reposting this from the comments section on an article, i didnt write it, just agreed with it
I've been watching this litigation since day one with curiosity that quickly morphed into amazement. That PCMR is, or ever could be, in such a perilous situation is simply a testament to what had to be but a few moments of really poor business judgement.
How can i say this? I don't work for PCMR, and don't manage their real estate, and other than reading all of the documents filed with the Court post facto, I was not there to witness any of the dealings between the parties. At this point I think it's pretty safe to say that none of that actually matters. The reason that this can be stated here, now, and with credibility is simply that if one has read the documents and the pleadings, and irrespective of how much you might want to sympathize with PCMR over their "good guy" legacy and extreme vulnerability, they dug their own hole and dug it remarkably. Actually, it's more like they just (very) carelessly fragged themselves. And I bet it happened so effortlessly and with such disbelieving hindsight that it's difficult to imagine the painfulness of it all.
The very lifeblood of any ski area is it's terrain. The very essence of a contract, as court after court after court will confirm, is what's in writing between the parties. Alot can be said, discussions can be had, but at the end of the day what gets reduced to writing is 99.99% of the time - particularly with leases and real estate contracts - what gets enforced. In tnis case, PCMR management somehow, through what probably seemed for an instant like a harmless oversight but was actually a monumental screw-up, did not follow the letter of their lease agreement with the sub- of Talisker (their landlord) and basically blew their whole future because they literally compromised most of what their product relies on - skiable terrain. No amount of infrastructure and fixtures and water rights and the like will make up for the loss of 80% (whatever) of your mountain.
As a person who has spent years navigating complex legal land use matters and lease agreements and contracts of sale and all of their various permutations, I can say - with but a small asterisk to signify "you never know what a Judge will do and there is actually quite a ways for this matter to go" - there is almost no likelihood of success on the merits here no matter how much PR spin and sympathy PCMR manages to bring to bear on this dispute. If the basic facts and agreements are as already filed with the Court, no amount of "yeah, BUT!!!!" type of testimony and fleshing out of the issues can be expected to alter the black and white language of the contract. While this may seem sad under the circumstances - and it is - it would be sadder still if a careless, gross mistake on a crucial term of a written contract were allowed by a Court of Law to be "overlooked" just because the offending party can be viewed in a very sympathetic, turning before our eyes into a quite tragic, light. This is now a layup of a business decision for Vail: Let PCMR off the hook (not going to happen) or leverage their exorbitant investment at Canyons into something much more attractive. They are a business.... some would say the very best at what they do. They will make a quality business decision and do what they must, and should, to maximize their return on investing in Utah skiing.
So at this point there should be a huge effort on the part of POWDR Corp to salvage what they can from this mess. I've thought about it and if they have leverage - and they do have some, of course, the extent of which I cannot reasonably estimate without knowing all of the details of their business - it is really best for them to think about how to negotiate a deal with Vail that gives them the ability to get paid for the assets they own or still have rights to while at the same time preserving the right(s) for things like skiing privileges for their season pass holders from other of their mountains. One thing about PCMR is they have never offered much in the way of reciprocal benefits to their passholders at one of their mountains to ski at another. They've been a bit stingy (it seems) in this regard and so on the one hand you can say that this is not such a big deal to POWDR's business model. However, especially in light of the current ski industry wave of such multiple-mountain benefit offers (like the Epic Pass), it would make sense to get these benefits so they can operate their franchise with max (for them) competitiveness going forward. As to what they can get for these assets, my shallow assumption is one thing that surely could get placed on the table is a lease, similar to the one just entered into between Vail and Talisker, that simply pays PCMR for all of their remaining terrain and infrastructure and water rights and etc. so that Vail can merge the two operations and do what Vail typically does: develop further and run a great ski resort. The unrealized synergies from a mega-resort standpoint that exist if one imagines a combined PCMR/Canyons geography are breathtaking.... very Vail-like.
I wish PCMR the very best as they go forward but am not disillusioned that they have many options. Another is clearly to negotiate a new and MONUMENTALLY more expensive lease going forward. What this would do to the business model that they can only see now in the diminishing perspective of a gray and gloomy rearview mirror is probably too much, too sad, too tragic to contemplate, at least from the standpoint of profitability. But having guaranteed income with no operating headaches from a legacy annuity, so to speak, if they simply sell - or in this case lease - out isn't the end of the world. It is, however, a tragic (used that word three times now!) end of a long and illustrious era here in Park City.
As for Vail, one has to believe that before entering into the staggering 50 year contract(times what? 6? Do you think in the year 2063 Vail remembers to provide WRITTEN notice to Talisker of their intention to renew for the next 50? Or does the lease automatically renew UNLESS there is notice to the contrary? I'm guessing it's the latter....) lease for $25MM per annum they knew this litigation was a layup for them. The opportunity to enter the Utah ski market and create another very Vail-like resort would get practically any ski area owner-operator salivating like Pavlov's hungriest dog, and the only thing standing in the way is a very sharp Judge who probably has a focused understanding of the centuries of legal precedent regarding written contracts. This is my thesis and I'm sticking with it.
Meanwhile, this has got to be the mother of all very bitter pills to swallow for those at POWDR Corp. They are good guys... Let's hope they navigate these very tricky waters with grace.