Silver Mountain Owners Considered Taking Gondola But Now Have Backed Off Plans To Strip Ski Resort Of Assets

When Silver Mountain’s new own ers first considered buying Kellogg’s financially strapped ski resort, they viewed it as a way to pick up a cheap gondola.

“We did not look at Silver Mountain as a business opportunity but as an opportunity to buy some assets inexpensively,” Jerry Andres, president of Eagle Crest Partners of Redmond, Ore., said in January 1996.

“Our plans were to run Silver Mountain, make it financially successful and if not financially successful, relocate the assets to Pelican Butte,” Andres continued, referring to a ski resort the company planned to develop in Oregon.

Andres said Monday that Eagle Crest’s intentions have changed since it first considered buying the resort. Although the company has not earned money on the ski resort since acquiring it in May 1996, Andres said, Eagle Crest has spent $800,000 on improvements and plans to make Silver a success.

“Our total direction has changed since that memo. It’s not the company’s position today,” Andres said. “We’re operating it with the intention of making money. You don’t build a business to remove its assets.”

Andres’ comments in January 1996 were made during the course of a telephone conference call with representatives of his company, the city of Kellogg and Von Roll AG, the resort’s former owner.

The transcript from the call was included among recently filed court documents in a lawsuit between Eagle Crest, Kellogg and Mission Mountain Interests, which owns much of the land the ski hill sits upon.

At issue is whether the city of Kellogg legally transferred the lease to operate Silver Mountain from Von Roll to Eagle Crest. A Shoshone County District Court judge decided in April that if Von Roll had been about to foreclose on the resort when it was sold, then the lease is valid.

The court will hear arguments July 28 about Von Roll’s intentions toward the resort at the time of the sale.

Despite Eagle Crest’s stated intent, the company still has the right, because of a clause in its lease with the city, to remove any of the mountain’s assets in two years. However, the shaky future of the Pelican Butte development could bode well for Kellogg.

“Pelican Butte is probably at least six years off,” Andres said Monday. “We’re not even sure we’re going to continue with it.”

Representatives of Mission Mountain question why the city of Kellogg would sell the ski resort to a company that ever intended to remove assets, including Silver’s 16,000-foot gondola.

The gondola opened in 1990, financed by a $6.4 million federal grant, a $2 million, 20-year local bond issue, and $6.4 million contribution from Von Roll.

Regardless of whether the assets of Silver Mountain remain in Kellogg, the city’s property owners will continue to pay $100,000 per year on the bond issue.

“It really does not look like it’s in the best interests of the city of Kellogg,” said Alan Blakley, attorney for Mission Mountain. “I just don’t understand it at all.”

Charlie Cox, attorney for the city of Kellogg, said the city is confident that Eagle Crest’s plans for Silver have changed.

“They’re here for the long haul,” Cox said.

Andres said Monday that the assets were the only reason any company originally was interested in the ski resort, which hasn’t made money in years.

However, Tom Cullen, finance manager of Winter Sports Inc., owner of The Big Mountain ski resort in Kalispell, Mont., which also submitted a bid for Silver Mountain, disagreed.

“It was our intent to buy it and operate it as a ski hill,” Cullen said. “Yeah, we wanted the assets, but we wanted them there.”

, DataTimes ILLUSTRATION: Color Photo