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Mountain News: Measuring the decline

SNOWMASS VILLAGE, Colo. – Stalled development projects, lagging real estate sales, and brows furrowed over the coming ski season continue to dominate the news in ski towns.

SNOWMASS VILLAGE, Colo. – Stalled development projects, lagging real estate sales, and brows furrowed over the coming ski season continue to dominate the news in ski towns.

Double-digit gains in real estate have been replaced by declines that are just as unrelentingly in double digits. A new Land Title Guarantee Co. report says sales volume was down 36 per cent for the year through September in Aspen and surrounding Pitkin County, while dollar volume plunged 46 per cent.

Construction activity is also being affected by the credit constriction. In Snowmass Village, real estate developer Related WestPac has announced that shaky credit has delayed three buildings scheduled for construction this fall at the $1 billion Base Village project. However, work will continue on two buildings now under construction.

Financing WestPac’s projects are Hypo Real Estate Holding, which recently received a $69 billion bailout from the German government, and Lehman Bros., the U.S. firm that filed for bankruptcy protection in September.

Lehman Bros., the nation’s fourth-largest investment bank, was also in the news in Telluride, where it was the financier of the swank Capella Telluride Hotel. The division of Lehman responsible for the financing was acquired in September by Barclays, the London-based global financial services company.

However, moving into October, Barclays had not confirmed that it would extend financing of the hotel. As the general contractor jockeyed to ensure payments, subcontractors began pulling out. The result, reports the Telluride Watch, was silence at a work site that before had been a cacophony of construction.

The construction trades returned to the project after about a week, when the financing extension was confirmed. The hotel, the first North American operation by Horst Schulze, who previously founded the Ritz-Carlton chain, is scheduled to open in February.

Lehman Bros. was also involved in financing the Fortress Investment Group acquisition of Intrawest, the operator of three major resorts in Colorado plus Whistler-Blackcomb. A $1.7 billion loan due Oct. 23 was causing apprehension, but the refinancing was accomplished.

Jackson Turner, an analyst with Argus Research, told newspapers that the debt costs had undoubtedly increased. The result, he suggested, will be reduced service and restricted capital investments at Intrawest’s various ski areas.

Intrawest spokesman Ian Galbraith brushed aside that idea, reports the Steamboat Pilot & Today. Chris Diamond, president of the Steamboat ski operation, one of the three ski areas in Colorado operated by Intrawest, dismissed Turner’s comments as “nothing more than outside speculation.”

Looking out to the ski season, however, the only thing clear is that the times have changed. “There will be a new normal,” said Ralf Garrison, of the Mountain Travel Research Program.

Garrison said the pace of reservations in September for future months was down 19.6 per cent across the ski sector. Vail, he said, is down 19.5 per cent.

Aspen seems no different. “Booking numbers are definitely down,” said Bill Tomcich, president of Stay Aspen Snowmass, a central reservations agency. Tim Clark, president of the Aspen Lodging Association, said the economy is causing people to book closer to time of arrival. As such, it’s possible that positive economic news may turn around reservation numbers yet this winter, he said.

But with 38 to 40 per cent of the season already “on the books,” in the words of Andy Wirth, Intrawest’s vice president for marketing, there is plenty of concern.

Bob Milne, who operates a property management company at Steamboat, says he’s not particularly concerned about Christmas. However, he is fretting about the gaps of February and March.

“Am I nervous? Of course I am,” he told the Pilot & Today. “The thing that makes me nervous is that people aren’t calling right now. The phone volume isn’t there.”

Should restaurants, lodges, and other resort operators slash their prices? Travel consultant Peter Yesawich, of the Y Partnership, said he expects affluent travelers — defined as people with incomes of more than $150,000 — will continue to take ski vacations, but even the very wealthy will be more sensitive to prices.

In fact, said Garrison, Vail lodges have reduced their day rates by 0.7 per cent, the first reduction in several years. However, he warned against discounting too deeply, for fear of damaging the perceived value of the resort experience once the economy resumes.

Rob Katz, chief executive of Vail Resorts, told a community gathering of several initiatives already announced, including one called Holidays on Us, in which those who stay for five nights during major holidays will get the holiday night free. “What we are trying to do is get people to pick up the phone and call,” he said.

In Vail, Katz and a group of well-heeled and influential figures called on the town to funnel several million dollars normally allocated to summer tourism marketing into a fund for winter promotions. That council was scheduled to take up the proposal this week.

One of the ad hoc committee members, former council member Kent Logan, said Vail must respond rapidly. “We must act now, and we must act boldly,” said Logan, who several years ago donated, along with his wife, Vicki, $35 million to the Denver Art Museum. “I don’t think we can wait until December, and I don’t think we can wait until January.”

From casual inspection, Vail would seem to be in no pain. The skyline continues to be a phalanx of construction cranes, testimony to continued work at several major real estate development projects at the ski mountain base.

But Logan, a former investment banker, said the town needs to put together the pieces of the next redevelopment of the town.

Just what the town’s major step will be is anything but clear. For decades, factions within the community have lobbied for a convention centre. Meanwhile, the town is under the gun to revamp a major but deteriorating affordable housing complex called Timber Ridge.

The most likely prospect seems to be Ever Vail, a huge new base-area real estate development being planned by Vail Resorts. While the company is preparing for a tough winter, Katz made it clear the company is in good shape financially. It has $150 million cash on hand, he said.

In both Vail and Aspen, there was a sense that the setbacks are only temporary. “Let’s not do the Chicken Little thing because the sky is not falling yet,” said Arnie Morkin, a mayoral candidate in Snowmass Village, responding to the news of the slowed construction schedule there.

Jim Westkott, the individual often described as the Colorado state demographer, for more than a decade has warned of explosive growth in the mountain resort valleys. He’s backing off his projections somewhat, reports The Aspen Times, but continues to insist that the growth will continue.

“This will bring things down to Earth, and in the long term it’s probably a good thing,” he said at a conference in Glenwood Springs. The slowdown, he said, should be used by communities to plan their futures, instead of being reactive.

 

LEED gold possible in Canmore

CANMORE, Alberta – LEED designation is becoming more and more common in public schools in ski towns across the West. And where it’s not, the absence of the designation is a point of contention.

In 2002, Banff Community High School’s renovation became the first school in Canada certified under the LEED program. Now, a new middle school at Canmore, located down-valley at the entrance to Banff National Park, is seeking gold-level certification in the LEED program.

Gold is the third highest of four levels in LEED, which stands for Leadership in Energy and Environmental Design.

School officials decided that the energy savings of a new school, if done right, would save more money in the long run than renovating the existing school. The new middle school, reports the Rocky Mountain Outlook, will require 30 to 55 per cent less energy because of its design and materials.

In Colorado, school districts are struggling with whether LEED designation is worth the added cost. In the Eagle Valley, where Vail is located, school officials were persuaded by architects that the money was better spent in the building itself than on the rigorous reviews mandated by LEED.

But how do you verify how “green” a building is without the rigorous review of a LEED or some similar process?

That is precisely the issue now before Crested Butte. There, the town council is negotiating use of town land for a school expansion. The council, reports the Crested Butte News, is emphasizing its desire that any school construction be certified under the LEED program.

Similar to the argument in the Eagle Valley, school officials in Crested Butte say they intend to meet the goals of green-building without the expense of certification. Energy efficiency advocates, however, say that the cost of LEED certification will run only $40,000 to $60,000. Any third-party verification process will cost that much, maintains Andris Zobs, of the Office for Resource Efficiency.

“I want it LEED-certified,” said Alan Bernholtz, the town mayor. “The school should be the leaders and be an example of energy efficiency.”

Ski Area Management in January addressed the same issue. The magazine noted that even some advocates of green building describe the LEED review as annoyingly bureaucratic. However, some green-building advocates reject the argument that LEED buildings are more expensive.

Brian Dunbar, who directs the Institute for the Built Environment at Colorado State University, cited two high schools in Fort Collins, Colo., of equal capacity and built at identical costs and with equal sizes. Yet the newer, greener (and LEED-certified) high school saves $105,000 in annual operating costs. Better use of natural resources allowed the building’s mechanical system to be downsized, he said.

 

Todd Palin makes rounds

EAGLE, Colo. – Todd Palin stopped by the Eagle Diner last week for a grip, grin and gripe with the locals. He’s the husband of Republican vice presidential nominee Sarah Palin, and although he often has been appearing with his spouse, last week he was running solo.

He was wearing blue jeans and a black jacket, with an emblem from the Iron Dog snowmobile race pinned to it. Personable and friendly, he went from booth to booth in the small diner, which can hold no more than a few dozen people.

The community of 7,000 people, located a half-hour down-valley from Vail, is contested turf, as is Colorado — at least in theory. There are official headquarters in Eagle for both Barack Obama and John McCain. For decades, Eagle County was reliably Republican, but beginning in 1992 began drifting blue.

But for many of the local electricians, fishing guides and builders, Obama is an abstraction — and a feared one. Although none appeared to be the sorts who make more than $250,000, the income bracket targeted by Obama’s tax plan, they told Palin of fears that Obama will divert their income to less-deserving people.

As well, they talked to him about hunting and wanted to know about his snowmobile racing.

Women at the diner gushed at the attention of Palin, as handsome in person as he appears on television, reported the Eagle Valley Enterprise.

 

Skiing couple up to 505

KETCHUM, Idaho – John and Jewel Andrew, who are well into their retirement, stopped by Sun Valley recently. Twelve years ago they decided to ski all the alpine resorts in North America, and so far they’ve accomplished that at 505 ski hills from Alaska to Georgia.

“Hill” might seem like an exaggeration for some of these ski areas, observes the Idaho Mountain Express. For example, New York’s Sawkill Family Ski Center has only 70 vertical feet. The average in North American is 948 feet.

Many of the ski hills are operating on a shoestring. John, who is 77, says he insists on paying, even though most ski areas want to give him a free lift ticket when they discover his age.

Another 200 or so ski areas remain on the couple’s list, with 40 to 60 each in Ontario, Quebec, New York and Michigan. “Our goal of skiing all of North America may be forever elusive,” John Andrew told the newspaper. Still, he didn’t sound the least bit rueful about the quest. Sensible retired people, he added, went on ocean cruises.

 

Mining renewables

OURAY, Colo. – Do you support renewable energy? Energy independence? If so, then you’d better support domestic miners, says Jim Burnell, of the Colorado Geological Survey.

Burnell recently spoke in Ouray, a one-time mining town on the edge of the rich mining districts of the San Juan Mountains. His speech was reported by the Ouray Watch, a companion of The Telluride Watch.

Solar panels, batteries, and hybrid cars all contain the kinds of minerals that were historically mined in Colorado.

“Cadmium-tellurium photovoltaics — these would take over the world if one of these minerals weren’t so rare,” he said. The most important element, tellurium, is the namesake for Telluride.

Concentrated solar power, which many energy experts say is the most crucial technology necessary to reduce greenhouse gases, uses aluminum or silver. And the tubes used to transport the energy contain molybdenum, said Burnell. Colorado has one active molybdenum mine, located just north of the Eisenhower Tunnel, with another mine scheduled to reopen soon between Copper Mountain and Leadville. A third is proposed at Crested Butte.

Colorado also has zinc, which is necessary for certain types of fuel cells.

Of the minerals and metals needed for production of alternative energy, only a few — selenium, vanadium, bromine and copper — come primarily from domestic U.S. sources. Most of the rest are imported, primarily from China. Perhaps not coincidentally, nearly all batteries and photovoltaic panels are also imported.

That means that renewable energy may be possible, but given current policies, not energy independence.

“Achieving energy independence by means of alternative energy technology can’t be done without domestic mining,” Burnell said. “Moving to renewable energy technologies is inconsistent with anti-mining advocacy.”

While there is no such thing as no-impact mining, the impacts to environmental and human health are much more minimal than in the past, he said.

 

Snow blanket tested

SNOWMASS, Colo. – The snowpack never completely melted this summer at the Snowmass ski area, where a mound of snow 20 feet high survived even the 80-plus days of summer. The mound is the remnant of a massive jump that was part of a snowboard terrain park built last winter.

Until early October, the snow was covered by a blanket produced by a Swiss company called Landolt. The product is called Ice Protector Optiforce, and it’s being used in European ski resorts, which tend to be lower and more vulnerable to the warming climate.

Rich Burkley, general manager of mountain operations for the Aspen Skiing Company, said the snow blanket is expected to be most useful in protecting snow or ice at critical connections or access areas, such as at ramps below chairlifts that get skiers to trails. One goal, he told The Aspen Times, is to reduce the energy consumption needed to make snow.

However, whether the blanket is cost effective is still being evaluated, he said. Also testing the blanket for effectiveness are the Vail and Telluride ski areas.

 

Ozone violation possible

FARMINGTON, N.M. – While violations of the federal ozone standard have already been registered in New Mexico’s San Juan County, they could be ahead for Colorado’s La Plata County, where Durango is located.

The ground-level ozone, explains the Durango Telegraph, is the result of tens of thousands of compressors used at oil and gas wells in the San Juan Basin from Durango south to Farmington, plus industrial facilities, the exhausts from two coal-fired power plants, plus the emissions of motor vehicles.

Christopher Dann, of the Colorado Air Pollution Control Division, told the newspaper that non-attainment could also be in store for Colorado’s La Plata County, where Durango is located. While the energy industry is partly to blame for the pollution, he said, “the “region’s booming population is also coming into play, and you’re seeing more cars and more emissions all the time.”

 

Democrats still in minority

SUMMIT COUNTY, Utah – Voter registration has increased substantially in Summit County, reports The Park Record. Two-thirds of new voters have aligned with the Democratic Party, but the Democrats remain the smallest voting bloc. Nearly 16,200 voters are independent, while 6,845 are Republican, and 3,579 are Democrats. Another 650 align with yet other parties. In addition to Park City, the county includes a place called Snyderville Basin, a bedroom community to Salt Lake City, a half-hour away.

 

Transferable development rights program launched

HAILEY, Idaho – The transfer-of-development-rights program is being used for the first time in the Wood River Valley, where the Ketchum and Sun Valley resort areas are located. A 117-acre parcel that has rights to develop five lots is instead transferring those rights to a subdivision near the town of Hailey, where 19 lots are now permissible. Officials in Blaine County tell the Idaho Mountain Express that few landowners have been willing to place their development rights in so-called sending areas — areas where county officials would prefer not to see developing — into the pool available for transfer.

In such programs, development rights become a commodity, meaning there is a price attached to them, so that a developer near a town could buy the development rights from a rural landowner. In Colorado, both Aspen and Summit County have highly developed programs.

 

Mining company vows mine activation in 2009

SILVERTON, Colo. – Colorado Goldfields Inc., which several years ago set out to resume mining and ore processing in the Silverton area, says it is within 18 months of profitability. The company spent the summer drilling in Ross Basin. The current plans call for work to begin next May to reactivate the Pride of the West, a gravity, flotation and cyanide leach mill located near Silverton. The goal is to start accepting ore from other properties in the San Juans beginning next September, and then begin drilling for ore in a nearby mine called the Gold King that is owned by Goldfields.