March 17, 2009 in City

Resort’s financial troubles put a strain on Valley County

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Associated Press photos photo

Seeing the good business at a booming Tamarack, Wade Olson started a gravel and excavation company. Tamarack still owes him money. Associated Press photos
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DONNELLY, Idaho – When construction began on Tamarack Resort in 2003, Valley County residents saw at last a way to revive an economy that still stagnated a decade after Boise Cascade closed its lumber mills in Donnelly in Cascade. Six years later, stagnation is back.

The resort closed March 4 after its court-appointed receiver ran short of cash, leaving creditors unpaid and buildings unfinished. After a real estate boom that drew construction crews, speculators and outdoor enthusiasts, longtime Valley County residents are once again watching as businesses close and neighbors leave.

“From Donnelly south, I know of 50 families that have loaded their possessions in their cars and left, and I’m watching this town dry up and blow away,” said Mayor Dick Carter, of Cascade, a town of 1,000 people about 20 minutes south of Tamarack.

The county’s economy, he said, has slipped from recession to depression.

“There aren’t any jobs to replace the 200 at Tamarack,” Carter said. “Every week we have the food bank come up, and the length of the line at the senior center has tripled in the last six months.”

Another 400 jobs are likely to disappear, said John Blaye, economic development director of Valley County. The most recent unemployment numbers have Valley County at 10.5 percent. Blaye thinks the resort’s closure could move the needle to 16 percent.

Carter does see a possible upside, though.

“This will either drive us away, or it will drive us into closer, more cohesive ties to our neighbors – and I’m seeing that happen.”

Here’s how some of those neighbors are coping.

The family

A block from Cascade’s City Hall, at the Whistle Stop, Sharon Olson serves lunch to a dozen regular customers. She has homemade soups and bread, and the pastry shelves are stocked with fresh cinnamon rolls the size of a skillet.

Olson has owned the restaurant for 18 years. By pinching pennies and working seven days a week, she paid off the building and kept her costs in check.

“I’m fortunate,” she said. “The Chief (a hotel and restaurant up the street) and Moxie Java closed last summer after construction stopped. I picked up their business.”

Her husband and son, who run separate construction companies, haven’t done as well.

Tom Olson owns Roadrunner Readymix. He did a booming custom-home construction business in the valley surrounding Tamarack.

Their son, Wade Olson, 26, started working for a construction company at Tamarack, but there was so much work, he opened his own gravel and excavation company in 2005.

Between the two they employed 35 people working at the resort and on subdivisions that sprang up around Long Valley. That all screeched to a halt last summer.

Tom Olson has one employee left. Wade Olson has cut his entire crew. He has begun selling equipment to pay his bills.

Tamarack and two other contractors owe him six figures for work he has finished. He thinks he has a 50-50 chance of getting paid by the two, but doesn’t expect ever to be paid by Tamarack.

“I don’t sleep very well,” he said.

The pharmacist

Pharmacist Bill Wheeler doesn’t think this is the worst downturn he’s seen. He said things were worse when Jimmy Carter was president.

“These people are versatile, and we are a community of survivors,” Wheeler said.

He and his wife bought Wheeler’s Pharmacy on Cascade’s Main Street 37 years ago. At the time it was 1,200 square feet. Today they have 11 full- and part-time employees and 7,200 square feet with gifts, clothing, books and a small coffee bar. They have had to cut some workers’ hours but haven’t let any go.

His business relies on heavy recreational traffic through Cascade on the way to McCall. “Our market really is the Treasure Valley, so I’m expecting the summer season will be about as busy as it ever was, but without the construction workers,” he said.

The ski bum

Wolfe Ashcraft hopes Tamarack’s legal and financial problems will be settled long before the March 2010 date set by state District Judge Patrick Owen for foreclosure.

He’s not sure his ski-rental business in Donnelly can hold out without a ski season next winter at the resort.

Ashcraft, 35, grew up in the business. His family owns ski shops at Angel Fire resort in New Mexico. He opened Pro Peak Sports in Donnelly in 2005.

He was counting on Tamarack maturing into a destination resort, which he said would bring in more money than a regional resort like Brundage does but with no more work or investment. Now he’s considering moving to McCall if he can find a turnkey location.

“Up until last Wednesday, we were on track to be in our best financial position yet,” he said. “But now I’m worried about surviving.”

The investor

Retired engineer, world traveler and antique dealer Paul Sevoian thinks he knows an opportunity when he sees one. He was sure of it when he bought the Roseberry Plaza shopping center in Donnelly two weeks ago.

The plaza consists of three buildings – two empty and the third half occupied.

“That building has $200,000 in restaurant equipment already installed,” he said, pointing to the empty structure on the southwest corner of the property.

“Tamarack is not going away,” he said. “There are already 250 residents up there, and there is no restaurant, no grocery store. Nothing but the homes and the security guards and half a billion dollars in improvements. Sooner rather than later, somebody will swoop in and restart the operation.”

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