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MTN/LUK - Vail Resorts, potential to acquire Park City for close to nothing?


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This is a strange but fascinating scenario.  Park City Resort (the ski resort in Utah) has rented their land from United Park City Mines for close to 40 years.  The ski resort sits on top of an old mine.  A few years back a company named Talisker purchased United Park City Mines, Talisker is owned or controlled (unclear) by Ian Cummings of Leucadia fame.  Talisker owns a number of other ski resorts under their Powdr company.


Park City had a 20 year lease coming due in 2011.  Talisker alleges that Park City paid it two days late and backdated the payment on their option to renew.  Since the letter of intent was received late Talisker is suing for control.


Here's the twist, last year Talisker leased Canyons, another property of their to Vail Resorts (MTN), and leased the United Park City Mines land to Vail as well if Vail agreed to pay all litigation costs.  Vail decided to serve a motion on Park City to vacate the premise, and Park City has said they're not leaving.


Allegations are that Talisker and Vail devised a scheme to use the lease renewal as a way to take control of Park City at a below market price, potentially for nothing.  If true that would be enormously value accretive to Vail Resorts.  Also worth noting is that Park City's lease is $155k a year, a price set in the 1960s.  Park City spent over $100m in improvements in recent years with the understanding that they'd be able to renew their lease to 2051.


This is a really interesting situation to watch, I found out about it on a ski forum I frequent, an incredible thread with more details than I could ever hope to include is linked below.  The forum has a number of lawyers and local experts who've uploaded copies of the lease agreements and court documents.


Park City is selling season passes stating that they plan on operating this season.  I've skied there a day the last two years, they have a deal value investors would appreciate.  If you fly into Salt Lake City you can get a free lift ticket the day your flight arrives if you pre-register online, and bring your boarding pass to the window.  I've enjoyed my free skiing, Park City isn't the best (head to the Cottonwood Canyons), but free can't be beat!





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