Intrawest heads for auction block

VANCOUVER, B.C. – Much speculation has gone on in the last two weeks since creditors of Fortress, the company that bought ski area operator Intrawest in 2006, announced an auction will be held on Feb. 19.

That’s an eyebrow-raising date, because it’s right in the middle of the Olympics, and Intrawest’s marquee property is Whistler-Blackcomb, where the Olympics will be held. There are suspicions about motives.

At stake are portions of the $1.5 billion debt Fortress owes its creditors, which include JP Morgan, Lehman Brothers and Davidson Kempner. The ski areas themselves are not being sold — although, of course, they’re only one step removed.

Intrawest missed a $524 million installment on the loan that was due Oct. 23. A 60-day extension was possible, but Intrawest – this is Intrawest Holdings, not Intrawest itself, although the distinction is thin – was unable to reduce its debt to the specified level.

Could Vail Resorts end up being buying the debt and eventually gaining control of Whistler-Blackcomb? That idea was kicked about by both theVail DailyandWhistler’s Pique Newsmagazinethis past week. Vail, notesPique’s Bob Barnett, has expertise in both recreational real estate and mountain vacation markets, and has enough cash that it can wait for those markets to rebound.

Another possibility is that Intrawest could file for Chapter 11 bankruptcy protection under the U.S. Bankruptcy Code. This would shield Intrawest from creditors and allow it time to reorganize. Vail Resorts, then called Vail Associates, had to file for bankruptcy protection, even though the ski areas the company then owned – Vail and Beaver Creek – were very profitable. But the owner, George Gillett, had over-leveraged himself in a buying spree of TV stations.

Kai Li, a professor of finance at the University of British Columbia, toldPique that Intrawest should file for bankruptcy and thus bypass an auction. But she also said that the Feb. 19 auction is unlikely because the current creditors likely would not benefit. “Given the current economic condition, auction of the assets at a fire sale price does not bode any good,” Li said. “So the likelihood of an auction is extremely low due to lack of buyers and bad prices for the (lenders).”

Barnett, the newspaper publisher, noted that buyers might be hard to find. “There are a lot of things that look more promising than the ski and recreational real estate businesses that have been built around aging North American baby boomers.”

He also notes that breaking up Intrawest and selling off individual resorts may not be as easy as it sounds. Some make money, and some don’t. Some have real estate, and some don’t.

“And the buyer(s) need to decide if they are in the resort operation business or the real estate development business, something investors could never really figure out about Intrawest,” he wrote.

Of course, Vail Resorts has interest in both.

Aspen raises the bar for efficiency

ASPEN – Aspen and Pitkin County have set the bar high for energy-efficient building. But the rest of the world has been catching up.

The two governments several years ago adopted an energy code that was more stringent than the generally accepted building codes of the time. But the latest iteration of the International Building Code, adopted in September 2008, had leap-frogged past the formerly cutting-edge code in Aspen.

So, Aspen last fall raised its own bar again, and Pitkin County has followed suit.

Tony Fusaro, chief building official for Pitkin County, told county commissioners that adoption of the new code will likely give local governments a better shot at grants coming out of the federal stimulus package for energy efficiency.

Aspen and Pitkin County have also expanded their Renewable Energy Mitigation Program – first applied to houses in 2000 – to commercial buildings. The original program required homes of 5,000 square feet or more to offset a portion of their fossil fuel consumption or pay a mitigation fee. Outdoor energy uses, such as heating swimming pools and driveways, also triggered payments – unless an on-site renewable energy generation was installed.

Some $10 million in in-lieu fees have been collected and used for energy efficiency and renewable energy devices, such as at the local recreation center.

The Aspen Times explains that an 800-square-foot heated driveway would, unless mitigated by renewable energy, be assessed a fee of nearly $30,000.

A commercial building, such as a hotel, that installs a 700-square-foot heated swimming pool, an 80-square-foot heated spa, and a 1,200-square-foot heated driveway would be assessed $223,000, unless mitigation measures were adopted.

Whistler unveils hydrogen fuel fleet

WHISTLER, B.C. – They’re calling it the largest zero-emissions bus fleet in the world, and that’s true if you don’t look very far.

The 20 hydrogen-fueled buses that will be operating between Whistler and Vancouver for the Olympics will spew no dark, smelly fumes. Just a bit of water will come from tail pipes, and supposedly clean enough you could wet your whistle with it.

The hydrogen, though, will be coming from Quebec, at least initially, which certainly adds to the carbon footprint. Ultimately, hydrogen fuel will be created at a plant in North Vancouver, using wastes from current chemical processing.

Actually, hydrogen can be created a great many ways, as it results from the breaking up of water. The energy used to achieve that can come from wind, landfill gas or biomass. As a practical matter, though, natural gas seems to be one of the most common base fuels.

Being among the first that are hydrogen fueled, these buses will be particularly expensive, explainsPique Newsmagazine. The provincial and federal governments have invested $90 million in the buses, fueling stations and operating costs for the next five years, with the municipal government in Whistler ponying up another chunk of change. The buses are expected to operate for 20 years.

In a lengthy story about hydrogen,Pique explains that hydrogen fueling will likely not gain broad use until costs drop and a fueling infrastructure is in place. That is starting to happen. Germany plans to have 1,000 fueling stations in place by 2015. And California is planning an outlay for 46 stations.

Ski resorts report strong seasons

ASPEN – Relatively speaking, Aspen has done well this year in terms of visitors. Traffic at the local airport was up by more than 25 percent in December, skier visits at the four ski areas at Aspen and Snowmass were up 2.5 to 5 percent during the all-important Christmas holidays, and bookings look strong through Presidents’ weekend.

What hasn’t been up was the snowfall. It’s an El Niño year, and that almost always means subpar snow for the northern half of Colorado. This year is no exception. Powder days have been sparse.

At a recent community meeting covered byThe Aspen Times, condo-hotel manager Warren Klug reported that he had admonished employees to keep complaints about the lack of powder to themselves. “I didn’t hear a single complaint from our guests,” he said, as they loved the blue skies and corduroy.

March remains the big question mark. Last year, Aspen emptied out during the most important economic month of the winter. After reporting the many bright spots this season, reservations guru Bill Tomcich at the recent meeting conceded some apprehension. “There are a lot of rooms that can be filled in late February and early March,” he said.

In Telluride, meanwhile, town officials have reported a better year for 2009 than they had feared, thanks partly to a late pickup in real estate sales, reportsThe Telluride Watch. But town manager Frank Bell noted that any increases this year will be compared against 2009, which was a “really crummy year.”

Added Bell: “Saying things are 10 percent better is like being the best dancer in Laredo, Texas. That isn’t a real milestone.”

In-bounds slide claims Idaho skier

KETCHUM, Idaho – If Tim Michael had any enemies, they certainly didn’t show up in theIdaho Mountain Express.

“In all our many adventures throughout those 54 years, I don’t ever remember having any other feeling except that this was a kind, generous and genuine person,” said his brother, Sean Michael. “He liked the simple things that life offered. A good hike, a good ski run, a good friend.”

“I didn’t know Tim well,” wrote another blogger. “I just always saw him with a smile on that kind face.”

Tim Michael was killed in an avalanche on a ski trail on Bald Mountain, Sun Valley’s main ski area. The avalanche was 2 to 3 feet deep and 40 feet wide. He was buried amid a dense stand of small trees under 5 to 6 feet of avalanche debris.The Express reports that local authorities attributed his death to “traumatic asphyxiation.”

“He didn’t duck a rope,” said Janet Kellam, the avalanche center director in Ketchum. “Witnesses saw him in the center of the slope with the avalanche coming down from above.”

He had lived in Ketchum for 35 years, living in a trailer for many years, and had a house-painting business. The portrait drawn was of a man devoted to his family and to the simple pleasures of being outdoors, whether backcountry skiing, kayaking or camping along the Oregon coast.  

– Allen Best