Harbor Properties’ executive Ron Cook was first in line at Schweitzer Mountain Resort’s ski lifts Monday morning.
While the meager snowpack was melting away under his skis, the Seattle businessman was trying to dissolve employees’ growing sense of panic about Schweitzer’s future.
Yes, Cook said, Schweitzer’s sale deal did come to a stop in September when Harbor Properties pulled its $500,000 in earnest money. The firm yanked its bid to buy Schweitzer after the family who owns the ski hill sought bankruptcy protection to stop the sale.
But Harbor Properties’ offer is still on the table and the company has no plans to turn its back on buying the embattled resort.
“They’re nervous. We wanted to reassure them we are still interested,” Cook said of his visit with employees. “You can’t say that enough. Every time I say that to someone, they say, ‘You don’t know how good it is to hear that.”’
The sale could go forward at any time, Cook said, if court-appointed trustee and resort manager Ford Elsaesser is able to renegotiate an agreement.
“If he told me he had a deal right now, that $500,000 would be back here in a nanosecond,” Cook said. “I don’t think there is a scenario where we would say: Forget it - we’ve lost our interest.”
Sandpoint’s Brown family built Schweitzer Mountain Resort with the family’s lumber mill fortune. But an ill-fated expansion put the resort $28 million in debt, forcing the family to turn over management to a court-appointed receiver. Elsaesser is trying to sell the resort to the Seattle firm to pay off creditors.
Just days after agreeing to sell the resort last summer, former Schweitzer President Bobbie Huguenin and her mother, Jean O. Brown, objected to the sale, claiming the resort’s assets were being sold off at “fire sale” prices, in part due to what they called poor management and conflicts of interest by Elsaesser.
They filed for bankruptcy protection in hopes a judge would allow them to reorganize the resort and pay off their debts. That prompted Harbor Properties to pull its earnest money until the Brown’s legal challenges were exhausted. “We wanted to make a statement that we were a little frustrated that the deal we thought we’d agreed to wouldn’t be able to happen,” Cook explained. “So until we were able to close on the deal, we wanted to get our money back in Seattle.”
News of Harbor Properties’ move emerged last week during Schweitzer’s bankruptcy hearings. A judge is expected to decide this week who will control operations of the mountain. Last week’s hearings included testimony from Tim Hinderman, general manager of the resort from 1986 to 1993 and Dennis Duty, who marketed and sold more than 150 condominiums between 1980 and 1997.
The two men warned that allowing Huguenin to control the ski resort would devastate morale and could cause unrest in the real estate market.
Hinderman, who managed the resort during the last two ski seasons, defended Elsaesser’s management. He said the ‘96-‘97 ski season wasn’t more profitable because Christmas closures and bad weather prevented 15,000 skier visits, mostly from the Spokane market.
In addition, Hinderman said, heavy snows and a lack of funding delayed completion of the high-speed quad ski lift, which resulted in significant overtime expenses for snow removal and for contractors to get the quad running by January.
Duty said during his time developing property at Schweitzer, Huguenin consistently believed that the properties she and her family owned were worth more than current market value.
Terry Enos, chief operating officer of Schweitzer from 1991-1995, has said in an affidavit that Huguenin authorized millions of dollars in payments to family members and in ill-advised purchases and investments against his advice.
Goodale & Barbieri, J & S Realty, Telluride Ski Corporation, American Ski Corporation were among the companies interested in Schweitzer earlier this year.
By removing its earnest money, Harbor Properties risks the possibility of another company buying the resort. But Elsaesser said there’s little chance of that.
“It appears that anyone who has any interest in Schweitzer is in support of this sale except these two family members who have begun these actions,” Elsaesser said. “There are no other higher bids or more qualified purchasers out there.”
Meanwhile, business has picked up over the last two weeks at the resort, which still has only 70-80 percent of its terrain open.
As of last week, the resort was 300 skiers behind Christmas last year, which General Manager Peter Gillis said was positive, given the slow season start.
Cook praised changes ongoing at Schweitzer, including a controversial new drug testing program. The resort has also started doing daily flash reports to tally car and skier counts and revenue generated in every department.
Schweitzer also created the Choice pass, which offers discounted season pass discounts to Bonner County students who maintain good attendance at school.
The other “improvements,” however, are aimed more at improving the bottom line, Cook admitted. There are 80 more season-long pay lockers, 40 new pay parking spaces and fees for shuttle services.
Skiers always want more fireplaces and couches, Cook said, but such amenities generate little revenue.
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