Ski Resort May Have To Pay Rent Dispute Over Silver Mountain Logging Road Prompts Landlord To Void Lease With City

Silver Mountain’s landlord wants to void a sweetheart lease at the ski resort and instead charge rent.

Mission Mountain Interests Ltd. owns the 1,500 acres on which Silver Mountain’s ski lifts run.

The city of Kellogg leases the land from Mission Mountain practically for free. Eagle Crest Partners of Redmond, Ore., signed a $3 million deal with the city in May to run the struggling ski resort.

A dispute about logging timber around the ski hill has brought the three parties to court. Mission Mountain lowered the boom on the lease this week by calling the lease void and the city’s management deal with Eagle Crest a “sham.”

The specter of higher rent comes at a time when Silver Mountain is trying to make improvements. Silver Mountain has not been profitable in its six years.

Mission Mountain bought the land for the ski area in 1994 from the Bunker Hill Partnership, and with it the lease that specifies the city can use the land rent-free. In exchange, Kellogg pays property taxes and maintains water systems and mountain roads.

The city asked Sept. 24 for a court injunction to stop Mission Mountain from building a short logging road in the out-of-bounds area on the mountain.

Mission Mountain has a contract with Riley Creek Lumber Co. to manage timber on the land, and needed the road to get logs off the mountain, according to John Beasley, secretary for Mission Mountain.

In answering the city’s suit, Mission Mountain contends that Kellogg breached the lease and that Eagle Crest has been trespassing on its land. Mission Mountain wants to charge Eagle Crest rent for using the land.

“We’re not Uncle Bunker,” Beasley said, referring to the euphemism for the Bunker Hill Mining Co., which used to control much of the valley. “We’ve always wanted to see Silver Mountain be a success because we own the development rights to the land. But here we’re basically protecting our interests.”

Terry Turnbow, general manager of the resort, said he couldn’t comment on the lawsuit, but believed it would not affect the upcoming ski season. “I hope they get it resolved,” he said.

Reached earlier this week, Kellogg City Attorney Charlie Cox said he didn’t believe the litigation would affect the lease agreement. However, he had not seen Mission Mountain’s response to the city suit. Cox did not return calls Friday.

In a deposition in the suit filed by the city, Turnbow said that logging on the land around the ski resort interferes with Silver Mountain’s plans to improve its ski runs.

Skiers have complained that Silver Mountain’s runs are too choppy. To lengthen runs, Turnbow has wanted to take out some of the access roads that cut runs in half. Logging trucks use those roads during the summer, scaring away mountain bikers who don’t want to compete with the big trucks.

The lease prohibits Mission Mountain from doing anything that hinders Silver Mountain’s ski activities. There’s the first catch, Beasley said.

“It doesn’t say anything about the summer activities,” Beasley said. According to Mission Mountain, the city has breached the lease for the following reasons:

The lease runs until 2020 or until the original $16.8 million of revenue bonds used to build the resort are retired. When Swiss manufacturer Von Roll AG sold the resort to Eagle Crest in May, it retired the bonds that it guaranteed. That ended the lease, according to the Mission Mountain suit.

The lease requires Kellogg to maintain the Tamarack Lodge and its water system. The lodge hasn’t been usable for several years.

Neither the city nor Eagle Crest consulted Mission Mountain when the resort changed hands in May, Beasley said. Eagle Crest technically leased the assets of the ski resort, but has an option to buy the equipment.

“Wouldn’t you want to talk to the landlord if you were looking to buy what’s on it?” Beasley asked.

Along with asking for rent, the Mission Mountain suit filed in Shoshone County 1st District Court asks for punitive damages against the city and Eagle Crest, which does business as Silver Mountain Corp.

, DataTimes