DONNELLY, Idaho – Standing at midmountain of the Tamarack Resort in central Idaho’s Rocky Mountains, Tim Wolfgram scans the horizon to the east.
Fog shrouds the base of America’s newest ski area, but the sun is shining at 6,600 feet. Wolfgram, Tamarack’s recreation director, has a good view of Rainbow Peak and the River of No Return Wilderness beyond.
With a panorama like this, it’s easy to forget the resort’s reason for existing isn’t even the skiing.
The real force behind Tamarack lies some 2,000 feet below in the foggy gloom: more than 2,000 prime building lots that are expected to sell for more than $1 billion combined over the next decade.
“The price of a resort has grown to be so large you need something that will help build it,” says Wolfgram, a fit 49-year-old former ski instructor, leaning casually on his ski poles. “The sale of property helps spur the building of the resort.”
In the past quarter-century, visits to U.S. ski areas have risen less than 1 percent annually, on average. And since 1984, a third of American ski resorts have disappeared from the landscape, shrinking to 494 in 2004 from 727 in 1985.
Tamarack, along with Moonlight Basin, a ski area that opened in 2003 near Big Sky, Mont., are billing themselves as a new breed of resort. They hope to beat the trend of vanishing ski hills and stagnating skier visits by focusing on real estate revenue – not just ski lifts that may not earn a profit for years.
Tamarack’s investors have spent nearly $200 million so far, sending economic ripples across Valley County, a remote Idaho region that’s waking to life after a spate of closures at lumber mills, once the area’s lifeblood.
Yet risks remain.
Idaho is also in the midst of a five-year drought, which doesn’t bode well for snow lovers.
And recent history teaches a tough lesson: America’s two biggest ski companies – American Skiing Co. and Vail Resorts – have lost $125 million combined in two years. Both have large real-estate development companies with millions of dollars of projects competing for the same deep-pocketed buyers as Tamarack.
“We’ve certainly had our share of ups and downs with our real-estate strategy,” says Dave Hirasawa, a spokesman for Park City, Utah-based American Skiing, the owner of Killington in Vermont and Steamboat Springs in Colorado.
And Tamarack’s more established neighbors, such as Sun Valley – America’s first resort, built in 1936, located about 100 miles southeast of Tamarack across the mountains – raised their eyebrows when they heard the resort’s skier projections.
Jim Spenst, Tamarack’s director of skiing, forecasts they’ll eventually rise from 70,000 visits in 2004-2005 to more than 200,000.
But Pierre Boespflug, 50, the goateed French resort investor who plans to sink $1.5 billion into Tamarack in the next 15 years, says he’s succeeding so far.
The mountain opened Dec. 15 – on time – to its first lift-serviced skiing.
More critical, Boespflug has so far rounded up 171 buyers to purchase $77 million worth of property adjacent to his ski hill. In January, he hopes to fetch another $55 million for the next 97 lots on the auction block.