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Originally Posted by ldmjr
A resort or any other business is more than a profit center. A center of fun and entertainment like Killington develops history and makes money for its owners, but it also creates a tradition.
I knew the Smiths and the Sargents from relatively early days at Killington, having supported their second round of skier-financed borrowing, and once owned two once-transferrable lifetime passes, which I have sold since moving from New England to the mid-Atlantic.
As far as I could ever tell, Preston Smith was a man of extreme personal honesty and integrity. While he was certainly capable of political grandstanding, especially about the more extreme environmental efforts of Vermont during the 70's, he always intended Killington to be the best showcase possible for responsible development compatible with an environmentally oriented business.
Pres and his team pioneered some of the most significant innovations in the American ski industry, such as it is. Everyone knows Killington successfully promoted GLM for beginners, but how many know that Killington was the first ski area to develop comprehensive snowmaking, when nobody else believed it was needed or economically practical? Or how many know that Pres' team developed an on-line accounting system that allowed them to balance the books of S-K-I Corp at the close of business every day, permitting constant adjustment of business details to meet demand, counter weather risk, plan advertising, and otherwise help assure an understandable cash flow?
This attempt to cut off the old pass holders, who hardly represent a significant drain on the facilities at this point, would, I think, serious disappoint Pres because he set a much higher ethical standard for the company than was the norm in the industry.
I do not know the current business arrangements that existed (pre-sale) between ASC and the State of Vermont, however, the basic concept of how Killington was set up was this: The state acquired and/or reserved for use by Sherburne corporation approximately 5000 acres within the Calvin Coolidge State Forest, including the major peaks of Killington Basin (excluding Pico), all the initially available ski area, and some surrounding land (to the south and west, I believe). Sherburne corporation, at roughly the same time, purchased about 5000 acres of the adjacent, privately held land to the north and east of the state forest from Oren Bates and possibly other landowners. As a result, the combined area stretched south of route 4 and west of route 100. To the west, the property stretched to the boundary with Pico on route 4. I was never sure exactly how far south the property extended. Privately held small tracts on route 4 were presumably not included in the acquisition.
The plan for was the skiing to be on state lands (lifts, lodges, parking, trails) and for the fun (eating, drinking, apres-ski-ing, and whatever) going on in facilities on land leased or purchased from Sherburne Corp. Later, of course, Sherburn (or S-K-I) extended trail and road development into their own property on the northeast side to improve sales prospects for condo and home sales and rentals.
Sherburne Corp. operated the ski area under an indenture (lease) from the state. This provided that Sherburne and its successors in interest would be entitled to essentially permanent and uninterrupted use of the area. Every building, pole, lift or other permanent installation became immediately THE PROPERTY OF THE STATE OF VERMONT and was included in the lease back to Sherburne corp. The State was allowed to terminate the lease and take back the land and all improvements by paying a negotiated amount equal to some multiple of the average GROSS receipts for the past three years. A 10x multiplier comes to mind, but I am not at all sure that was the number. In any case, even in 1970 nobody thought the state would care to raise enough money to buy out the lease and acquire the facilities.
As the successor-in-interest to S-K-I which was the successor to Sherburne, ASC acquired all the rights and obligations of the prior companies and honored them without question. While ASC did not extend all the benefits to passholders that S-K-I had (cheap passes to other areas, store discounts, etc.), it certainly honored the actual spirit and original commitment of the passes. Of course, back then many of those passes belonged to Sherburne corp small stockholders, who controlled about 10% of the company at most.
Now, what I am about to offer as an opinion may well be WRONG because of changes in the business model of ASC since I last noticed. But, assuming the lease from the state is still valid, I offer these thoughts.
1. ASC cannot sell any part of the ski area itself that exists within the boundaries of Calvin Coolidge State Forest to a third party, because it does not own any of this land nor these facilities. It may be able to sell its lease with the State, but I expect that requires negotiation with the State regarding provisions for the transfer. Unless ASC managed to get this arrangement changed, they don't own anything in the actual ski area that is theirs to sell. (except the lease)
2. ASC can sell any of the Bates property that it still owns (most of it) and has not transferred to a third party. Much of this land is leased to third parties, but they probably have no say over the sale of the underlying land they lease. Your pass won't be good at the golf course, if it ever was...
3. Any lessee of the Coolidge Park facilities and any operator of those facilities would be bound by the original indentures issued by the state. In turn, such a successor would also be bound by liabilities accumulated by its predecessor, including passes.
4. I do not believe this liability can be escaped by simply renaming of the responsible parties. Any successor to ASC is bound by all ASC obligations to private individuals, including passholders, and that obligation is not diffused by making two parties jointly responsible for it, which is all that can be legally accomplished by this deal. Especially since those two parties are controlled by a common owner and management.
5. So, what we really have here is a conspiracy to defraud the lifetime passholders of their rights under the pass indentures and under the lease from the state. Conspiracies like this are not only commercially fraudulent, but they are also criminal and open to vigorous prosecution if anyone in government would take and interest.
6. What can you do? Obviously complain to state and federal authorities. Get together an affinity group and file a lawsuit. A modest start would be to sue the new owners, ASC, and the state, in chancery for recision of the sale based on the pre-existing intent to defraud members of the public. Alternatively, seek a temporary restraining order to block the transfer of Killington operations to the new owner because of the announced intent of the new owners to defraud the public through this transaction.
7. How many passes are we talking about? There were never that many liftetime passes. Less than 1000 in all, and some are probably defunct by now. Considering that most of these people will go ski elsewhere after being so signally screwed by the new owners and their shop/food/school/service trade lost forever, what on earth to they think they are achieving with this extremely unpopular action? Penny wise and pound foolish, as they say.
Since I am no longer a passholder, I have no standing in this matter and, in one sense, could care less. On the other hand it pains me to see the high ethical and moral standards on which Killington was founded have deteriorated to the point that the new owner/operators care so little for their most loyal supporters. A ski area is founded by idealists (the Smiths and Sargents), redeveloped in the sole service of commerce by marketers and conglomerateurs (Les Otten), and finally passes into marginal and socially irresponsible hands as the marketers model, ignorant of the sport it intended to accommodate, fails. You can see much the same pattern in the evolution of Aspen and Vail and others (on a much larger scale).
A sad day for Killington and Vermont.
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