KSL/Aspen’s new Death Star conglomerate shoots down California’s signature mountain — and much of the dream dies with it.
You all know the Dave McCoy story, right?
The 101-year-old Hemingway protagonist found dormant a mountain range rising from the Mojave and decided to not only make it his home but built California’s signature ski resort.
Tuesday, another chapter — perhaps the final chapter — of that legacy came to a disheartening close.
In 1996, Intrawest Corporation and McCoy’s Mammoth Mountain Ski area announced that Intrawest had purchased 33 percent of Mammoth and neighboring June Mountain ski operations, as well as all of the developable real estate owned by Mammoth Mountain Ski Area. By 1998, that ownership stake was upped to 58 percent and resulted in the construction of The Village at Mammoth, a sort of late-’90s faux European-style village made popular in Whistler, Intrawest’s flagship property at the time.
Some rough fiscal years in the early ‘00s followed and in February of 2005, after 68 years building Mammoth with his literal bare hands, McCoy announced his retirement and sold the majority of the resort, including the Intrawest stake, to Starwood Capital Group (not to be confused with Starwood Hotels & Resorts Worldwide, though it did partially own the hotel group until 2003.)
Greenwich, Connecticut-based Starwood, it should be noted, was a relatively hands-off owner, keeping much of Mammoth’s operations group in tact and letting the 3,500-acre ski resort run much like the family business it was originally. After many of the village’s shops and restaurants folded in the wake of the 2008 financial crisis, area business owners came in and started replacing chain stores with their own wares and breathing in new, locally infused life — returning the spirit of the McCoy family into the resort complex.
That all changed as the Colorado-based private equity firm, which has been constantly berating and insulting the intelligence and setting off the bullshit detectors like junior high school fire alarms of the residents of the Tahoe Basin with lies about traffic mitigation standards and plans to build a water theme park over a parking lot over a meadow that needs restoration at the base of Squaw Valley USA, announced its second major acquisition in as many days this week …and it’s only Wednesday.
Maybe Andy Wirth is a god.
KSL Capital Partners along with new partner Aspen Skiing Company, the newly formed group that took embattled Intrawest off the hands of its giant Japanese telecommunication company for $1.5 billion Monday, picked up Mammoth Resorts, the owner of Mammoth Mountain Ski Area, Snow Summit, Bear Mountain and June Mountain. A price has not yet been disclosed, but industry valuations have Mammoth in the $500 million range which puts KSL/Aspen at the $2 billion stratosphere — and you thought your bumping up to premium cable in time for the final season of The Leftovers was a splurge.
To put this in perspective, industry insiders say the four Mammoth ski areas account for just over 2 million skier visits a year. Squaw and Alpine is notching up towards one million. California in total boasts around 6.5 million skier visits/year, which means KSL has now nabbed almost half that traffic. Vail’s Tahoe resorts (Northstar, Heavenly and Kirkwood) combine for about 2 million — so two mega-companies will now have 5-plus million of the state’s 6.5 million skiers under their care. In other words, #SkitheIndependents is about to start trending.
In light of the acquisition, the gun-to-the-head/nobody-would-actually-say-anything-like-this-in-real-life mountain town PR machine started working overtime Wednesday morning: “Mammoth has been Southern California’s mountain home since 1948,” said Rusty Gregory, Chairman and CEO of Mammoth Resorts. “After doubling down on our offerings to Southern California with the purchase of Snow Summit and Bear Mountain in 2014, joining this new venture led by Aspen and KSL is the next logical chapter in the story of Mammoth Resorts.”
Um, no. That’s like saying, “After I divorced my relatively level-headed and caring spouse, I decided to hop straight into the sack with a STD-addled pyromaniac with body dysmorphia and a cutting fixation triggered by songs from The Offspring, because, you know…gotta try everything once.”
Then Gregory goes on to talk about something that clearly shows he either has no interest in neighboring ski towns or doesn’t get wifi in Mammoth Lakes.
“This new platform, built around a collective passion for the mountains and our commitment to the people who visit, work and live there, is exactly what the ski resort business needs. I am excited about the future prospects for Mammoth Resorts, our people and this new enterprise.”
There is no “new platform.” Unless the private equity firm model of pillaging, parting out and eventually ending efforts at placation, is now a …platform. Click on this New York Times infographic to see how these firms are in the business of doing one thing and one thing only: Making their top brass ultra-wealthy, Big Ern-style above-the-law wealth: “Stephen A. Schwarzman, a co-founder of Blackstone, took home the largest haul last year: nearly $800 million. He and other private equity executives receive more annually than the leaders of Facebook and Apple, companies that revolutionized the way society communicates. The top executives at those six publicly traded private equity firms earned, on average, $211 million last year — which is about what Leon Black, a founder of Apollo, received. That amount was nearly 10 times what the average bank chief executive earned, though firms like Apollo face less public scrutiny on pay than banks do. Private equity firms note that much of their top executives’ wealth stems from owning their own stock and that they have earned their fortunes bringing companies back to life by applying their operational and financial expertise.Yet even as private equity’s ability to generate huge profits is indisputable, the industry’s value to the work force and the broader economy is still a matter of debate.”
So, as the Tahoe Basin continues to rage against the KSL machine which is using every private equity trick in the book to alienate locals, provide an inferior product for the end user and bolster their portfolio to stage for some kind of massive sale (it’s important to note that KSL just grew its total investment footprint by more than a quarter this week…yet there are still much much bigger fish to ingest them, see: Blackstone and Apollo) there will be some kind of mega-resort pass featuring recent acquisitions to compete with Vail Resorts’ EpicPass, but the skier, and the environment, is only going to suffer.
…Which is how we come full circle to a little history lesson on Dave McCoy because it’s important to know KSL stands for everything he’s against: El Segundo-born Dave McCoy was the son of an oil rig worker. He was 13 when he first glimpsed the Eastern Sierra and promptly returned home to cut his first pair of skis in shop class. After graduating high school, McCoy made haste to make the Sierra his permanent home, moving first to Independence and then a few miles up the road to Bishop. He took a job as a surveyor and hydrographer for the LA Department of Water and Power and joined the Eastern Sierra Ski Club. By the time he was in his early 20s, McCoy had fashioned himself into the state champion in skiing.
In 1938, at the age of 23, McCoy hooked up the back axle of his old Model “A” Ford truck with a looping wire and sent a rope-tow up McGee Mountain just a click off Highways 395, the arterial road that runs up the Eastern Sierra connecting the Los Angeles Basin to Truckee Meadows. Today, remnants of the rope-tow remain and the site features a historical marker along the 395.
Though business was slow — days on McGee often resulted in McCoy drawing lines over his own tracks — the West Coast ski pioneer had his eyes on expansion and went to the local bank for an $85 loan. He was turned down for the money but given a chance by the bank’s secretary, Roma. He and Roma married and went on to have six children. She, at 95, is still alive today as well.
In the early ‘40s, the Forest Service was keen on developing Mammoth Mountain, which rose to 11,000 feet a few miles away from McGee. McCoy, again strapped for cash, convinced the Forest Service to give him a conditional permit to develop the area and Mammoth opened with a 12’ x 24’ dirt floor ski lodge (which also doubled as the McCoy family home) in the fall of 1953. McCoy, with the help of family and friends, rigged a used chairlift at the mountain’s base. Chair 1 first turned Thanksgiving of 1955 shortly after Mammoth was officially incorporated. By the late ‘70s the resort had 14 chairs and McCoy owned a small airline which flew in Angelinos and their Salomon SX-90 rear-entry boots, progressive lens Vuarnets and OLIN Mark IV Comp Classic Orange Mogul Freestyle Skis w/ Salomon S727 bindings (yes, I grew up in Southern California and this was my father’s kit.)
Nothing ever stays the same. And this uncommonly awful era of hateful partisanship and a government — from the top down — is most distinctly marked with individuals lives being controlled by heavily leveraged individuals in power, be it a foreign adversary or massive corporate interest. There literally is no opportunity, even in the Golden State, to start turning a rope tow using axle grease and the sweat dripping off your square jaw and build an empire.
It would be snuffed out instantly.
Fortunately for Dave McCoy and family, it took seven decades to see the dream die.
Unfortunately, he lived to see it happen.