The assistant had a ready answer: “Why shouldn’t a ski area be treated the same as a Renoir, a Monet, a racehorse?”
He was part of an impeccably groomed crew from the luxury real-estate auction house J.P. King, home office, Gadsden, Alabama. The auctioneers had done the slick, four-color marketing, hired the pianist and the caterers (beef brisket and fall-off-the-bone ribs), supplied the bidder paddles, the real-time screen projection, and of course, the honey-tongued auctioneer, Lanny Thomas.
When I put the auction question to resort co-owner Steve Bailey, he sidestepped, saying instead, “It’s been a delightful run. It’s time to retire. It’s time for someone else to take Powderhorn to the next level.”
Rumor was, Powderhorn had been on the market, unofficially, for the last couple of years. Bailey hadn’t gotten his price, apparently. But he didn’t seem desperate. The skier numbers, at 75,000 to 85,000 per year, mostly Grand Junction locals, were enough to break even. The ski school and junior race programs were solid. More than a few geezers cruised the spacious aspen woods daily.
Perhaps crucially, Bailey and partner Dean Skalla (Ridgway neighbors on Log Hill) had not managed in the 11 years they owned the place to develop the 700-acre golf course community downhill of the lifts. Maybe they didn’t have the capital? At any rate, Bailey had a second heart attack in June, which cinched it; the auction would take place August 4, and it would be “absolute.”
Lanny went to work in a room packed with 200 people, most, like me, just gawkers. “By a show of hands,” he began, “how many people in the audience live in the area or someplace else?” He didn’t get very many hands, so he knew we weren’t listening carefully enough.
He slid into an explanation of how things were going to work. This wasn’t going to be the kind of auction where “pulling your ear or scrunching your nose means you are making a bid. We don’t do that at real-estate auctions. So those of you pulling at your ears or scrunching your nose, you can relax.
“Alright, ladies and gentlemen, let’s get started. Group One, consisting of the ski area itself (its three chairlifts, day lodge, restaurant, ski school, rental and retail shops, rolling stock, etc.). Ladies and gentlemen, if you ever wanted to get in to this business, now is the time. You’re going to get a bargain.” That turned out to be an understatement.
He opened the bidding at $1 million. Silence. He went down to $750,000. Deafening silence. Finally, one of the four bid assistants (in matching crisp white shirts and ties) brought in a bid of $75,000. “He wants to rent the ski area,” Lanny joked, to nervous laughter.
The bid eventually worked its way back up to $500,000, which still seemed ridiculously low. The unidentified high bidder brandished paddle number 305. There had been rumors earlier that former Vail Associates President Andy Daly was in the room. This wasn’t him.
But not to worry, this was only Round One. There were potentially two more rounds. And there were many smaller properties on the block as well. Group Two, for example, consisted of the Inn at Wildewood, a 16-room hotel and restaurant. Lanny wanted to start it off at $500,000. Then had to retreat to $400,000 and $300,000. It posted a bid, finally, of $105,000. “Evidence,” Lanny said into a mic that was practically a part of his chin, “that it is the absolutely right time to buy real estate!”
Group Three consisted of close-in multi-family and resort infrastructure lots. Group Four contained just one thing, the Mountain View Condo Foundation. The foundation and underground parking had been poured, but there the project had stalled. It went for $50,000.
Group Five brought out the most small-player interest. It included 15 lots, sold separately, in the Wildewood Subdivision, which already has a dozen or more houses poking out of the oak brush. Locals looking to get a start on their own ski cabins pounced on these. They went for a low of $5,500 and a high of $35,000, for the most desirable building site.
Group Six was the biggie, the potential golf-course parcel. Lanny started off at $1.5 million but didn’t get a bid until he’d dropped all the way down to $250,000. It posted at $300,000.
Round Two re-bidding added to the totals for some parcels. But the numbers were still stunningly low. Was this a particularly stingy or crafty group? Or a sign of genuine economic distress? Lanny admonished the crowd with his personal history of working through four recessions. “You’ll only regret not doing it if you don’t do it,” he said sagely.
Andy Daly did appear during the re-bidding, his sharp features and prematurely white hair, huddling with bidder 305, the Round One high bidder for the ski area. Daly and the two Gart Brothers, Tom and John, eventually upped that offer to $525,000, and bumped the golf property up to $750,000. With 10 percent added for J.P. King, Daly’s Powderhorn Partners LLC paid a total of $1.4 million for the working ski area and 700 private acres – about what you’d shell out for a nice, two-bedroom condo in Mountain Village, or a level building lot in the Town of Telluride. Not exactly Monet territory.
Daly said all the right things afterward. He called Powderhorn a “diamond in the rough” and promised some improvements to lifts and snowmaking by this coming winter.
Geezer skiers pronounced themselves pleased to have an owner with so much industry experience.
But the man sitting behind me, 88-year-old 10th Mountain Division veteran John Jennings, shook his head. Jennings worked for Poma 25 years ago when the French lift company installed Powderhorn’s No. 1 chair, a fixed-grip quad. “That seems pretty low,” he said of the sale price. “That’s about replacement price for that chairlift out there.”