or Connect
EpicSki › The Barking Bear Forums › On the Snow (Skiing Forums) › General Skiing Discussion › Mammoth Mountain Announces Sale of Majority Interest
New Posts  All Forums:Forum Nav:

Mammoth Mountain Announces Sale of Majority Interest

post #1 of 3
Thread Starter 
October 4, 2005

Mammoth Mountain Announces Sale of Majority Interest to Starwood Capital Group

Mammoth Mountain, CA. October 4, 2005 – Mammoth Mountain Ski Area (“Mammoth Mountain”) announced today it has signed an agreement to sell a majority interest to an affiliate of Starwood Capital Group Global, L.L.C. (“Starwood Capital”), valuing the company at $365 million. Rusty Gregory will retain his position as Chairman and CEO of Mammoth Mountain, and will continue to own a substantial stake in the company. Intrawest Corporation (NYSE: IDR; TSX: ITW) (“Intrawest”) will also maintain a minority investment. Starwood Capital also announced it has entered into a preliminary agreement with Intrawest to form a joint venture to recapitalize and develop the majority of Intrawest’s real estate holdings in and around the Mammoth Lakes region, which includes over 1,000 residential and lodging units and approximately 30,000 square feet of commercial space.

The relationship between Mammoth Mountain and Starwood Capital reinforces the company’s vision and strategy to become a major destination resort. “With their background in hotel and resort development, the Partners at Starwood Capital bring an understanding of our business environment as well as knowledge of the true potential of our resort,” said Mr. Gregory. “They are making an investment in us for the brand we have developed to-date, but they also see us poised as the next major destination resort in North America – that was an important factor in our selection of Starwood to buy the company.”

Dave McCoy, founder of Mammoth Mountain said, “It’s my expectation that Starwood Capital will continue our original vision for developing a world-class mountain community. There were many people interested in Mammoth, but cultural fit and dedication to maintaining a quality community was very important to me.” The leadership of the company will remain intact along with the key components that have been a part of Mammoth Mountain’s success such as financial discipline and operational excellence. Mammoth Mountain will continue its long-standing partnership with the community to achieve common resort goals.

Starwood Capital is led by Barry Sternlicht, who for nearly 10 years until May of this year served as Chairman of Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) (“Starwood Hotels”) and was CEO of Starwood Hotels until October of 2004. Under Mr. Sternlicht’s leadership, Starwood Hotels grew from an $8 million enterprise into a company enjoying a market value in excess of $12.5 billion today. Mr. Sternlicht created both the “W” and the St. Regis brands and introduced the Heavenly line of products into Westin Hotels.

He has been an innovator in creating brand identity and brand value in the hospitality business. Through Starwood Capital he has also been one of the leading real estate private equity investors focused on creating and growing real estate related business enterprises. "We are excited about the opportunity to work with Mammoth on their transformation into a world-class resort destination with a real estate component to match one of the continent's finest mountains,” said Mr. Sternlicht.

“Mammoth Mountain provides a wonderful opportunity to take a well managed company to the next level. The mountain is one of North America’s top physical resort assets from a terrain, average snowfall and beauty aspect, and our investment comes on the heels of $150 million of capital investment in the mountain over the past ten years,” said Marc Perrin, Managing Director of Starwood Capital. “We have a proven track record of building brands and growing businesses such as Mammoth into industry leading companies.”

A secondary strategic outcome of this deal is the preliminary agreement between Starwood and Intrawest for Starwood to recapitalize, in a joint venture, Intrawest’s real estate investments in Mammoth. Starwood will become the single entity responsible for most of the key real estate development in and around the Mammoth Lakes region. This creates a single point of influence on the bed-base development and amenities that are crucial to developing a destination resort.

Houlihan Lokey Howard & Zukin, an international investment bank, served as exclusive financial advisor to Mammoth Mountain, running a competitive auction process and structuring and negotiating the transaction. Houlihan Lokey has maintained over a 15-year relationship with Mammoth and its shareholders. The transaction is expected to close within 90 days pending the customary closing conditions.

Mammoth Mountain Ski Area is the leading four-season mountain resort in California. With over 1.5 million skier visits, Mammoth Mountain currently is the second most frequented resort in the United States. The company owns and operates a variety of resort businesses including recreation, hospitality, food and beverage and retail. Specific businesses operated by Mammoth Mountain include Mammoth Mountain Ski Area, June Mountain, Tamarack Lodge and Resort, Mammoth Snowmobile Adventures, Mammoth Mountain Bike Park, Mammoth Mountain Inn and also operates Juniper Springs Properties, the Village at Mammoth, and Sierra Star Golf Club in Mammoth Lakes, California. For more information on Mammoth Mountain, visit www.mammothmountain.com or call 800.MAMMOTH.

Starwood Capital Group Global, L.L.C., which is headquartered in Greenwich, Connecticut with offices (or affiliate offices) in San Francisco, Washington, D.C., Atlanta, London, Luxembourg and Tokyo, has been an innovative leader in real estate investments since its inception in 1991. Its investors include some of the largest state and corporate pension funds, endowments and high-net worth families from around the world. Currently, Starwood Capital manages a real estate portfolio valued at over $10 billion. In the past fifteen years, Starwood Capital has closed or advised on real estate transactions totaling in excess of $30 billion and has acquired equity interests in hotels, golf and leisure-related properties, residential land, multifamily and condominium units, senior housing, office, retail and industrial space.

Starwood Capital and its affiliates have successfully executed an investment strategy that includes building business enterprises around core real estate portfolios, including; the recapitalization, reorganization and expansion in 1995 of a real estate investment trust to become the company that is today known as Starwood Hotels; the acquisition in 2003, in partnership with affiliates of Goldman Sachs & Co., of National Golf Properties/American Golf Corporation, the largest owner/operators of golf courses and related facilities in the U.S.; and contributing assets to create the company which is today known as iStar Financial (NYSE: SFI), one of the leading publicly traded finance companies specializing in commercial real estate mortgage, mezzanine and net lease financing with a current market capitalization in excess of $4.5 billion. For more information regarding Starwood Capital, see www.starwoodcapital.com.

Intrawest Corporation (IDR:NYSE; ITW:TSX) is a world leader in destination resorts and adventure travel. The company has interests in 10 resorts at North America’s most popular mountain destinations, including Whistler Blackcomb, a host venue for the 2010 Winter Olympic and Paralympic Games. Intrawest owns Canadian Mountain Holidays, the largest heli-skiing operation in the world, and an interest in Abercrombie & Kent, the world leader in luxury adventure travel. The Intrawest network also includes Sandestin Golf and Beach Resort in Florida and Club Intrawest – a private resort club with nine locations throughout North America. Intrawest develops real estate at its resorts and at other locations across North America and in Europe. Intrawest is headquartered in Vancouver, British Columbia. For more information, visit www.intrawest.com.
post #2 of 3

Vail West? Noooooooooooooooo!!!!!!!

LA Times, 10/6

Bracing for Mammoth Change

Sale of ski area causes excitement and anxiety in the mountain town. Investment group plans to build luxury hotels and glitzy restaurants.

By Louis Sahagun
Times Staff Writer

October 6, 2005

MAMMOTH LAKES, Calif. — The day townspeople learned that the Mammoth Mountain Ski Area had been sold to investors, resort officials assured workers that they still had their jobs, civic leaders warned of difficult choices ahead and real estate agents were overwhelmed with calls from prospective home buyers.

From one end of this 4-square-mile eastern Sierra town to the other, residents reacted with excitement and anxiety to the news: Dave McCoy — the ski resort's beloved 90-year-old founder, a pioneer of California's ski industry — was selling the enterprise to a private investment firm with plans to build luxury hotels and glitzy restaurants.

Facing more than 600 employees who gathered in a ski area auditorium early Wednesday morning, ski area chief executive Rusty Gregory said, "I know your hearts are full of trepidation…. But we have the right direction, and we are poised for greatness."

He pointed out that although the new owners have ambitious development plans and expect strong profits for their $365-million investment, the local leadership of the ski area would remain intact, along with its decades-long partnership with the adjacent community it spawned.

Ski area lift mechanic Robert Williams, who serves on the Mammoth Lakes volunteer fire department, left the meeting feeling "a whole lot more comfortable" about job security. Still, he remains concerned about the future of the town, where half the population of 7,700 people are employed on the mountain.

"With everything building up instead of out" in a town already coping with traffic, inadequate parking and little affordable housing, "things are going to get interesting," he said.

Mayor Rick Wood put it another way during a Lions Club luncheon Wednesday attended by two dozen business owners and civic leaders.

"We're getting ready for some serious changes that will affect the character of our community — some for better, some for worse," he said. Those changes, he added, "are coming fast."

Though the timing and terms of the sale weren't publicly known until Wednesday, most folks in town figured something would happen soon. McCoy, who founded the resort in 1937, had announced in February that he planned to sell the ski area. Industry analysts immediately began predicting a sale worth at least $200 million — well below the final price.

"We're a little community that has caught the attention of the investment banking world," Wood said. "It's a trying time for elected leaders who will have to make sure their decisions don't ruin it."

Wood said the community was trying to attach community benefits to new development. A week ago, the town, which has an annual operating budget of about $12 million, tripled its development impact fees.

Separately, Mammoth Lakes Town Council members are considering proposals to allow higher densities and some building permits in exchange for civic amenities, such as an ice rink, road improvements, parking facilities, shuttle services and affordable housing. The average home price is $1 million.

Mammoth Lakes' population soars to 35,000 on busy winter weekends. Most of the visitors make the five-hour drive from Southern California. The town's officials predict that it could accommodate twice that number.

Mammoth Lakes restaurant manager Terry Whitman is not waiting to find out. He plans to find another job 50 miles south, in the Owens Valley community of Bishop.

Standing just a few hundred feet away from a construction site where crews were erecting a $140-million condominium hotel, he sighed and said, "Fancy hotels, traffic lights, gentrified neighborhoods, people of means dictating local politics, cranes dangling overhead, steel and glass — that's not my idea of a quaint mountain village, but it's inevitable.

"So I've devised an exit strategy," he said. "I'll be gone before it all becomes Orange County."

John Walter, a spokesman for Advocates of Mammoth, a group dedicated to ensuring that development meets local laws, is slightly more optimistic. But he expressed mixed feelings about the prospects for a town with only five traffic lights."At some point, it won't be attractive for people to come here," he said. "They won't want to come all this way to shop boutique stores and sit in traffic jams."

The ski area, which is perched at 7,900 feet, is being sold to Starwood Capital Group, a private investment firm led by hotelier Barry S. Sternlicht. Until May he served as chairman of Starwood Hotels & Resorts Worldwide Inc., one of the largest hotel chains in the world. Sternlicht earned a reputation for lavishing his hotel acquisitions with Ralph Lauren-inspired decor.

The deal for the ski area 300 miles north of Los Angeles is the largest ski resort sale in U.S. history, industry analysts said. Starwood group also plans to develop about 60 acres around Mammoth Lakes with Canadian resort operator Intrawest Corp. and is expected to buy additional lots throughout the region.

Marc Perrin, managing director of the Starwood group, said local residents should expect to see significant changes in three to five years.

That kind of talk got phones all over town jangling.

"Our phones started ringing at 7 a.m.," said Realtor Stacy Bardfield, a close friend of McCoy. "They're mostly people calling to say, 'I'm ready to buy, find me the best deal.' "

"Until recently, we were regarded as the Sears & Roebuck of ski resorts," she said. "This is a big lurch forward…. Hang on tight. Mammoth Lakes' roller coaster ride has just begun."
post #3 of 3
Intrawest did the same at Whistler as well, selling off most of their interests. It looks like a trend for Intrawest, to divest itself of the daily operations of ski resorts and concentrate on the more lucrative real development end of things.
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: General Skiing Discussion
EpicSki › The Barking Bear Forums › On the Snow (Skiing Forums) › General Skiing Discussion › Mammoth Mountain Announces Sale of Majority Interest