New England Jay going for sale!

[Green08]

There were leases to pay off. Maybe that wasn't included? Don't know, what figure are we talking?

Vail got Okemo, Sunapee, and Crested Butte for $82 million.

Okemo has been doing about 600k visits and Sunapee 300k a year. Both seemed extremely well managed, had been making improvements, and gaining accolades in and outside the ski business world.

I just don’t see how Jay can remotely argue for a value as high as the EB5 debt requires (and debt is essentially what those obligations have become).

 

[Green08]

Burke might be worth more in a fire sale.

Literally burn the hotel down, collect the insurance, and then sell.

 

[Crank]

Sunape is owned by the state of New Hampshire and is now operated by Vail.

 

[Mike Thomas]

Sunapee is owned by the state of New Hampshire and is now operated by Vail.

That's kind of like saying Stowe is owned by the state of Vermont and operated by Vail. The NH owns the land and leased it to the Muellers, who sold to Vail, Stowe is the same. At the end of the day, it's owned by Vail for all intents and purposes.

 

[Crank]

Though I don't think Vail bought it, Spruce Peak is on private land. Development opportunities are more limited at Sunape, though I believe NH is allowing vail to complete an expansion planned by the Muellers. Not sure if any real estate development is involved in that expansion... if there is, it will be fought against tooth and nail by most locals.

 

[RJS]

There were leases to pay off. Maybe that wasn't included? Don't know, what figure are we talking?

Vail got Okemo, Sunapee, and Crested Butte for $82 million.

Reading the press release for when the acquisition closed, vail paid $74 million for Okemo, Sunapee, and Crested Butte, plus $155 dollars that Vail paid to Triple Peaks to pay off their leases with Ski Resort Holdings, LLC. So in total, Vail paid $229 million for Okemo, Sunapee, and Crested Butte. Just wanted to clear that up.

Vail paying $229 million for those three resorts, and ~$45 million for Stowe minus the real estate makes a valuation around $100 million for Jay Peak + the real estate seem more justified. Will they actually get that valuation? I don't know. I agree that in terms of location and skier visits, Jay Peak probably doesn't come close to Sunapee + Okemo, but like many have talked about, having Tremblant and Jay Peak could help corner the Montreal market for Alterra. Jay Peak probably also attracts a larger share of hardcore skiers than most East Coast resorts, hardcore skiers that could influence where their family goes on vacation. These are the people who will want to be taking trips out west to Jackson, Mammoth, and CMH...

 

[Green08]

West Bowl expansion at Sunapee has gotten reapproved last I read. It is basically all on private land, but real estate ventures were not a part of the proposal.

In essence they are hoping at greatly expand high speed accessed upper mountain intermediate terrain.

Plans called for a bubble six pack at the main base, and moving the current HSQ to the new zone.

 

[Wilhelmson]

Reading the press release for when the acquisition closed, vail paid $74 million for Okemo, Sunapee, and Crested Butte, plus $155 dollars that Vail paid to Triple Peaks to pay off their leases with Ski Resort Holdings, LLC. So in total, Vail paid $229 million for Okemo, Sunapee, and Crested Butte. Just wanted to clear that up.

Vail paying $229 million for those three resorts, and ~$45 million for Stowe minus the real estate makes a valuation around $100 million for Jay Peak + the real estate seem more justified. Will they actually get that valuation? I don't know. I agree that in terms of location and skier visits, Jay Peak probably doesn't come close to Sunapee + Okemo, but like many have talked about, having Tremblant and Jay Peak could help corner the Montreal market for Alterra. Jay Peak probably also attracts a larger share of hardcore skiers than most East Coast resorts, hardcore skiers that could influence where their family goes on vacation. These are the people who will want to be taking trips out west to Jackson, Mammoth, and CMH...

Thank you, that makes sense.

 

[Green08]

So in total, Vail paid $229 million for Okemo, Sunapee, and Crested Butte

That does change the valuation a lot. But, if anything it makes the financial impossibility of Jay being $250 million all the more obvious. Alone, Jay is not worth what Vail paid for the three Triple Peaks properties.

 

[LKLA]

That's kind of like saying Stowe is owned by the state of Vermont and operated by Vail. The NH owns the land and leased it to the Muellers, who sold to Vail, Stowe is the same. At the end of the day, it's owned by Vail for all intents and purposes.

Vail only acquired the ski and retail assets related to the mountain operations (lift-ticket offices, retail and rental spaces, ski school,...). It did not buy the extensive real estate or land.

In the case of Sunapee, which Vail cares little about, it basically bought the right to run/operate it. For example, Vail can not use Sunapee as collateral in an asset-backed loan.

 

[LKLA]

That does change the valuation a lot. But, if anything it makes the financial impossibility of Jay being $250 million all the more obvious. Alone, Jay is not worth what Vail paid for the three Triple Peaks properties.

Vail paid $237M for Triple Peaks ($82M for mountain operations and $155M to pay off the leases), which was about 10X the combined annual EBITDA of the three resorts.

There is NO way Jay comes even close to doing $25M in EBITDA a year.

And, even if we ignore that it needs a couple of years of deferred CAPEX, that it has a "remote" location, that it includes a ton of non-ski stuff with very high maintenance run rate, that it has persistent staffing issues - in other words, that it is not exactly a prime deal - and we go ahead and apply the high end of the multiple, it would still yield a much, much lower price than $250M.

Also keep in mind that the receiver NEEDS to sell, so Jay is not exactly in the driver's seat. It's always good to go into negotiations with the upper hand and I am not sure that is the case for Jay here.

 

[Crank]

https://www.burlingtonfreepress.com...an-go-250-million-repay-investors/2528411002/

 

[Erik Timmerman]

I wonder if this is why there hasn't been a sale yet.

https://vtdigger.org/2019/03/11/jay...nt-saveur-valley-resorts-owes-80m-eb-5-fraud/

 

[TheArchitect]

I wonder if this is why there hasn't been a sale yet.

https://vtdigger.org/2019/03/11/jay...nt-saveur-valley-resorts-owes-80m-eb-5-fraud/

I can't imagine a potential buyer is going to want to act until this is resolved. So much for a quick sale.

 

[Black Dog]

Interesting Reading

https://jaypeakreceivership.com/wp-...dhbAycNxzu9Yu_x2Bovgadda8DwTtqPrLYtCJgoYddtEU

 

[sparty]

Also interesting, with more (press conference in Newport) to come at 2 p.m. EDT today:
https://vtdigger.org/2019/05/21/criminal-charges-expected-week-jay-peak-eb-5-fraud/

 

[New2]

In the case of Sunapee, which Vail cares little about, it basically bought the right to run/operate it. For example, Vail can not use Sunapee as collateral in an asset-backed loan.

But Triple Peaks was able to get cash out of Sunapee by "selling" to CNL, who then sold to Och-Ziff... does REIT vs. asset-backed loan matter much? Is there a significant difference between Sunapee's situation and the many other resorts on public land (including Jay & Okemo on state forests, and Crested Butte on national forest land)?

 

[James]

Isn't Sunapee still owned by the State? More than just the land. One big difference is the sale of the lease had to be spproved by the State.

 

[mdf]

Isn't Sunapee still owned by the State?

I think so. But the question is, "Is that a distinction without a difference?". Is the difference who owns the infrastructure, even though the government owns the land underneath it in most cases?

 

[Mike Rogers]

RCR (Resorts of the Canadian Rockies) own Fernie, Kicking Horse and I think Kimberly. They are known to throw money around like manhole covers.

And Nakiska? Or maybe they just manage it.

Yeah, Murray Edwards is pretty frugal. Super deep pockets, but even in the oilpactch CNRL is known for being a bit tight.

Charlie Locke liked to spend, but we know how that ended....happy he was able to get Louise back.