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Saddleback 2015-16 Season in Jeopardy

post #1 of 114
Thread Starter 



RANGELEY (WGME) -- Saddleback, Maine announced that it may not open for the 2015-2016 ski season unless it can secure $3 million in financing to purchase a new four-person chairlift.

The company says they need the money to replace 51-year-old chair lift, the main access from the lodge to the top of the mountain.

"In order for Saddleback to be sustainable for the long-term, we've decided the lift must be replaced," said owner Mark Berry. "For the last several months, we've been actively seeking the necessary financing to replace the chairlift, however time is running out. We only have a few weeks to make this work. In order to open this winter, we need to order the new lift by early August."
post #2 of 114

Sad news there.  The Berry family has invested a tremendous amount into the mountain and it would be a blow to Rangeley.  Difficult to see them securing the financing needed for the lift given the economics of the mountain.  Fingers crossed that it works out for them.


Looks like they have suspended season pass sales.


The thing I like the most about Saddleback is that it is like skiing at a small family owned mountain that is much bigger.


If the season is missed it will be much harder to get back on their feet and resume operations.

post #3 of 114
Oh no. My in laws live up there and already have one season pass.

Someone pls buy the mountain and expand it just enough to breakeven on ops and make a little on condos.

Or maybe leave the slow double and make it a MRG situation.

It's a special place.
post #4 of 114

Do you suppose Saddleback's financial troubles stem mostly due to its beautiful, but remote location?  Hard to draw sufficient customers?  No big money-making real estate village at base?  It reminds me a little of Wildcat in that respect.  Excellent terrain, gorgeous scenery, pristine environment, yet both struggle to make ends meet by "only" offering a wonderful ski product?  :(

post #5 of 114

it's not that remote.  same distance from anywhere as Sugarloaf.  2.5 hrs from Portland.  4 from Boston.  basically, same as Jay.


Saddleback has similar real estate to Sugarloaf and has a nice base lodge.  not a village like the 'Loaf but the loaf village is a *little* overrated in my opinion.  it's more like a concrete firepit with reggae music and beers (all good, love it) but let's not get carried away. 


Saddleback does have a town, though, Rangeley, and a pristine huge, deep, clear lake (Rangeley lake).


i really don't know what the issue is.  

post #6 of 114

I wonder if Sugarloaf ever thought of buying Saddleback?  A ticket combining both would be a better draw for destination visits, not that you can't visit both now during one trip.

post #7 of 114
Sugarloaf itself is for sale. Maybe a big buyer can buy both
post #8 of 114

Hate to see this in the press, and hope it gets "fixed' soon. Had some thoughts. 


The perception is that SB is a good half hour farther away, at the least, than SL, if you're coming from the south. Arguing about actual drive time to SB, SR, and SL is like a second sport among New Englanders. I may be one of the few who's actually owned property and had season passes at all three areas. The actual drive time's not the real issue, IMO, but i have a lot of friends from the Portland area who would swear that SB is at least a 45 minute further drive, an it absolutely is not. These same folks think it's an easy 45 minutes from downtown Farmington to their place at Sugarloaf….and it's not. 


SB is a real gem, but it's been run on a shoestring for much of it's history. With all due respect, Jon, SB and SL just don't match up as ski destinations, most of the year. Rangeley is neat little town, and a tremendous summer destination. The lake is just spectacular. There is no town at Sugarloaf, and try as they might, it's not a four season destination. Great {and really challenging} golf course, decent hiking, some nice streams, more mountain biking than in the past…..but it's not to be confused with a real summer town. It's deserted. To ski Saddleback, you need to be Ok with a lot of flat light, and real cold. I have never skied there when it wasn't probably 10-15 degrees colder than Sugarloaf. Doesn't bother me, but be prepared.


SB has one of the nicest base lodge set-ups in NE. Great layout, really good food, fun bar upstairs for a beer after skiing. I always rate it an A+. It works. The place has a real sense of community, both among the skiers and the workers. Nice. The terrain is a mix. A lot of classic old school NE cruisers, and some really need stuff in the woods. It's not like SL, with acres and acres of buffed wide open steep cruisers.


And believe it or not, that base area "village", and the resort subtle system is a huge draw and plus to SL. It's not Vail Village, but people sure seem to like it. Coffee, sandwich shops, three pretty good restaurants for dinner. Some retail. People come there with the thought that they'll park their car, and start it again only when they leave. That may not be the case, at all, but that's the perception. 


Sadly, this is kind of a case study, I'm afraid, on the realities of the industry, in Northern NE. There are only so many skier days to be "had" in Maine. Whether it's fair or not, SB has always struggled, regardless of how great the product may have been. My dad was a fairly small investor in SB, in the late 60's, and held his breath until he could get out. He admitted that he was swayed by the lake…..which is about a 20 minute drive from the ski area. Should have listened to the wallet. 


It was bought some years ago by the Berry family, who by all accounts have been wonderful to the ski area and the town. At the same time, it's a good thing that they apparently have a lot of resources, as they have likely lost a bundle on this one. The area had very aging, but serviceable lifts when they bought it. There is VERY limited real estate development potential….primarily driven by demand. If they don't open this season, I hate to think about values, etc. It's not like they have thrown up 60 condos a summer to add to the bottom line. No hotel development, no retail, no restaurants to bleed for rent and $$. The town is really pretty, and the ski area doesn't really get a dime from it. 


It's just the sad story of the Northern NE ski area. Without the Visa deal, Burke would be in the same place, unless yet another BMA trustee bought the area. Jay Peak probably would be, too. Smugglers struggles every year, and on and on. 


When these older areas are faced with what are essentially ginormous capital expenditures it can be crippling. In this case, it seems pretty clear that the Berry's have been trying to sell for three years or so. My hunch is that it might be that they are hoping for some extra help with this, perhaps through the state. If they don't see the $3Mil investment as adding up to $3Mil on the price {or something close}, they may not want to do it. Might not want to guarantee it with other assets. Could be dozens of things.


My hunch is also that it will not sit idle. That would decimate it's value, and small as the Rangeley area is, it would be damaging to a very fragile economy up there. Big loss. 


Fingers crossed that a solution unfolds.


Long term, who knows. There's a LOT at play with the CNL/Boyne situation at all of the Boyne operated properties owned by the CNL REIT. I've heard so many scenarios on how that unfolds that my head is spinning. Particularly at SL. And some actually involve SB. 


It's nowhere near as simple as "Sugarloaf is for sale".  CNL has been trying to "flip" their entire Lifestyles Resort portfolio for a year. Evidently no other REITs are buyers, no PE firms, and taking it public is an absolute non starter. The target date for the REIT to end is 12/31/15, so there's some pressure to get it done. They can hold the properties for a bit longer than that, but to much. 


Boyne holds 40 year leases to operate their former areas, and they are rumored to have a right to match any other offers on their former holdings as well. Basically, my REIT friends tell me that Boyne likely set this up to buy back their holdings at a fraction of the price they sold. The REIT's strategy is pretty simple: move on. The devil will be in the details. As in do they have to buy them all back. Do they keep them all? Do they want them all? It's very interesting. It's particularly interesting in Maine with SL, SR, and now this development with SB. 


Way too much to get into here. Just should be interesting to watch. 


SB is a great place. Fingers crossed for their future. 

post #9 of 114
A lot of good and accurate insights there. Very much spot on.

I would only quibble with the following:

SB is maybe 15 mins farther from Farmington than SL. I don't think it's any colder. Not sure why it would be. As for light, SL faces due north, which is as dark as it gets. i likd the village but just don't want westerners thinking its vail or whistler. I actually like it way better than the brand new Jay village, if that's what they are calling it. The Swig bar at SB is comparable to the Bag but Rack at SL is awesome. SL is very cool, no doubt. Bigger, mainly, with more options.

Btw, There is tons of real estate potential at SB. The Berrys own it all, free and clear (sort of). Both sides of the hill, all the way to SB lake which is cool too. With roads and utilities. The place could be huge for RE. I think what you are saying is demand is limited. Sure, I would agree given the lift situation. SL has tons of real estate. The market isn't that much more expansive over there because it's 15 minutes closer.

We're on the same page. Cool place with potential, just need capital, vision and enthusiasm.
post #10 of 114

Closer to a half hour further-driven to both lots.  Makes it an hour longer for a day trip which weighs on decision making for where to go.  Saddleback and Sugarloaf are quite different mountains and skiers choose them for quite different reasons.


Saddleback has been living on the edge for a while.  The old double does need to be replaced.  I am sure the events at Sugarloaf weighed in to the decision to not open with it.


Guessing the play here is for state support for the loan.  Hard to see that happening.

post #11 of 114

So does it need to be replaced so bad that the only other option is not to open? Seems like some facts are missing and it sort of last minute.

post #12 of 114
Thread Starter 
Originally Posted by Bill Miles View Post

So does it need to be replaced so bad that the only other option is not to open? Seems like some facts are missing and it sort of last minute.

Yeah, it did leave me wondering, "What changed?" Muleski may have nailed it with the perception thing related to last year's accident at the Loaf. Maybe - this is total unsubstantiated speculation - they had a really thorough inspection done and found some stuff they didn't like.
post #13 of 114

More in the speculation area, but perhaps given the accident at SL and the age of the lift, the insurers wouldn't issue insurance unless they replace the lift.



post #14 of 114
Originally Posted by habacomike View Post

More in the speculation area, but perhaps given the accident at SL and the age of the lift, the insurers wouldn't issue insurance unless they replace the lift.



If that was the case a lot of other resorts would be in big trouble.

post #15 of 114
I think the lift is safe. The mtn just needs capital to invest in a higher capacity lift to be economically viable.

One alternative could be to have no snowmaking or grooming to cut costs, keep running the double and hope it snows.
post #16 of 114

Might the State step in with a loan or some incentive?

Vermont had a program for ski areas to update their snowmaking to save energy and water. They gave rebates for old guns if they replaced with new high efficiency guns. @mdf took a photo of one at Killington.

post #17 of 114
Originally Posted by epic View Post

If that was the case a lot of other resorts would be in big trouble.

It was just speculation.  That being said, the reason Jackson replaced the tram was over insurance concerns.



post #18 of 114

I wouldn't dismiss the insurance issue entirely, but I think it might be more of the case of the owners thinking that proactively replacing a 51 year old lift that runs in that weather might make sense. It would certainly make more sense than sinking a substantial amount of maintenance into it. I also hear the discussion that it will help with uphill capacity, shorten lines, etc. The owners have done a really great job with the overall product, and increased skier days almost ten fold since they bought it {granted off a terribly low number…15K skiers}, and it's time.


My take on it, having had a bit of time to ponder things, and a couple of conversations is that the Berry family has been advised that selling the area {it's been on the market for three years} might be more doable if the new lift is in, rather than the new owner needing to take it on right away. Of course, they're looking at a $3 Million dollar ticket. They could easily write the check, but will a $3M expense yield $3M in price?  


The hangup might be this. Any lender knows that the area is for sale, and presumably there is concern about whether the ski area can service the debt under a new ownership scenario. The Berry family bought the area for $7.5 million, and has evidently put over $40 million into it. Yikes. They bought it with 8000 cares of land. It's on the market with 400 acres, and has gone nowhere at a $12 million asking price. 


So, the potential lenders are likely looking for the Berry's to guarantee a loan. I would assume that their advisors are saying "No Way."  They want to move on, no matter how much they love the state of Maine, and that part of the state…..which is undeniable. These are good people. The GM is a good guy. 


Rangeley is remote, and whatever economy there is is based almost exclusively around tourism and recreation {very busy in the summer…spectacular}. I was told that the general area has something like 1500 year round residents, and that with SB's growth,  something like 25% of them work at SB. Wow.


That press release, I assume, had some strategy and posturing behind it. Clearly going to get a number of folks worked up and nervous. Is it beyond the realm of possibility of some State help?  I guess one can't completely shut it out as an option, but I'd doubt the state will come up with any funding. Without being at the table, we don't know what lenders are asking for, nor what the Berry's want. I'm thinking the press release may have been intended to move this out of neutral, and it may well do that.


I can't imagine the place no opening this winter. The Berry's are smart people, as is their team. A ski area that lies idle devalues VERY quickly. You have a lot of people who own property there who are pretty well connected in the small state of Maine. I would bet that there will be a lot of phone calls made urging people to get a solution in place. Perhaps there will be a partial guarantee of some sort forthcoming from the state.


Who knows? So many potential avenues. 


Back to the insurance issue. The market is such that when all of the layers of coverage is peeled back, the ultimate risk is held by a small handful of insurers. No doubt, the two issues at Sugarloaf raised concern. There are dozens of lifts operating in the East that are older than the King Pine lift, which had the rollback. Sugarloaf is spending a small fortune to assure that all of their lifts are safe, and even has a website to inform the public of their work:




I suspect that there are inspections and deferred maintenance being undertaken like never before, all over the country. This issue of aging lifts is a big one, not so much in terms of safety, IMO, but in the hard dollar cost to replace them in an industry that runs on paper thin margins.  It's a real mess. 


Nobody can tell me what happened to SB's EB-5 Visa plans. Seemed like they, and the government, were all over that as a possible funding route a couple of years ago. Perhaps the mess in VT's NEK caused everybody to apply the brakes. I have no idea, but would love to hear anybody else's thoughts there. 


I'm confident that they'll be in business with a new lift, this winter. After that, who knows. I think a lot is up in the air with Maine's three biggest areas.

post #19 of 114

I think it's time for someone who wants to buy the mountain to come to the table with an offer.


anyone on this board wealthy enough to consider such?  it's a great place....

post #20 of 114
I wonder how many condos are up there. At least 50 I would think. If the condo associations did a special assessment of $30k that's half of the $3m.

Just an idea. Could be structured as a loan
post #21 of 114
Because everyone has $30,000 sitting around unused....
post #22 of 114
Not implying that at all. But compared to the potential impairment to the value of their condos, it might be a sound financial decision. I'm not a homeowner up there, neither are my in-laws. Wasn't asking for condo owners to bail out the mountain with the gobs of extra cash spilling out of their fur covered vaults. Just thinking of ideas...
post #23 of 114

This entire ordeal came out of left field. The cynic in me wonders if this is a PR ploy to pressure the banks to give them a loan.

post #24 of 114
Condos at Ascutney went down 1/3 when they closed. The town is looking to turn it into backcountry skiing and summer stuff now that a law suit is over.

The place was in and out of trouble many times. Back in the 80's a wall st guy bought it out of bankruptcy to make a go of it as a more upscale place.
Grano's biggest disaster was the Vermont ski resort limited partnership. Grano was the project's chief executive until 1986 and one of four shareholders in Summit Ventures, the resort's general partner. Grano envisioned turning a shabby, family-oriented ski area called Mt. Ascutney into a ritzy Vail-caliber resort for Wall Street's upper crust. In 1983, he recruited as investors such Wall Street bigwigs as Merrill Lynch CEO Daniel P. Tully. In 1990, Mt. Ascutney filed for bankruptcy, one of the biggest in the state's history. Industry experts say the resort was doomed by a business plan based on ludicrously optimistic assumptions. Grano and the other managers of the resort were criticized by accountants working for the bankruptcy court for overspending on jets, limousines, and travel and entertainment expenses. "The operation was poorly managed and what management was done was at an exorbitant cost," said a report by the accounting firm, Gallagher, Flynn & Co.
post #25 of 114

Time and again we learn that being able to buy a resort and being able to afford running a resort are two different things.

post #26 of 114

Too bad that a ski lift company isn't stepping up to finance the lift installation.


I guess part of getting financial backing is answering the question: What happens if Saddleback goes broke after installation of a new lift? What would a nearly new lift be worth in a sale of assets?

post #27 of 114
Well Ascutney purchased a high speed quad in 2000 for $ 2.4 million and sold it in 2010 to Crottched Mt, NH for $1.35 million. Burke passd on it. Nott sure of it's actual highspeedness but it was detachable.

From the law suit between owner parties recently settled, the gory details of financing a chairlift that likely contributed to the downfall. Though mismanagement by the owners according to ex workers, was significant.
The first ripples of the dispute began in 2000 when Snowdance LLC became interested in purchasing a high-speed quad chairlift for the ski resort. Snowdance LLC principal Steven Plausteiner negotiated the purchase of a new chairlift from a manufacturer known as Garaventa
CTEC for the price of $2.4 million dollars. Snowdance LLC financed the purchase with a $1.4 million dollar secured loan from CIT Group and a $1 million dollar unsecured loan from minority Snowdance investor Dan Purjes.
post #28 of 114

From Saddleback's Facebook page the yesterday:


“The economic impact on our staff and the community is not lost on us. We’ve worked very hard and had several meetings with financial institutions and potential buyers. While I am not able to announce a decision today, I believe we will have a yes or a no answer by mid next week – and that’s progress from where we were two weeks ago. A final decision is needed in the next few business days to ensure the lift can be purchased and installed in time,”

post #29 of 114
post #30 of 114
Originally Posted by salmonsoup View Post

Read this tonight.   http://www.newenglandskiindustry.com/viewstory.php?storyid=306

Pretty wide range of scenarios being considered.



According to the [Facebook] post, three sale scenarios are being explored:
"1. We have a buyer negotiating to buy the resort and install a quad lift this season.
"2. We have a buyer negotiating to buy the resort; remain closed for the ski season and install a lift next summer. 
"3. We have two potential buyers looking at operating status quo for the winter. Improvements would begin next summer. "

In addition, a potential lease is being explored to continue operations in 2015-16. Possible interested parties in a lease could include the homeowners associations and the Saddleback Ski Club.


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