believe we would have more ways to help and advocate if skiers owned the resorts as opposed to large REITs where individual mountains are swallowed up.
 

post #20 of 36

Lets clarify on the original post to this thread.  While these were listed as Operated by - in most cases it is a 40 year triple net lease.  This is a big difference, as you can fire an operator - and the owner could be on the hook for improvements, taxes, etc. in most cases -but with a triple net lease, it is a complete different animal.

 

CNL Ski Resort Ownership:

  • Brighton Ski Resort, Utah, managed by: Boyne USA
  • Summit-at-Snoqualmie Resort, Washington, managed by: Boyne USA
  • Cypress Mountain, British Columbia, managed by: Boyne USA
  • Loon Mountain Resort, New Hampshire, managed by: Boyne USA
  • Sugarloaf USA, Maine, managed by: Boyne USA
  • Sunday River, Maine, managed by: Boyne USA
  • Northstar-at-Tahoe Resort, California, leased by: Vail Resorts
  • Sierra-at-Tahoe Resort, California, managed by: Booth Creek Inc.
  • Mountain High Resort, California, managed by: Mountain High Resort Associates LLC
  • Crested Butte, Colorado, managed by: Triple Peaks LLC
  • Okemo, Vermont managed by: Triple Peaks LLC
  • Sunapee, New Hampshire, managed by: Triple Peaks LLC
  • Bretton Woods, New Hampshire, managed by: Celebration Associates
  • Jiminy Peak, Massachusetts, managed by: Jiminy Peak Mountain Resort, LLC

CNL Owned Mixed-Use Ski “Villages”:

  • The Village at Copper, Colorado, managed by: Intrawest
  • The Village at Mammoth, California, managed by: Intrawest
  • The Village at Blue Mountain, Ontario, managed by: Intrawest
  • The Village at Stratton, Vermont, managed by: Intrawest
  • The Village at Snowshoe, West Virginia, managed by: Intrawest
  • Whistler Creekside, British Columbia, managed by: Intrawest
  • The Village at Northstar, California, managed by: Booth Creek
post #21 of 36
I heard that the Muellers could not get a loan in 2008 during the fiscal crisis. So they pawned Okemo and Crested Butte.

Things took a big turn back when the deal for Steamboat was reneged on by American Skiing Co. in 2002 or 3. Instead they purchased Crested Butte. Crested Butte has not had the return that Steamboat ownership would have.
post #22 of 36

Well, it's taken a while, but it looks like CNL's finally managed to unload at least a couple properties: Omni Buys Bretton Woods, Mount Washington Hotel. Since the original stories from March said that CNL hoped to have its exit strategy finalized by December 31, maybe we'll be getting more news soon.

 

My fairly uninformed opinion is that this is looking like a buyer's market for ski areas... REITs are kind of falling out of favor; Vail, Peak Resorts, and Mammoth have recently spent good chunks of cash on acquisitions; a run of bad years on the west coast means the operators might have trouble buying back the deeds. And it looks like CNL's given up any hope of a massive single-transaction deal for the whole set of properties. There were rumors for a while of an impending deal for Deer Valley to buy Brighton, but that all seems to have quieted down.Any new rumors/insights/speculation?

post #23 of 36
Thread Starter 

Based on the March 2016 report to the shareholders, CNL doesn't seem in any particular hurry to find buyers for the ski resorts they still own.  They gave out a special dividend in Dec 2015.  The report also detailed what assets were sold by CNL in 2015 for a total of $1.3 billion.  Bretton Woods net was $83 million.  The largest sale was of 38 senior housing properties for a net of $489 million.

 

Ski Curbed has an article from Feb 2016 about the complications involved with selling the remaining ski resorts.

 

What's Delaying the Sale of 14 Ski Areas Worth Hundreds of Millions?

 

Sunday River in Maine (operated by Boyne Resorts)
Sugarloaf in Maine (operated by Boyne Resorts)
Loon Mountain in New Hampshire (operated by Boyne Resorts)
Cypress Mountain in BC, Canada (operated by Boyne Resorts)
Brighton in Utah (operated by Boyne Resorts)
Summit-at-Snoqualmie in Washington (operated by Boyne Resorts)

Jiminy Peak in Massachusetts (operated by Jiminy Peak Mountain Resort)

Okemo Mountain in Vermont (operated by Triple Peaks)
Mount Sunapee in New Hampshire (operated by Triple Peaks)
Crested Butte in Colorado (operated by Triple Peaks)

Northstar-at-Tahoe in California (operated by Vail Resorts)
Sierra-at-Tahoe in California (operated by Booth Creek Resorts)
Mountain High in California (operated by Mountain High Associates)
Stevens Pass in Washington (operated by Stevens Pass Mountain Resort)

post #24 of 36
Quote:
Originally Posted by marznc View Post
 

Based on the March 2016 report to the shareholders, CNL doesn't seem in any particular hurry to find buyers for the ski resorts they still own.  They gave out a special dividend in Dec 2015.  The report also detailed what assets were sold by CNL in 2015 for a total of $1.3 billion.  Bretton Woods net was $83 million.  The largest sale was of 38 senior housing properties for a net of $489 million.

 

Ski Curbed has an article from Feb 2016 about the complications involved with selling the remaining ski resorts.

 

What's Delaying the Sale of 14 Ski Areas Worth Hundreds of Millions?

 

Sunday River in Maine (operated by Boyne Resorts)
Sugarloaf in Maine (operated by Boyne Resorts)
Loon Mountain in New Hampshire (operated by Boyne Resorts)
Cypress Mountain in BC, Canada (operated by Boyne Resorts)
Brighton in Utah (operated by Boyne Resorts)
Summit-at-Snoqualmie in Washington (operated by Boyne Resorts)

Jiminy Peak in Massachusetts (operated by Jiminy Peak Mountain Resort)

Okemo Mountain in Vermont (operated by Triple Peaks)
Mount Sunapee in New Hampshire (operated by Triple Peaks)
Crested Butte in Colorado (operated by Triple Peaks)

Northstar-at-Tahoe in California (operated by Vail Resorts)
Sierra-at-Tahoe in California (operated by Booth Creek Resorts)
Mountain High in California (operated by Mountain High Associates)
Stevens Pass in Washington (operated by Stevens Pass Mountain Resort)


It has been my understanding that the State of New Hampshire owns Mount Sunapee.  

post #25 of 36
Thread Starter 
Quote:
Originally Posted by LiquidFeet View Post
 

It has been my understanding that the State of New Hampshire owns Mount Sunapee.  

According to an article from 2008, the Muellers of Triple Peaks sold Okemo, Crested Butte, and something at Sunapee to CNL for $132 million.  The lease for operating all three goes for 40 years.  Perhaps NH does not own the lifts and buildings?  The ski area is in a NH state park.

 

From the history written up on the Sunapee website:

 

"On July 1, 1998, Tim and Diane Mueller, owners of Okemo Mountain Resort in Vermont, acquired the first lease ever given by the State of New Hampshire to operate Mount Sunapee."

 

SnoCountry did an article about he Mueller family in 2015.  Sounds like the Mueller children are also actively involved in Triple Peaks. 

 

http://www.snocountry.com/news/ski-resort-news/snonews-featured-stories?view=entry&id=3001

post #26 of 36
Quote:
Originally Posted by marznc View Post
 
Quote:
Originally Posted by LiquidFeet View Post
 

It has been my understanding that the State of New Hampshire owns Mount Sunapee.  

According to an article from 2008, the Muellers of Triple Peaks sold Okemo, Crested Butte, and something at Sunapee to CNL for $132 million.  The lease for operating all three goes for 40 years.  Perhaps NH does not own the lifts and buildings?  The ski area is in a NH state park.

 

From the history written up on the Sunapee website:

 

"On July 1, 1998, Tim and Diane Mueller, owners of Okemo Mountain Resort in Vermont, acquired the first lease ever given by the State of New Hampshire to operate Mount Sunapee."

 

SnoCountry did an article about he Mueller family in 2015.  Sounds like the Mueller children are also actively involved in Triple Peaks. 

 

http://www.snocountry.com/news/ski-resort-news/snonews-featured-stories?view=entry&id=3001


An interesting question in all of this is the terrain expansion, which was allowed by the state in exchange for a big chunk of land donated to the park. Who owned that, I wonder?

post #27 of 36
Thread Starter 

CNL finally found a way to sell the remaining ski areas.  Assuming everything goes thru, ownership won't changed until some time in 2017.  Presumably won't really change much for the operators in the short run.  Bretton Woods was sold to Omni in 2015, which had been the operator since 2009.  

 

http://www.firsttracksonline.com/2016/11/03/cnl-unloads-15-ski-resorts/

 

OPERATED by Boyne
Cypress Mountain in BC, Canada

Sunday River in Maine
Sugarloaf in Maine
Loon Mountain in New Hampshire
Brighton in Utah
Summit-at-Snoqualmie in Washington

OPERATED by Triple Peaks
Okemo Mountain in Vermont 
Mount Sunapee in New Hampshire 
Crested Butte in Colorado

Jiminy Peak in Massachusetts - operated by Jiminy Peak Mountain Resort
Northstar-at-Tahoe in California - operated by Vail Resorts
Sierra-at-Tahoe in California - operated by Booth Creek Resorts
Mountain High in California - operated by Mountain High Associates
Stevens Pass in Washington - operated by Stevens Pass Mountain Resort
post #28 of 36

REITs exist for their tax benefits.  At least 90% of the profits must be distributed to the shareholders, and it goes on their tax returns, not the REIT return.  It avoids double taxation of a corporate tax plus a dividend tax on the shareholder.

 

For any of the areas on National Forest lands, or other public lands, is the contract with the operator a public document?  I think these should be available.  The owner has the long term lease with the Forest Service for the land and the rights and owns the facilities.  The operator leases the right to operate from the owner.  Or something like that.  Or, maybe because the operator's contract with the owner is a private deal, all that is available to the public is the Forest Service lease to the owner.

post #29 of 36

wondering if there will be any more max pass additions because of this deal. Max pass has a large void in tahoe , it would be great to see at least sierra at tahoe added.. thinking northstar is unlikely since its already part of epic pass. 

post #30 of 36
Thread Starter 
Quote:
Originally Posted by powderpanda View Post
 

wondering if there will be any more max pass additions because of this deal. Max pass has a large void in tahoe , it would be great to see at least sierra at tahoe added.. thinking northstar is unlikely since its already part of epic pass. 


Since there are not expected to be any changes in terms of who operates these places, I wouldn't expect there to be any impact on multi-resort reciprocal arrangements.

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