Debt-ridden Schweitzer Mountain Resort will open this winter thanks to a last-ditch infusion of $750,000 from U.S. Bank.
Despite being sued and owed $21 million by the resort owners, the bank agreed to ante up more money so the ski hill wouldn’t close.
The move saves 500 jobs on the mountain and ensures Sandpoint’s winter tourism economy won’t bust.
“There really wasn’t any alternative. The only responsible thing to do was make sure the mountain stayed open,” said Peter Holmes, a Seattle-based attorney for U.S. Bank.
“The bank could have conceivably shut it down and not spent any money,” he said. “There is an element of risk in opening it up, but the bank was quite aware of the impact on the community.
“The bank didn’t hesitate long on its decision.”
Resort employees cheered the news Thursday, and business leaders were relieved.
“Everybody in town has been concerned. I’ve heard from almost every segment in the business community: Realtors, retail, hotels, restaurants and car dealers. This will relieve a lot of anxiety,” said Sandpoint Chamber of Commerce Executive Director Jonathan Coe.
What’s most important for the town’s tourism economy is to get word out that Schweitzer is open, he said. The resort fielded calls this week from people anxious about booking Christmas vacations because the resort was in limbo.
“This is great news. I don’t have to leave town,” said John Pucci, a 30-year resort employee and head of the ski patrol. He had another job lined up in case the resort folded.
Bea Wolfe, general manager of the resort’s Green Gables Hotel, thanked the bank and Sandpoint attorney Ford Elsaesser, who brokered the deal to save the mountain.
“People were very much worried about their jobs,” she said. “Some long-time employees have been through a lot at Schweitzer, and this was the news of the day for those that still had faith. Employees are ecstatic.”
A tangle of lawsuits and lack of cash had Schweitzer on the verge of shutting down. The ski hill needed an estimated $1 million to operate. It was questionable whether the bank or a prospective buyer would hand over any cash with the resort mired in controversy.
Harbor Properties Inc., a Seattle firm, signed a deal weeks ago to buy the resort for about $18 million. The sale was agreed to by members of the Jim Brown family, who founded the ski hill in 1963.
But two family members, Bobbie Huguenin and her mother, Jean Brown, are protesting the sale saying they aren’t getting enough money.
The mother-daughter team also sued U.S. Bank, further clouding Schweitzer’s future. The two claim they were forced to let Elsaesser oversee the resort.
He was appointed by a judge and approved by the family, to run the resort and sell it to pay off creditors. But now the family is accusing him and the bank of conspiring to take the Brown family fortune. The family borrowed about $21 million to develop and operate Schweitzer. They have been unable to repay the loan.
Elsaesser met with the bank and Harbor Properties officials this week, pleading for financial backing from either one.
“The bank has given us full support and made a great commitment to the community,” Elsaesser said. The money will make sure “the ultimate future of Schweitzer is as a full-service, going-concern ski resort,” he said.
Schweitzer plans to start selling season passes next week. Lift ticket prices will also be announced.
Although the resort will open on schedule, there will likely be no immediate improvements to the ski area. Elsaesser still hopes to close a sale with Harbor Properties so they can manage Schweitzer this winter.
“We are still interested and will continue to be as long as there is an opportunity for us to own Schweitzer,” said Harbor’s chief financial officer, Ron Cook. He still expects the sale agreement to go before a federal judge in the next two weeks.
The bank is in favor of the sale, but Holmes said it is uncertain what will happen since two of the Brown family members reneged on the deal.
“What the family has unwittingly done is hold that mountain hostage,” Holmes said. “The bank recognizes this must be very hard for the family, and we have no desire to get in there and pillage.”