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Thread: Saddleback Mountain Sale

  1. #31
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    Update on current negotiations

    https://www.pressherald.com/2019/07/...of-saddleback/

    Despite the claim that the two events are separate, no doubt there is some tie. My pure speculation is the current owner is looking at a significant loss and therefore has to decide if they want to sit on it longer and hope for a better offer or take the write off on this one.

  2. #32
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    Agreed. Too coincidental given that negotiations had stalled because the resort was not eligible for a federal Opportunity Zone tax credit.

  3. #33
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    Looks like the Berry's finally decided to sell to the Boston firm. In the past they wanted to pay less then the Berry's were willing to sell for.

    https://wgme.com/news/local/report-s...en-this-winter

    The headline title in the address is misleading. The article is about the sale not when it will reopen. The main chairlift is reportedly in need of replacement. Given the time of year, I suspect that full operation is at least one year out. The business plan has not worked for many years and a past third party evaluation indicated that the only plan that worked was a massive investment in the region to make it destination resort. The big question is what will the new owner do that hasn't been tried in the past?

  4. #34
    Senior Member Hillwalker's Avatar
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    I warmly remember the old "Bronco Buster Competition" days. Used to love skiing there before lift lines existed. Hope it finally reopens some day.

  5. #35
    Senior Member Vermonster's Avatar
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    Saddleback and Rangeley just can't seem to catch a break.
    https://www.newenglandskiindustry.co...hp?storyid=805

    REPORT: Saddleback Buyers Still Millions of Dollars Short
    Donations are being sought for a pre-Christmas transaction deadline.
    Sunday, December 8, 2019, NewEnglandSkiIndustry.com
    While the Saddleback sale agreement continues to move forward, WGME reports the group buying the defunct resort is facing a $2 million shortfall with just over a week to go before a major deadline.

    The non-profit Saddleback Mountain Foundation is collecting donations to help close the gap. In addition to the pre-Christmas target, another $2 million is reportedly needed by the end of January. Appeals are reportedly being made to area condo owners to contribute funds to prevent the deal from falling through.

  6. #36
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    This is quite an interesting turn of events. Given that there are significant capital and maintenance investments that will need to be made, plus up front money to get the place restarted, it is a bit disturbing that they are going out to the public to get potentially two rounds of donations especially with such a limited time window. If they were a non profit coop that would be one story although I expect the Mad River Glen $2000 membership and $200 minimum yearly commitment would not cover the purchase. It sure looks like a desperation pitch. My question would be does it make sense to transfer it to another financially shaky buyer hoping that it might reopen rather than let the current owners keep it on the market and possible drop the price to the point where another entity can buy it and run it at profit?. Arctaris has signed a deal with Finance Authority of Maine for Opportunity zone projects so they stand to make a buck if they can pull it off. I don't see an offer being made to those who donate to participate in any future profits.

    One of the observations I have seen with respect to another struggling Maine ski resort, Mt Abrams, was that one of the recent owners was quoted when he bought it at auction that sometimes a ski resort has to go through a couple of bankruptcies to get the price down to the point where it can run profitably. It would be interesting to see the recent prices of the ski resorts sold over in NH and see if it was the prior purchase by American Skiing Corporation and subsequent bankruptcy by ASC dropped the price of these resorts so that the recent owners could make a buck? The Berry's stepped in and "saved" the resort after the prior owner got a controversial large one time cash out from the federal government by successfully greenmailing the AT corridor which allowed him to drop the price considerably. Prior to the greenmail, a third party study by ski area "experts" funded by the fed and ATC concluded that the resort would not be viable with the exception of massive development of a destination resort. This didn't happen then and the closure was result of the current owners not generating enough profit to able to cover expenses.
    Last edited by peakbagger; 12-09-2019 at 02:07 PM.

  7. #37
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    It's unclear to me and not defined in the article or this thread what this non profit's role is and how it fits between the seller and the presumptive buyer.
    Steve H.
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  8. #38
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    A bit more info but doesn't clarify the tie between the developer and the foundation

    https://wgme.com/news/local/saddleba...-sale-deadline

    Frequently a developer is just a "cheerleader" getting other folks to invest money in project. If they pull it off they get portion of the profits. They are effectively putting in their "sweat equity" in lieu of an investment. Generally the investors and banks wants the developer to have "skin in the game" so that if the project fails, the developer has in theory lost actual money which in theory motivates them to make sure it succeeds. In reality usually it takes quite awhile for things to go bad and the developer has long since cashed out but that is the concept. They cant borrow the money for the "skin" but in many cases they figure out a way of using someone else's money in lieu of their own "skin". Pure speculation on my part is the requested donations are way of funding the "skin"?.

    Over the last few years the Saddleback Mountain Foundation has been pretty open that their goal is reopen the mountain. Their supporters are reportedly condo and recreational housing owners who have substantially lowered property values with the resort closed, local businesses who have lost a big part of the winter business, real estate agents and possibly local workers. I would expect someone would be hard pressed to sell a slopeside condo located 4 miles in on what I think is a private road next to a defunct ski area. If the donation had any stings attached like free lift tickets then it might be treated as a backdoor loan.

    Here is link to local Saddleback listings. https://www.morton-furbish.com/saddl...lake-listings/

    That is what realtors are asking, I expect actual transaction prices are going to tell a different story.
    Last edited by peakbagger; 12-10-2019 at 07:46 AM.

  9. #39
    Senior Member skiguy's Avatar
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    Quote Originally Posted by peakbagger View Post
    A bit more info but doesn't clarify the tie between the developer and the foundation

    https://wgme.com/news/local/saddleba...-sale-deadline

    Frequently a developer is just a "cheerleader" getting other folks to invest money in project. If they pull it off they get portion of the profits. They are effectively putting in their "sweat equity" in lieu of an investment. Generally the investors and banks wants the developer to have "skin in the game" so that if the project fails, the developer has in theory lost actual money which in theory motivates them to make sure it succeeds. In reality usually it takes quite awhile for things to go bad and the developer has long since cashed out but that is the concept. They cant borrow the money for the "skin" but in many cases they figure out a way of using someone else's money in lieu of their own "skin". Pure speculation on my part is the requested donations are way of funding the "skin"?.

    Over the last few years the Saddleback Mountain Foundation has been pretty open that their goal is reopen the mountain. Their supporters are reportedly condo and recreational housing owners who have substantially lowered property values with the resort closed, local businesses who have lost a big part of the winter business, real estate agents and possibly local workers. I would expect someone would be hard pressed to sell a slopeside condo located 4 miles in on what I think is a private road next to a defunct ski area. If the donation had any stings attached like free lift tickets then it might be treated as a backdoor loan.

    Here is link to local Saddleback listings. https://www.morton-furbish.com/saddl...lake-listings/

    That is what realtors are asking, I expect actual transaction prices are going to tell a different story.
    This is interesting info. Do you have any insight on how this is set up to be a non-profit? I know non-profits come in many flavors but this must be an interesting arrangement.
    "I'm getting up and going to work everyday and I am stoked. That does not suck!"__Shane McConkey

  10. #40
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    Not sure what you mean by the non profit reference, Arcteris is not a non profit. As for Saddleback Mountain Foundation they are a 501 c so they can take donations. Did you perhaps intend to clip the prior post from srhigham? He did mention non profit

    Here is a link to some info on the Saddleback Mountain Foundation makeup https://www.charitynavigator.org/ind...&ein=820691811

    A 501C can take tax deductible donations. Not sure how the details work out on getting the money into the transaction. My guess is the Berry's do not care where the money comes from so there must be some way for it to end up in their pockets. As for how Arcteris leverages the donations I really dont know. I expect that if it happens the closing will be lot of lawyers in room handing lots of documents around the table with everyone dependent on every other one.

    Given their 2018 listed assets it does not look like SMF are flush with cash. The listed address is a residential home in Portland so my guess is its a condo or ski house owner hoping for a reopening. I was surprised it isnt a Rangeley address.
    Last edited by peakbagger; 12-10-2019 at 03:51 PM.

  11. #41
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    Far more information $5,500 a pop from condo owners.

    https://bangordailynews.com/2019/12/...evitalization/

    One more link with even more detail, Renovated lodge and future hotel

    https://www.theirregular.com/article...sing-the-deal/
    Last edited by peakbagger; 12-11-2019 at 08:01 AM.

  12. #42
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    Do they really think condo owners are part of the distressed community?

  13. #43
    Senior Member Mike P.'s Avatar
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    Quote Originally Posted by egilbe View Post
    Do they really think condo owners are part of the distressed community?
    It's all relative, their condos have lost value, You can't get college kids to rent them for parties through Airbnb, You can't move Saddleback closer to population centers so the value is likely to remain low, they feel distressed. (I understood what you meant for people with 2nd homes, although not everyone who owns a vacation condo or timeshare is living fat off the hog)

    Before I wrote a $5,500 check I'd want to talk to my tax accountant and a lawyer to be sure this payment would be deductible on my home state and federal taxes. (Thinking just on Federal, maybe) If this plan fails, I am a pessimist at heart, do I have any legal recourse or are the developers likely to file Chapter 11 & I might get pennies on the dollar. $5,500 in small bills makes very good kindling.

    There are very few places one would call population centers where Saddleback is the closest ski destination. In many cases, places like Loon, Bretton Woods, Stratton, Killington are closer or offer more in either terrain or amenities. Is Saddleback a partner with other resorts in Maine so I can ski at Sugarloaf one day and then Saddleback another? It's about an 50 minutes to drive from Sugarloaf to Saddleback. Almost 90 minutes from the Sunday River area. Assuming they don't impact the AT corridor, I wish them well, I am pessimistic they will get the economic development that prospective buyers and owners are hoping for though.
    Have fun & be safe
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