Vail to take over New Hampshire resort

By Ray Carbone

NEWBURY, N.H. – The public meeting held at the Sunapee Lodge on the Mount Sunapee Resort property last week was much less contentious than a similar one held in the same building last year.

At the earlier gathering, more than 100 people came to the state’s Department of National and Cultural Resources (DNCR) meeting to voice their opposition to the transfer of the resort’s recreational lease to Och-Ziff Real Estate. The multi-national alternative asset management firm had recently paid the federal government $413 million in fines, and supporters of the local resort were concerned that the organization would not manage the local property appropriately.

Things were much different last Wednesday, July 25, when an even larger crowd came together to voice their support to Sarah Stuart, the DNCR’s commissioner, for a proposal to turn Mount Sunapee’s lease and operating agreements over to Vail Resorts, operators of the famous Vail Mountain Resort in Colorado.

‘Candidly, Vail is a dream partner.’

Hessler Gates, Sunapee resident

The deal is part of an $82 million sales agreement that will also add Vermont’s Okemo Mountain resort and the Crested Butte Mountain Resort in Colorado to the Vail, Colorado company. (Vail Resorts also owns/manages Stowe in Vermont; Beaver Creek, Breckenridge and Keystone in Colorado; Park City in Utah; Heavenly, Northstar and Kirkwood in the Lake Tahoe area; Wilmot in Wisconsin; After Alps in Minnesota; Mt. Brighton in Michigan; Whistler Blackcomb in British Columbia; and Perisher in Australia.)

Tim and Diane Mueller, owners of the companies that have managed the local resort since 1998, told the crowd that if they could have chosen an organization to take over their enterprises, it would be the Vail group.

“Vail is clearly the leading ski operating company in the country, if not the world,” Tim Muerller said. “I’m glad we’re turning it over to them.”

The audience gave the Muellers an appreciative round of applause.

Speaking for the new managers, Pat Campbell, president of Vail Resorts’ mountain division, said her company is excited about its first business foray into New Hampshire and that it remains “incredibly passionate” about creating memorable resort experiences for visitors.

In addition, the company’s Epic Pass, which allows for unlimited skiing at all of its 14 resorts, will be available at Sunapee. (Vail owns and/or operates resorts throughout North America and Australia.)

Addressing concerns that Vail would push for more development at and around the Sunapee resort, Campbell said that her company has been divesting itself of properties that are primarily real estate and that it has no plans to move forward with either the West Bowl Expansion or any other development project in the area.

“Candidly, Vail is a dream partner,” Hessler Gates of Sunapee said in the public commentary portion of the meeting. “For the decision-makers, this should be an easy decision and I urge you to do it promptly.”

The majority of the speakers were in agreement with Gates, urging Commissioner Stuart and others involved in the transfer to approve it as quickly as possible.

Campbell said she’s hoping the transfer will be completed by Labor Day.

But some did express concerns.

A member of the New Hampshire Sierra Club repeated an earlier call for an independent audit of the resort’s finances, and encouraged the Vail team to maintain the four non-skiing trails on Mount Sunapee.

Another speaker asked how the Vail proposal had come forward so quickly and whether there is an appeal process if the state turns down its proposal.

Will Abbott of the Society for the Protection of New Hampshire Forests said Vail Resorts could prove its intent to stay focused on recreation, rather than development, by permanently conserving 600 acres of land located in Goshen. The idea was heartily applauded by the audience.

Holly Flanders, a two-time Olympic and three-time World Cup alpine racer who grew up skiing and racing at Sunapee, said that from her current home in Park City, Utah, she’s become familiar with how the Vail company operates.

“Vail is a great ski operator, they invest in improvements,” she told the crowd.

“I tell you want I’ve seen,” she added. “Many local businesses are making more money. Property values are going up. The ski area is more crowded, so the roads are more crowded. And everything is more expensive – the hotels and restaurants.”

 

Photo: Breath -taking view of Lake Sunapee from the Mount Sunapee Resort, by Garrett Evans. Courtesy of Vail Resorts.

This story first appeared in the InterTown Record, a weekly newspaper published in Sutton, New Hampshire, on Tuesday, July 31, 2018.

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New York hedge fund under scrutiny after taking over ownership of Mount Sunapee lease

 

The above image is from the Mount Sunapee resort website.

By Ray Carbone

NEWBURY – It was a meeting viewed both by complex business interests around the world as well as residents of the Sunapee area.

At a public information session held at the Mount Sunapee Resort’s base lodge last week, more than 100 people gathered to express concerns about the transfer of the lease for the state park’s popular ski resort to one of the largest alternative asset management firms in the world.

Och-Ziff Real Estate, which manages over $30-billion in funds from its offices in New York, London, Beijing, etc., took over the lease as part of a $456 million deal involving 14 properties, most of them family recreation areas, from the previous owner, a real estate investment trust named CNL Lifestyle Properties.

But several people who spoke at the NH Department of Natural and Cultural Resources meeting held on Tuesday, Aug. 22, wondered about the hedge fund’s commitment to maintaining local management and operation of the state-owned recreational facility.

The question has become especially significant after Och-Ziff agreed recently to pay $413 million in federal government fines and other penalties in order to satisfy charges filed by the security and exchange commission that two former company executives operated a “far-reaching” bribery scheme, violating the Foreign Corrupt Practices Act. The SEC says the pair paid tens of millions of dollars to high-level government officials in several African countries – including the son of the late Libyan dictator Moammar Gadhafi – to garner investments as well as other valuable resources, including mining deals, for the company.

“Our firm is not proud of what happened here and we take full responsibility,” David Levine, Och-Ziff’s general counsel, told the audience last week. “It’s a disappointing chapter in our 24-year history.”

Levine blamed “two rouge (former) employees” that acted outside company policy for the bribery incidents, which occurred between 2007 and 2012. He said that the company has instituted several measures to insure that a similar problem doesn’t occur in the future.

The operator of Mt. Sunapee will continue to be The Sunapee Difference, a company owned by Tim and Diane Mueller who have managed the property since 1998.

But Andru Volinsky, a member of the governor’s executive council and the official who asked for the public meeting, said Och-Ziff was making a smart business move. “When I see a company that’s instituted a lot of compliance measures, those are all big steps and you do it to avoid prosecution… Certainly, Och-Ziff has stepped up their game but it wasn’t a completely voluntary matter.”

The original, print version of this story, published in the InterTown Record of Sutton, New Hampshire on Tuesday, August 29, 2017, was ended here for space reasons. Below is additional information regarding the meeting.

Indeed, the U.S. Department of Justice has agreed to delay prosecuting the company any further for three years as executives work to incorporate the new measures aimed at greater compliance with the federal laws, and assist the department of justice’s ongoing investigation.

For some residents, the issue of the new lease owner was not as important as how the transfer occurred. Typically, such arrangements like would be subject to approval by the governor and the executive council.

But Jeff Rose, the commissioner of the state’s department of natural and cultural resources, which has governing authority over state parks, and Anne Edwards, an associate attorney general, said the recent situation was exempt from that requirement because it involved, not the lease itself, but the entity that owned the lease and 13 other properties.

So, while Och-Ziff is now the owner of leaseholder, the lease itself is still owned by CLP Mount Sunapee, LLC, the same organization that has held it for the last nine years. (To the relief of some attendees, the operator of Mt. Sunapee will continue to be The Sunapee Difference, a company owned by Tim and Diane Mueller who have managed the property since 1998.)

At the same time, Commissioner Rose said that the state has already begun negotiations with Och-Ziff on the lease, hoping to alter it to make similar transfers require state approval in the future.

But Steve Russell, the president of the Friends of Mount Sunapee nonprofit organization, said no change is necessary. Speaking on behalf of his group, as well as the NH Sierra Club, Russell said that the property’s original 1998 lease indicates that state official should have reviewed the transfer before it occurred in April.

“Examining risk and financial security are essential to maintaining the public trust,” Russell said at the meeting. “It is standard practice in all state contracts.”

Russell also pointed out that the three-year prosecution agreement that Och-Ziff has with the department of justice i as insufficient as a guard against future misconduct by the firm . He said that Public Citizen, a nonprofit organization that monitors government activities, recently indicated that similar agreements are an “inadequate enforcement and oversight mechanism.”

“We believe the state has abandoned its oversight of the lease of the Mount Sunapee State Park,” Russell added. “We appeal to elected state officials to begin a complete and transparent review of this lease acquisition… so that the people of New Hampshire, who are the rightful owners of the Mount Sunapee State Park, can rest assured that our state park is in the hands of those worthy of the public’s trust.”

The story was originally published in the InterTown Record of Sutton, New Hampshire on Tuesday, August 29, 2017.