April 13, 1996 in Nation/World

A Deal On The Mount Mt. Spokane Skiing Corp. Agrees To Run Area Under Study Group’s Rules

Eric Torbenson Staff writer
 

In a surprising turnaround, Mt. Spokane Skiing Corp. has agreed to run Mt. Spokane Ski Area for the next 20 years under most of the conditions set by a Spokane group that wanted to oust the company.

The move means the popular ski hill apparently will remain under the same ownership, but will undergo major changes in how it’s run.

The Washington State Parks and Recreation Commission had agreed to terms with the Mount Spokane 2000 Study Group, made up of Spokane civic and business leaders, to have it run the mountain.

However, the ski company’s contract with the state gave it the right to match any competing offer for the concession to run the ski hill.

After legal attempts to stop the state from negotiating with the study group failed, Gregg Sowder, president of the family owned ski company, decided to match the bid this week.

If the state approves the offer, which varies slightly from the previously approved Mount Spokane 2000 plan, Sowder would make less money running the ski hill and would be forced into numerous costly improvements and new operating procedures.

“Myself, my brother, my sister, and my whole family are excited to be staying,” Sowder said Friday. After 21 years of running the hill, leaving the work done there was something he and his employees did not relish.

By exercising his right of first refusal on the new concession, Sowder in essence agreed to run the ski area on the study group’s rules.

It’s far from a done deal for the ski company, however. The parks commission has to sort through Sowder’s contract and rule on the following issues:

The ski company made minor changes in the contract, mostly to allow the company to pay its investors and keep some cash instead of plowing it all back into the ski hill. That may mean Sowder isn’t agreeing to the terms of the group’s deal with the state.

The commission has a right to review Sowder’s performance in the previous 20-year concession, said Ted Stiles, a Spokane attorney and spokesman for the study group. It may find that Sowder didn’t follow the rules of the previous concession, and that could affect the company’s right of first refusal.

The commission may also hear Mount Spokane 2000’s objections to Sowder’s version of the concession contract.

The parks commission meets in Spokane on April 26, and the Mount Spokane issue will likely come up, contracts manager Wayne McLaughlin said Friday from Olympia.

Whether Sowder can legally make money under the new concession is the big sticking point, McLaughlin said. In the contract sent to McLaughlin, Sowder modified the definition of “operating expenses” to include paying dividends to investors and retaining earnings like a forprofit company.

Sowder also announced plans for improvements Friday. The ski area will add a day-care facility - as required under the study group proposal.

It also will remodel the lounge area at its Lodge No. 2 and add a stage for live music. Sowder said he’ll also build a large area next to Lodge No. 1 on the mountain for inner-tubing and snow sculpting for young children.

Mount Spokane has been one of the few, if not the only, Inland Northwest ski areas to consistently make money this decade.

This most recent ski year was a financial disaster for nearly all resorts in the region. But for Sowder, even if he makes less money, it made more sense to keep the concession than to give it up.

Mount Spokane is one of those unique community ski hills that happens to be very close to a captive, big skiing market, said John Hunt, head of the Resource Recreation and Tourism Department at the University of Idaho in Moscow.

“If someone’s got a nice mountain that sits next door to a big market, odds are that they’re going to do pretty well,” Hunt said. “That’s somewhat enviable.”

Mount Spokane doesn’t spend hundreds of thousands on marketing itself to destination skiers like Schweitzer Mountain Resort in Sandpoint and, to a lesser extent, Silver Mountain Resort in Kellogg.

The Mount Spokane 2000 group contends that Sowder doesn’t spend enough on improvements, and used the concession process to try to force changes on the mountain.

If the parks commission approves Sowder’s latest proposal, the study group will have to decide if there’s anything left to do, Stiles said.

, DataTimes MEMO: This sidebar appeared with the story: DETAILS ON THE DEAL Here’s a brief look at what the deal means for Mt. Spokane Skiing Corp.: Fees The company currently pays $20,000 and 1 percent of gross receipts to the state for the concession. Under the new rules, it will have to pay $20,000, plus a minimum of 3 percent of gross revenues up to $1 million, and up to 4 percent of revenues above $2 million. Improvements The company planned to spend about $37,000 in improvements over the next five years, and a minimum of $1.8 million of improvements over the next 10 years. Under the new agreement, the company would have to spend all of its profits on improvements for day-care facilities, ski patrol services and to renovate the two lodges. Enhancing and improving beginner and intermediate terrain on the mountain would also be priorities. Snow plowing Under the new rules, the company will pay as much as $75,000 for snow plowing, which had been the state’s responsibility before. Night skiing The company wanted to re-evaluate the profitability of night skiing services. Under the new rules, night skiing must continue at its present level. Source: Washington State Parks and Recreation Commission

This sidebar appeared with the story: DETAILS ON THE DEAL Here’s a brief look at what the deal means for Mt. Spokane Skiing Corp.: Fees The company currently pays $20,000 and 1 percent of gross receipts to the state for the concession. Under the new rules, it will have to pay $20,000, plus a minimum of 3 percent of gross revenues up to $1 million, and up to 4 percent of revenues above $2 million. Improvements The company planned to spend about $37,000 in improvements over the next five years, and a minimum of $1.8 million of improvements over the next 10 years. Under the new agreement, the company would have to spend all of its profits on improvements for day-care facilities, ski patrol services and to renovate the two lodges. Enhancing and improving beginner and intermediate terrain on the mountain would also be priorities. Snow plowing Under the new rules, the company will pay as much as $75,000 for snow plowing, which had been the state’s responsibility before. Night skiing The company wanted to re-evaluate the profitability of night skiing services. Under the new rules, night skiing must continue at its present level. Source: Washington State Parks and Recreation Commission


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