158 replies to this topic

[SkiBachelor]

At Tamarack, there has been a lot of focus on catering to the residential (real-estate) section of the resort, knowing that it would help focus on paying off the debt. However, there still are still no actual buildings other than temporary tents, but I guess one nice hotel has been built.

http://www.tamarackidaho.com/vacation_plan...rey_meadows.php

[Snoqualmie guy]

It sounds like they are trying be a Sun Valley overnight and it has resulted in no money.

[Peter]

Is Tamarack Resort on even thinner ice than it appears?
Tuesday, April 29, 2008

by Simon Shifrin

Remember when Tamarack CEO Jean-Pierre Boespflug told the Idaho Statesman on April 16 that the resort decided to close its Boise office “to further reduce expenses and to avoid cutbacks at the resort in Donnelly?” Well, that’s not exactly the whole story. Tamarack was actually evicted from its first floor office at the University Plaza building at 960 Broadway Ave. after it had fallen two months behind on rent and owed property owner Pitch Fork Management Group more than $20,000.

Pitch Fork took Tamarack to court to get the company evicted, and Magistrate Judge Patricia Young ordered the company to remove its personnel and equipment from the office on April 16.

Maybe it wasn’t such a bad deal for Tamarack, which faces a lawsuit from investment bank Credit Suisse over claims that the resort defaulted on a $250 million loan and whose two major investors have filed for bankruptcy protection in federal court.

Tamarack owed Pitch Fork more than $20,000 in overdue rent but was ordered by the court to repay only $615 in attorney fees.

Okay, so that’s pennies when you’re talking about a development that’s estimated to cost $1.5 billion at full build out and that has already reported selling more than $515 million worth of residential property. But what does it mean when a company like that can’t pay its $10,413 monthly rent?

Oh, and one side note from the Department of Won’t You Stay Just a Little Bit Longer: One of the perks of having Tamarack as a tenant was that in lieu of a security deposit, the resort offered Pitch Fork “or its assigned persons” 34 rounds of golf, 24 one-day ski passes and eight cat ski passes each year. Not a bad deal for Pitch Fork, though not much security against raging keggers and the like.

[Callao]

Jean-Pierre Boespflug is an engineer who made his fortune in hi-tech networking. Because he's got money now, he is a venture capitalist for hi-tech companies and has dumped a lot of money in real estate (usually a very good idea). He just didn't know about the ski industry, and probably wasn't aware that ski resorts typically only sell for about 65% of the cost of the original infrastructure--or that the ski industry is a flat market. He does understand the real estate part though, which is why this project is likely to work.

Residential and and lodging is where the money is made--sorry to all the "I love slow double lifts" people who find charm in having no other alternative to eating plain slices of white bread in the parking lot and taking a crap in the trees. "Where did the little-resort charm go? And why is my mountain buying detachables and building cabins in the trees I used to crap in?" Let me tell you where your resort went: it either went out of business, or its staying afloat with the sale of real estate and room nights. Likewise, Tamarack should do fine because of its real estate sales.

If only the real estate market wasn't in the toilet right now.

[SkiBachelor]

Quote

Likewise, Tamarack should do fine because of its real estate sales.

Real-estate can't keep a resort alive forever. It needs to have a loyal customer base to and I feel that will be the biggest challenge Tamarack will face.

[Peter]

There are plenty of resorts out there which thrive on skiing alone without any real estate involved and still have enough money to invest in capital improvements.

I think Tamarack will weather this storm and emerge with a new owner and without Jean-Pierre Boespflug.

[Callao]

SkiBachelor, on May 4 2008, 11:33 PM, said:

Real-estate can't keep a resort alive forever. It needs to have a loyal customer base to and I feel that will be the biggest challenge Tamarack will face.

Developers aren't concerned with sustainability. They want to get in, make a quick buck, and get out before the money stops flowing. Evil, right? Maybe. But it is these guys who make the initial development of the actual resort possible.

Peter, you are right. I can think of several gleaming stars, such as A-basin, Alta, and Beaver Mountain (UT), which still boasts its continued-family ownership. You might not have considered the first two as non-growers, since both have definitely grown. However, many resorts like Beaver Mountain fail to grow because they refuse to grow their market. No market growth, no terrain growth. And that is ok for some. But financially, it can be a very dangerous place to sit--for what does not grow, may wind up dying.

[Peter]

Mt. Baker is a great example, they have turned a profit every single year since they opened. They have been owned by the Howat family for a long time. Also, after this summer all 7 lifts will be modern quads. And no real estate, or even electricity for that matter!

[chasl]

Areas that are family owned probably have a slight advantage, with or without real estate.
Chances are they purchased the area and surrounding land when it was relatively inexpensive, paid for lifts with capital on hand and grew when they could afford it, now they are reaping the benefits of the higher land prices, higher ticket, food and liquor prices. Everyone else followed suit, so why not the family owned area with no real estate.
These costs went up because the developers came in, bought the areas at premium and started up with immediate and huge financial burdens
I agree the costs for insurance, fuel and equipment has also gone up, but it has for everyone, the ones that can weather the storm have no major financial obligation. Such as ASC had.

[Callao]

Chasl has made a good point. The small areas have been around since the beginning of the game. Can you name a new "small" resort? It's practically impossible (but one example may be Shames Mountain, BC, which started in 1990 after it literally moved from an inferior mountain nearby).

Small resorts fall small. Big resorts fall big. How does one start a resort these days? Lots and lots of hype! What have we heard lately? They are all starting to sound the same: ". . . .With a max build-out of 27 lifts, 6,207 feet of vertical, 9,500 acres (with 1,238,492,389.293846 acres of heli-skiing), 23,900 lodging units and 3.5 Billion dollars in new infrastructure . . ." blah blah blah. Jumbo Mountain, Mount Holly Club, Revelstoke. This is done specifically to attract financing. Small resorts just don't have a lot to say about themselves to investors.

Small resorts have had little or no growth in the last fifty years. Developers aren't concerned with sustainable growth, because frankly, they have no interest in playing this game for 50 years.

Peter adds Mt. Baker to the mix, which brings up another good point. All the "small" resorts mentioned above are blessed with a large population base. So I think I'll specify "small" as those resorts that are less-blessed. Consider Pine Creek, WY; Maverick Mountain, MT; Sitzmark, WA; or Ski Smithers, BC. Compare that to resorts of an equally-small population base: Crested Butte, Telluride, Jackson Hole, and Heavenly. If a resort doesn't have a population base, it has to market itself more. And part of that marketing is boasting future growth.

[Tin Woodsman]

Peter, on May 5 2008, 03:02 AM, said:

Mt. Baker is a great example, they have turned a profit every single year since they opened. They have been owned by the Howat family for a long time. Also, after this summer all 7 lifts will be modern quads. And no real estate, or even electricity for that matter!

When you get 600" of snow per year (no snowmaking or worries about lean years) and are less than 90 minutes away from a major skiing metropolis, it's not that hard. Unfortunately, few resorts fit that description.

[Peter]

In Idaho, Ski Resort's Promise Fades
By JUSTIN SCHECK
The Wall Street Journal
July 7, 2008

DONNELLY, Idaho -- The real-estate downturn is taking Western locales like this tiny mountain village down a familiar path: from boom to bust.

Construction halted at Tamarack village in Donnelly, Idaho after financing for the ski resort dried up.

A half-century ago, timber brought prosperity that ended abruptly in the 1990s. This time, a luxury ski development called Tamarack Resort has whipsawed the town's 158 residents.

Tamarack gained headlines in 2003 when it became one of the few new ski resorts to be approved in the West in two decades. From 2004, when its lifts opened and the first homes sold, through last year, buyers committed more than $500 million for condos, houses and building sites. Fancy homes brought a rush of money, with newcomers buying land for stores and restaurants. Landlords tripled rents.

Then, last winter, building all but stopped. While Tamarack's lifts continued to run, motel occupancy plummeted. Rustica, a gift shop, closed down this year. McPaws, an animal shelter, endured a funding crisis. According to state estimates, the May 2008 unemployment rate was 6.1% in Valley County, where the town lies -- nearly double the year-earlier rate. Idaho's May statewide unemployment was an estimated 3.6%.

"This place just quit," says Gordon Cruickshank, a Valley County commissioner.

The luxury-resort boom brought windfalls to once-sleepy towns throughout the Rockies, as developers planned resorts with secluded homes and memberships to golf and ski clubs. Banks such as Credit Suisse Group, which syndicated nearly $1 billion in loans to luxury developments in the West, fueled the boom.

A resort's success was often staked to real-estate sales: As a Tamarack lender recounted in recent court filings, the resort had a business model in which "operating expenses would exceed revenue and the primary source of profit would be generated by the sale of real estate."

When the bust came, Donnelly was hit hard. It didn't have much of an economic base before Tamarack. The town, 95 miles from Boise, had thrived on lumber until federal restrictions gutted the industry in the 1990s. A succession of developers failed to build a ski resort on Donnelly's West Mountain. Valley County had one of Idaho's highest unemployment rates.

Mexican developer Alfredo Miguel Afif began planning Tamarack in the late 1990s. He brought in Jean-Pierre Boespflug, a former executive at Cisco Systems Inc., as chief executive. Mr. Boespflug helped persuade Idaho's governor to support Tamarack's development plan, which got final approval in 2003.

Real estate in the area quickly boomed. Tennis stars Andre Agassi and Steffi Graf agreed to develop a Fairmont Hotel as part of the resort. Mr. Boespflug personally wooed prospective buyers, leading hiking tours. Construction attracted workers who spent at hotels, restaurants and bars. Idaho Gov. C.L. "Butch" Otter last year declared April 27 "Alfredo Miguel Afif Day."

Things abruptly changed in June 2007, Mr. Boespflug says, when he traveled to the East Coast to meet with another investor in Tamarack's planned Fairmont Hotel. Buyers had just committed more than $100 million for an initial offering of Fairmont condos, so "we were hoping to be greeted by big cheers and a check," he says. Instead, the investor, who had already put up money for the hotel, said, "'We don't have the money,'" Mr. Boespflug says.

The investor confirmed his group has decided not to put up any more money for the hotel, but wouldn't comment in detail because of legal proceedings.

Funding shortages forced the resort to slow construction on the base village and hotel. With Tamarack in danger of missing a payment to Credit Suisse, Mr. Boespflug arranged a $118 million credit line with French bank Société Générale.

But in February, amid weakening real-estate prices squeezed by the credit crunch, the bank withdrew the line "due to market conditions," says Société Générale spokesman Jim Galvin.

Tamarack went into default on its Credit Suisse payments. Business entities owned by Messrs. Boespflug and Miguel, which hold a majority ownership stake in Tamarack, filed for Chapter 11 bankruptcy in February. Credit Suisse followed with a foreclosure suit, seeking to take over Tamarack's majority-ownership stake, according to state and federal court filings.

Donnelly's boomtown air is gone. Tamarack and its contractors have laid off many. Jerry Frank, a Boise contractor who is part of the Tamarack Club -- $60,000 a membership, at current rates -- says he closed his Tamarack office. Mike Pannell, a developer who bought the Little Firefly Cafe this spring, says breakfast business is down about 40% from last spring.

Lani Anderson, who manages the local Long Valley motel, says occupancy has fallen at least 65%. "All I'm catering to now is the weary traveler, and there's not a whole lot of them with gas prices," she says.

Locals lament the town's fleeting promise. Lorie Mauk had moved back to the Donnelly area last year for a Tamarack job, having left the area years ago. But Tamarack laid her off in February, and she says the town's job situation is back to how it was before the resort brought prosperity.

Tamarack's base village is unfinished. The area slated for a Thai restaurant is roofless. The ski shop and pub are in plastic tents.

Home sales have withered, says Judy Land, a local real-estate agent. In 2006, 1,250-square-foot Tamarack cottages sold for more than $900,000, the resort says; Ms. Land says she recently sold one for $650,000.

The resort is continuing visitor operations over the summer, with lifts running for mountain bikers, and expects to run ski operations this winter. Ms. Land expects the resort to recover. But for now, she says, the few potential buyers "want to get away from the depression, from a resort that's in trouble."

[Callao]

Yikes! I guess this goes to prove what SkiBachelor said, that "Real-estate can't keep a resort alive forever." And apparently, in a volitile industry like this (real estate), one swing of misfortune can bring the thing to a hault in a matter of a couple years.

However, I do not believe that Tamarack is dead. As has happened before, if one owner is not willing to continue the project, a buyer will come in with new enthusiasm (and hype), and the project will restart where it left off. I think the owners of Tamarack will pull off making millions in this venture--but not this year, the next year, or the year after that.

[tahoeistruckin]

Callao, on Jul 22 2008, 10:58 PM, said:

Yikes! I guess this goes to prove what SkiBachelor said, that "Real-estate can't keep a resort alive forever." And apparently, in a volitile industry like this (real estate), one swing of misfortune can bring the thing to a hault in a matter of a couple years.

However, I do not believe that Tamarack is dead. As has happened before, if one owner is not willing to continue the project, a buyer will come in with new enthusiasm (and hype), and the project will restart where it left off. I think the owners of Tamarack will pull off making millions in this venture--but not this year, the next year, or the year after that.

tHey Built to much to soon. Look at DV. it has taken them over 25 years to get where they are now. Don't build it if you don't need it. Build it when you do need, if the market allows such a undertaking.
Tamarack wanted to ' start' at the head of the line, and now look where they are at.

[hoodoo]

From SAM Online

AGASSI GROUP CANCELS TAMARACK HOTEL PROJECT

SAM Magazine—Donnelly, Idaho, July 21, 2008—Andre Agassi and Steffi Graf, tennis stars and Tamarack Resort fans, and their investment group have decided against building a proposed Fairmont luxury hotel at the fledgling resort. The group cited Tamarack’s uncertain future as the reason for its decision.

Originally, the investment group planned to break ground this summer, but that date was pushed back one year after Tamarack encountered financial difficulties last March. Resort owners Jean-Pierre Boespflug and Alfredo Miguel Afif filed for Chapter 11 bankruptcy protection after investment bank Credit Suisse threatened to foreclose on a $260 million loan. The real estate downturn also worked against the project. Joel Goldman, one of Agassi's and Graf's partners, told The Associated Press, "Based on the pending litigation and current market conditions, we are not at this time proceeding with the project."

Tamarack is still hoping to work with Fairmont Hotels and the Agassis in the future, if and when it gets its financial affairs in order. The Agassis and the Fairmont are still interested in developing a hotel at the resort, according to Tamarack director of marketing and sales Ken Rider.

[Callao]

tahoeistruckin, on Jul 23 2008, 09:51 AM, said:

tHey Built to much to soon. Look at DV. it has taken them over 25 years to get where they are now. Don't build it if you don't need it. Build it when you do need, if the market allows such a undertaking.
Tamarack wanted to ' start' at the head of the line, and now look where they are at.

But on the other hand, there are no cut-and-dried rules for stuff like this. Really, when you take on a venture, you just never know what will happen. There is always a risk! A lot of this will have to do with timing. When the market is good, they'll have to be gung-ho like they've done; but they also need to be ever-wary about those market "signs" that indicate they need to change their strategy. Too many groups think they are invincible, and that they can buck the trends of a stagnant market.

Development projects that temporarily pull out--that is a strategy change, and is appropriate. However, the Chapter 11 thing is a real problem.

[jared@bogusbaisn]

almost a month old but ..

July 29, 2008
Tamarack plans to sell $670 million in bonds
Resort owners must find investors to buy the bonds before they get final state approval
Tamarack Resort in central Idaho hopes to sell $670 million in bonds to boost finances after a real-estate market slowdown brought construction to a standstill and chased off investors, including tennis stars Andre Agassi and Steffi Graf.

A state-created lending organization, the Idaho Housing and Finance Association, gave its preliminary blessing to sell the bonds, but said it would give no financial backing or support.

Jean-Pierre Boespflug and Alfredo Miguel Afif, who own the Donnelly-based ski, golf and lake resort, have sought bankruptcy protection and been sued in federal court by investment bank Credit Suisse over a $260 million loan default. Boespflug's Cross Atlantic Real Estate owns 48 percent of Tamarack, while Afif's VPG Investments has 27 percent.

Tamarack lobbyist Scott Turlington said Monday that the resort would use bond proceeds to complete unfinished buildings, make good on more than three dozen liens filed by unpaid contractors and repay debt to Credit Suisse to resolve the loan dispute. Afif is working with undisclosed institutional investors to buy the bonds, Turlington said.

"We're extremely encouraged by the process. This is one of several different fronts we're approaching in trying to do our refinancing," Turlington said.

Among unfinished projects at Tamarack is the six-building Village Plaza, a retail center that had been scheduled to open this year but stalled when funding collapsed.

Last month, Agassi, Graf and other investors cited unresolved court fights and market conditions when they ended a contract to buy Tamarack property for a proposed luxury hotel to be managed by Toronto-based Fairmont Hotels and Resorts.

A spokeswoman for Credit Suisse didn't immediately return phone calls seeking comment about the bond plan. Tamarack is among several resorts, including Montana's Yellowstone Club and Utah's Promontory, where the Swiss-based bank's investments have soured.

According to Tamarack's plan, revenue bonds would be issued by the Idaho Housing and Finance Association, which was created by the Legislature 36 years ago but isn't a state-supported agency. Interest from the bonds would be paid from the proceeds of Tamarack real-estate sales, while resort assets would be pledged as collateral.

The association, whose board of commissioners gave tentative approval to the plan Friday, said no state assets would secure the bonds.

"We go to great lengths in our legal documents with parties involved to explain that there is no backing and support from IHFA," said Gerald Hunter, the executive director. "They are asked to indemnify us of any issues that might arise in the transaction."

Tamarack asked the association to facilitate a bond sale because some institutional investors may have rules preventing them from making direct investments in real estate. By creating a registered security through the lending organization, Tamarack can appeal to large pension funds that may be flush with cash but want an additional layer of structure and scrutiny for the transaction, Hunter said.

A pair of public meetings - one in Boise, one in Cascade, a town near the resort - are planned for mid-August to gauge regional sentiment for the bond-sale plan. Should Tamarack find an investor, the board of commissioners still has to give its final approval, unlikely to come before September, at the earliest.

"There's still a lot to be done," Hunter said. "Most important in this is: Tamarack needs to find an investor to put their money into the project and facilitate the refinancing."

If the transaction succeeds, Hunter said it would be the first time the association has overseen a bond sale to promote economic development since Idaho lawmakers in 2007 voted to allow the association to handle such projects.

Boespflug said it's premature to say the resort will actually sell the bonds. Boespflug said an "inducement resolution" is being prepared, which is simply a step in the process of preparing for a bond sale. Over the next few weeks documents must be prepared for examination by potential buyers.

The possible bond sale is "good news," Boespflug said. But he added, "These documents still have to be written up and offered to bond purchasers. Then we'll know if the bonds will be purchased. It's not like there is any money in the bank yet."

Reviving Tamarack's fortunes could help reinvigorate property, sales and income tax revenue for state and local governments and bolster employment in Valley County. Since Tamarack construction stalled last year, county unemployment has risen to 6.1 percent, compared with Idaho's 3.8 percent average.

"Obviously, Tamarack is a big economic driver for the state," said Jack Beebe, a commercial real-estate company owner and chairman of the association's board of commissioners, who are appointed by the governor. "Wherever we could help, we wanted to do it."

Statesman business reporter Joe Estrella contributed to this report.

[CH3skier]

Maybe the former executives from ASC could show them how fix the problem.

This post has been edited by CH3skier: 26 August 2008 - 03:42 PM

[Peter]

Bank threatened to take ski lifts from Tamarack
By Associated Press
BOISE (AP) - Bank of America threatened to remove two ski lifts after Tamarack Resort fell behind on lease payments, prompting the central Idaho development's majority owners to promise to cover future shortfalls.

"They gave us due notice," said Ken Rider, Tamarack's spokesman. "We immediately opened the communication channels. Obviously, those are very important to our overall resort experience."

The resort's board, which includes Alfredo Miguel Afif and Jean-Pierre Boespflug, is now making sure lease payments for the Buttercup and Wildwood lifts are made, Rider said Wednesday.

Afif and Boespflug's companies that own a majority of Tamarack sought bankruptcy protection after lender Credit Suisse sued over missed loan payments earlier this year.

They're now trying to find a new investor and Boespflug could exit management.


________________________________________________________________________________
____________________________________________



Banks start foreclosure on Tamarack buildings, threaten to pull lifts


Associated Press - September 10, 2008 10:14 PM ET

BOISE, Idaho (AP) - Banks have begun foreclosure proceedings on two properties inside Tamarack Resort and also threatened to remove two ski lifts, further signs of financial woes at the central Idaho vacation development.

A sheriff's sale is planned for the resort's three-building Arling Center conference complex and for an employee housing facility - after Bank of America and Sterling Bank began foreclosure proceedings.

Meanwhile, Bank of America forced Tamarack's owners including Jean-Pierre Boespflug and Alfredo Miguel Afif into a new agreement to cover lease payments for its Wildwood and Buttercup lifts.

Separately, Boespflug conceded he may be forced to quit as chief executive officer to lure a new investor. The resort also may be sold.

All this comes after companies owned by Boespflug and Afif sought bankruptcy protection earlier this year when Credit Suisse Group went to court to foreclose on the resort after it defaulted on a $260 million syndicated loan.

With real-estate sales slumping, construction at the site 90 miles north of Boise is at a standstill. Tennis stars Andre Agassi and Steffi Graf have bailed out of a luxury hotel project and Boespflug and Afif are seeking new investors.

[SkiBachelor]

So Whitewater became the Buttercup lift. I guess the name Whitewater was a little to extreme for beginner terrain.