Silver Mountain Landlords Still Can Challenge Lease But Ruling Narrows Issues Before Idaho’s 1st District Court

If Swiss manufacturer Von Roll AG was about to foreclose on struggling Silver Mountain ski resort before it was sold, then a complex legal boggle may come to an end.

If Von Roll had no such intentions, then all bets are off as to whether the lease between the city of Kellogg and the owners of Silver Mountain is legal.

That’s the gist of a ruling Wednesday that allowed Silver Mountain’s landlords to continue their challenge of the Silver Mountain lease. However, the ruling also narrowed the issues in front of the court considerably.

At stake is the future of the ski resort, which remains open Saturdays to take advantage of record snowfall.

In the ruling, 1st District Court Judge Craig Kosonen writes that the transaction between the city and Redmond, Ore.-based Eagle Crest Partners was legal, but only if Von Roll had planned to foreclose on the resort.

The 7-year-old resort could not generate enough money to pay its debt. When it was clear that the ski area could not return Von Roll’s nearly $17 million investment, the lift manufacturer decided to sell the resort.

In May 1996, the city of Kellogg transferred the lease agreement to Eagle Crest for $3.5 million. Mission Mountain, which had bought the land underneath the ski hill in 1994, wasn’t consulted in the negotiations for Silver Mountain.

Mission Mountain attorneys said the agreement between the city and the ski area landlord was breached when the resort changed hands. Wednesday’s ruling, according to Kellogg City Attorney Charlie Cox, agrees with the city’s interpretation, and lays to rest nearly all the claims that challenged the deal, he said.

However, Mission Mountain’s John Beasley said Wednesday that he was “very pleased” that the judge had denied Cox’s request to throw out the case. “This is just round one,” Beasley said.

Both sides now will seek depositions from Von Roll executives to move the case along.

Beasley said he had not read the ruling thoroughly enough to comment on specific issues it raised.

Mission Mountain offered to settle the case with the city of Kellogg while still pursuing Eagle Crest and Silver Mountain Corp., the corporate entity created to run the resort.

Beasley has said his group is concerned that Eagle Crest will remove the gondola from the mountain, as it is entitled to under the lease agreement. Eagle Crest officials and Silver Mountain management have denied that will happen.

All three parties found themselves in court over a logging dispute on the ski resort’s boundaries. If the lease between the city and Eagle Crest were to somehow be declared void, Mission Mountain may charge rent for use of its land or force Eagle Crest to negotiate.

, DataTimes