November 30, 1997 in Nation/World

Ski Hill Battle Is Last Resort For Brown Family Fortune

By The Spokesman-Review
 

Jim Brown Jr. and his Pack River Co. once owned so much land that Forest Service maps used a separate color to show the timber magnate’s holdings.

His 300,000 acres and chain of sawmills in Washington, Idaho and Montana made Brown one of the nation’s top 10 lumber producers. It also made the Sandpoint man a fortune.

Brown sold his mills and much of his timber land for $105 million in 1979. Four years later, he pocketed another $28 million when he sold the federal government more than 22,000 acres in north-central Washington to turn into wilderness.

Today, the family’s wealth is gone.

Nearly half the riches was poured into a dream called Schweitzer Mountain Resort - all that is left of the Brown family fortune. Much of the rest was lost on bad business ventures, according to family members and friends.

Now even Schweitzer seems to be slipping from the family’s grasp.

Two family members are trying desperately to hang onto the mountain, which has a debt as deep as its snow-capped peaks. The resort owes creditors about $28 million.

“We have spent the last decade putting all our eggs in this basket. We hoped, dreamed and sacrificed to sustain Schweitzer,” said Bobbie Huguenin, Jim Brown’s eldest daughter. “We don’t want to walk away from it after all the money we have put into it without thinking our children and grandchildren should have some benefit from it.”

Leading the fight

Huguenin’s leading the fight for control of the debt-ridden resort. The bank has threatened to foreclose on the mountain if she is reinstated as Schweitzer’s chief financial manager. The ski hill is being run by court-appointed trustee Ford Elsaesser. He’s trying to sell the resort to a Seattle firm to pay off creditors. Huguenin and her mother placed the resort into bankruptcy weeks ago to stop the sale.

Huguenin said her late father pumped $50 million into Schweitzer during the last two decades. She refuses to let that investment disappear, along with her father’s dream to build a profitable, world-class ski hill for Sandpoint.

“We believe in it. Does that mean we are dedicated or nuts?” Huguenin said. “Dad did take risks. I guess I inherited some of that. The resort can and will be successful, and I want our family to be there to share in that success.”

Family members, including Brown’s widow, Jean, and his four daughters, have bet all they own on Schweitzer.

Their homes, their property, even the paintings on the walls of the home where Jean Brown has lived for 54 years could be lost to creditors.

“It has been very scary. The bank has everything, and we have no wiggle room,” said Jean Brown, the family matriarch.

The prospect of losing homes, a ranch in Montana and trust funds has three of her daughters ready to let Schweitzer loose.

Jodi Bopp, Jackie Gran and Patricia Powell have their own attorney. They want the resort sold to Harbor Properties of Seattle to take the family out of debt. The disagreement has caused a family rift.

“They want it over with. They want their homes free and clear,” Jean Brown said. “They think differently and are willing to give it (Schweitzer) all up.”

Through their lawyer, the dissenting daughters declined to comment. Another relative, who requested his name not be used to avoid a deeper family feud, called the whole affair “sad.”

“Bobbie is a sweetheart and I love her dearly. I understand she is trying to protect the family fortune, but she’s dumped every available dime into the mountain,” he said. “If it goes, I don’t think there would be much left.”

“Ninety percent of the fiasco up there was due to mismanagement,” he added. “Not so much by Bobbie or Jean but the people they hired. They went too fast, too soon and overextended themselves.”

Huguenin launched a 10-year, $100 million expansion project at the resort in 1990, a year after her father died. It was based on a plan her father had and included a new hotel, day lodge, and high-speed chairlift. The goal was to sell real estate, attract more skiers and investors who would continue to build on the mountain.

A couple of bad snow years and a lack of developers stalled the expansion and sunk the resort deep in debt. Cash went out faster than it was coming in. The mountain road washed out one year, and the sewer and water systems failed, costing the resort millions.

“It’s just sad to see it happen to a family like that. They have been good corporate citizens for the Northwest,” said Dick Bennett, executive vice president of Bennett Lumber Products in Hayden Lake. Bennett has known the Brown family for decades.

Bennett knew how much cash Jim Brown made when he sold his lumber company. The family never should have had to worry about going broke. “He made a good move, sold at a good time,” Bennett said. “That should have taken care of them for life. They could have sat back and clipped coupons and lived off their wealth.”

Questionable investments

Schweitzer didn’t suck up all the family fortune. Those who knew Brown in his heyday said he lost millions on questionable investments.

“Jimmy (Brown) took a lot of risks. Some worked out and some didn’t,” Jean Brown said. Jim Brown and his brother Larry built a large, extravagant office complex at the Coeur d’Alene airport after selling their mills and timber.

The complex had offices for almost all the family members, underground parking, a hangar for planes and a helicopter. It even had living quarters for the pilots. The family used the headquarters to review business deals brought to them by other entrepreneurs.

“People were bringing sucker deals to them. Most of them turned out bad. That’s how they lost a lot of money,” said a former business associate and friend of Jim Brown, who did not want his name used.

Some of the money was lost on oil ventures, the trucking business and a sawmill in Tonasket, Wash., he said.

“They had so much money they didn’t think they could lose it all. They thought they could corner this market and that market, and made some very poor decisions.”

Family says resort undervalued

Jean Brown and Huguenin say the resort is not one of those bad decisions. It’s worth much more than the $18 million Harbor Properties offered to pay earlier this year. Elsaesser, the trustee, brokered the deal with the Seattle firm to resolve Schweitzer’s financial crisis.

Huguenin and Brown have filed a lawsuit against U.S. Bank, saying they conspired to liquidate the family’s assets, leaving them penniless.

Bank officials have said the family defaulted on loans and mismanaged the resort. The only way to move the resort out of debt and pay creditors they said, was to sell Schweitzer.

Initially, Jean Brown and Huguenin signed a term sheet that would have sealed a sale to Harbor Properties.

They pulled out of the deal after discovering the family still had to come up with about $8 million after the sale to pay off debts.

“If I had an extra eight million, I wouldn’t be in this position,” Huguenin said.

Bank officials told her signing would stop another hostile company from buying Schweitzer’s bank notes. That company planned to take the family’s personal property, Huguenin said. The buyers even looked at her mother’s home and one daughter’s ranch in Montana.

“We signed under pressure to keep someone from liquidating our personal assets. That was a very dark day,” Huguenin said.

Some family holdings have already been sold by the resort trustee to pay creditors and interest on the bank loan. The family has lost about 21 properties that were sold for $5.9 million. Huguenin also put up the family’s prized Lake Pend Oreille property, called Kootenai Point, as collateral. The bank needed it before loaning the resort another $1 million to fix the ski area’s defective high-speed quad chairlift.

“Some people believe we have bled Schweitzer and taken money out of it,” Huguenin said. “But we have totally supported it. Money from the mills and investments have all gone into the mountain and proudly so. The family has never seen a penny from the resort.”

The profits, when there were any, were always put back into the resort, Huguenin said. She has criticized the bank for taking too much collateral from the family. Property signed over to the bank has been valued at about $42 million, according to appraisals ordered and compiled by the bank and by the Pack River Co.

That’s nearly double what the Browns owe the bank.

Huguenin admits making mistakes. She would have slowed mountain development, possibly holding back on building the 80-room hotel, if she had it to do over again.

The legal battles and bankruptcy are the only way for the family to retake the mountain, Jean Brown said. The family wants to find a partner to help them out of debt and continue with Jim Brown’s dream at Schweitzer.

Huguenin is asking the community for the benefit of the doubt. Schweitzer has never said no to fund-raisers or community events. Jim Brown donated quietly to send kids to college and stop foreclosures on friends’ homes.

“We have a lifetime of commitments here. The community needs to judge what kind of people we are from our past actions,” Huguenin said. “We are trying to save something for our family and our community.”

, DataTimes ILLUSTRATION: Color photo

MEMO: IDAHO HEADLINE: Ski hill battle is last resort for Browns

IDAHO HEADLINE: Ski hill battle is last resort for Browns

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