I am not an investor in KSL. A friend of mine sent me that letter. From their website it appears that they own mainly golf resorts and a lot of them over the years. When Cushing first died I did get what info I could on the resort and I was initially putting together a group to potentially try and buy the resort. The more work we did the less we were willing to pay. Then Vail came in and bid a number more the 2X what we thought it was worth. I feel confident that KSL paid less that that number because Squaw has had 3 terrible years in a row. The ski resort business is a very difficult one, mainly starting with the weather. In tahoe 35% of your revenues come over the Holiday season from 12/20 through 1/2. 3 years in a row there was no snow on the ground until mid to late december. It absolutley destroys their profitability for the entire year. The real kicker in owning a ski resort is the RE devlopment opportunities. Squaw really has very limited RE development land. The bulk is in the parking lot where they built the Village at Squaw, a condo complex. This was poorly designed and overpriced. The last two phases sold poorly and they had two more phases that never got built. Not sure if this ever gets revived. Squaw also has $100m of deferred cap ex that needs to get spent to upgrade the mountain. Looks like KSL has committed to spend half that amount which will be a great start.
The good news for Squaw is that Phil and Snowhot have moved to the area and they have clearly brought the eary season snow with them!! Life is good in Tahoe right now!!
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