Notices posted on buildings at America’s second largest private ski resort are clear. “Please take notice that Hermitage Club LLC failed to post the bond required by the Vermont Commissioner of Taxes…and may not conduct any business at this location.” News of the closure comes less than a month after a Massachusetts bank filed a $16.6 million foreclosure complaint related to three separate loans allegedly now in default.
Vermont Public Radio reports The Hermitage owes the State of Vermont more than $1 million in rooms, sales and meals taxes. The two parties had been operating under a payment plan that allowed the ski resort to open on weekends this winter. A $112,000 payment wired to the state on Friday was enough to keep the lifts spinning until Sunday. A note to members posted at the club yesterday says, “We are working diligently to secure the funds to allow us to open for this coming weekend and will keep you posted.” The local newspaper references some employees who said they were escorted from the property by police. I can only imagine the frustration they must feel losing their jobs after months of uncertainty.
Opened in 2011 on the site of the defunct Haystack Mountain ski area, the Hermitage Club currently owns a 2015 Doppelmayr bubble high-speed six place lift, two recent Skytrac quads, a 1985 Poma triple and a 1987 CTEC triple. As I wrote a few weeks ago, lots of legal maneuvering likely lies ahead and many of these lifts could find new homes in the event of a liquidation.
Lift Blog 
Cant say I didn’t see this coming, shame.
LikeLike
What are they going to do with the lifts
LikeLike
If no one purchases the Club, a la Tamarack or Spanish Peaks, the lifts will probably be auctioned to cover debts. Someone’s going to get a steal on Barnstormer if that happens.
LikeLiked by 1 person
If the club is liquidated, Barnstormer would be the PERFECT replacement for the Barker Mountain Express at Sunday River, and with Boyne reacquiring full ownership, that could become a reality. That would be awesome if they could make out like a bandit and grab Barnstromer for a fraction of the cost when new, truck it over to the river, and use it to replace the aging Barker Quad, which as of recently can only run at 700 fpm MAX and has become far to unreliable to be one of SR’s main lifts.
LikeLike
Barnstormer could also be used at Jay Peak to replace the Bonaventure Quad and provide a different enclosed lift to get marginal skiers off the tram that have no business being on that terrain.
The Barker lift at Sunday River needs to go. 700 fpm is just too slow. Especially for one of the busiest lifts on the mountain. But I think Boyne would rather just buy a brand new lift than a re-tread.
LikeLike
I doubt anyone is going to purchase the club and assume all debts. 16mil is a lot and the club has not once been profitable.
LikeLike
In fact the money owed by the Hermitage Club is more than $16 million, more like $18 million, which is the back loans, the state of vermont taxes ($1.2 million) plus any other contractors and suppliers who have not filed a lawsuit yet. Wait and see what the total owed to all parties is, it is going to be a big number.
LikeLike
Do you mean the old 1987 Yan HSQ Sunday River Express at Sunday River instead of Barker Lift? I don’t see an active Barker Lift at Sunday.
LikeLike
The Sunday River Express was officially renamed to the Barker Mountain Express about 10 years ago. 1987 Yan HSQ.
LikeLike
I wonder if Big Sky would be interested in Barnstormer at all since they’re all about 6-packs & 8-packs with bubbles & heated seats these days…
LikeLike
Barnstormer has clear bubbles and Big Sky only uses blue bubbles so it would not go there. If Boyne buys it, it’s going to Sunday River. Plus the shipping costs to move it out west would be ridiculous.
LikeLike
Shipping costs? Big Sky literally just bought a lift from Austria. There isn’t a bankruptcy yet but if the lifts were to eventually be auctioned, I’d expect very competitive bidders to appear from across the country and possibly beyond. Does anyone know who actually won the Bank of America Wildwood Express auction? Was it Brian Head directly or Doppelmayr that bought it back and sold it to them? The lift sat somewhere for two years after sitting unused on the hill for three.
LikeLike
Anyone think it would be a good idea for mount snow to but the club and have an interconnect between the mountains like sugarbush does?
LikeLiked by 2 people
I thought about it as well. I’m not familiar with the area, but it looks a little too far away to do via gondola, which makes it hard.
LikeLike
There was a plan to connect the two decades ago, but obviously it never took place.
http://www.newenglandskihistory.com/skiareaexpansions/Vermont/mtsnow/deerfieldridge.php
http://www.newenglandskihistory.com/skiareaexpansions/Vermont/haystack/deerfieldridge.php
LikeLike
This was discussed at a time when Mt. Snow owned and operated both mountains. (Note, very few people skied Haystack then when the lift tickets were 1/2 price of Mt Snow’s so the notion that people would line up to pay $100K membership to ski there was a little bit of a stretch.) Connecting the two was tricky because of limited water rights for snowmaking. Mt Snow has since upgraded their system and storage so maybe… There may remain an issue with access to more national forest land.
LikeLike
I think that Mount Snow or Peak Resorts might want to swoop in for the Barnstormer. Could make a nice Sunbrook Lift or North Face Lift. It could also go where Tumbleweed / Sundance is as they have mentioned plans of eventually putting a detachable over there, and a bubble could nicely complement the Bluebird as well as be a great beginner friendly lift.
LikeLike
I don’t know anything about the ski lift business but it would seem that geography alone would make the lifts more valuable to Mt Snow than anywhere else. They’re only a couple miles apart so transportation would be less expensive than to any other location. They could probably airlift them from one mountain to the other.
LikeLike
The difference in cost between moving it 5 miles and 100 miles is pretty minimal. Most of the cost is in the dismantle and loading for transportation, as well as the install. Whether they drive for 10 minutes or 2 hours doesn’t move the needle all that much (maybe 10%-15% more)
LikeLike
The six pack could be made into a new bridge lift at lutsen
LikeLike
If Instagram is any indication, it would appear the Club has reached a deal to open again this weekend.
https://www.instagram.com/p/Bgmfv5PA2-e/
LikeLike
great place but the owner was one shady dude. offering up drugs to all the ladies.
LikeLike
Barnstormer can also replace Dreamcatcher at PC, replace Town (even though it needs a longer haul rope) or be a reliever for Silverlode if the club is liquidated. Since Over and out eliminates the busiest bottleneck in the area, Tombstone, Silverlode now has the worst lines even though you can take King Con as an alternative. If that Bubble 6 was built to relieve pressure of Silverlode, it will significantly eliminate lines. Courtesy of Newenglandskiindustry, as of today, the club is facing liquidation.
LikeLike
Vail Resorts and Alterra certainly could swoop in to buy up the club’s lifts.
LikeLike
Alternatively, Vail could buy the entire resort and cut connector trails to its new mountain next door (Mount Snow).
LikeLike
This is very likely considering that Mount Snow obtained many permits regarding this expansion (as laid out in a 1989 plan)
LikeLike
The original 1989 plan is linked below.
LikeLike
That is now a pipe dream. The lands between Mt. Snow and Haystack can’t be developed any longer IIRC. Even if not by law, as a practical matter, that’s not happening in the State of VT.
LikeLike
The idea of a unified Haystack/Mount Snow is not as far fetched as it was only a few weeks ago with Vail in charge. This is for a few reasons:
A) Vail has experience merging neighboring ski resorts and understands the many benefits of doing so.
B) The Hermitage Club has a wealthier clientele and Vail would love to get them hooked on the Epic Pass because they can potentially afford multiple west coast trips every year.
C) There would be more parking lot to help parking shortages, which while not the worst in Vermont are still an issue in my experience.
D) It is rare to ever have an opportunity to drastically improve the skiing at a resort for such a low cost (Haystack has 90% snowmaking, a modern lift fleet, and existing trail network).
I am not saying it will definitely happen, as it more than likely will not. But, it does make sense for a number of reasons.
LikeLike
@SKITHEEAST Not sure any of those factors are all that new or meaningful in the big picture.
1) I don’t understand how experience in physically connecting two ski areas (a sample size of 1, BTW) has any impact on this situation. What specific learnings will they deploy that meaningfully changes the outcome here?
2) Hermitage Club members have always been wealthy – that’s not new news. And oh BTW, if there were enough of them to make any sort of difference to Vail, Hermitage Club likely wouldn’t be undergoing liquidation. Waaayyy to small to matter.
3) Parking lot size at Hermitage hasn’t changed. Not sure why this is some new factor.
4) See #3. Nothing new there.
So all that’s changed is that you finally have a Mt. Snow owner that’s well run and well capitalized. When set against the Bicknell’s Thrush habitat, other USFS restrictions/requirements, VT Act 250 and a likely $40-50M price tag, good luck with all that.
LikeLike
Vail understands the value in marketing. Marketing campaigns based on advertising the size of the mountain are effective, hence why Killington is the “Beast of the East” and Park City advertises the 7300 acres number everywhere. Mount Snow and Haystack combined have more acreage than Stratton by a fairly good margin and there is value in a campaign advertising the biggest skiing in Southern VT.
The Hermitage Club itself was most recently valued at $25 million, but it could easily be acquired for much less now that it is in Chapter 7. It also has 525 member households at last count, and assuming each household conservatively purchases only 2-4 Epic Passes and spends minimal on dining on the mountain, that’s an additional $1-$2 million in revenue each year. That number does not even take into account the revenue from the wealthy individuals traveling out west to Vail resorts. It also allows the initial purchase price to seem pretty reasonable without even factoring in any marketing or other skier growth.
Again, it is definitely a long shot and unlikely. The USFS/Bicknell Trush problems are real, but they can and have been overcome before and there is tremendous support in the local community (Wilmington) to continue the operation of a ski area which helps with VT Act 250. However, it can easily make sense if you run the numbers. The question would be whether or not Vail can get a better return on investment for spending that money elsewhere. It is very easy to say “If it made sense, why didn’t Peak do it?” but Peak was a very different company with far less capital available for investment and they attempted to appeal to a different demographic of skier, not necessarily the wealthier skier Vail targets. Vail, Peak, and every other mountain operator all have their own visions and ideas for their ski areas, so what makes sense for one owner may or may not make sense for another.
LikeLike
I’m sure Peak Resorts understands the value of marketing size/biggest/best. They certainly didn’t shy away from publicizing the Hunter North expansion. May not have had the capital to do much of it, but I doubt that Vail has cracked the code there – it’s pretty well known that superlatives are effective in the ski industry.
As for the assumptions on revenue, I think they are A) heroic and B) still unlikely to justify the expense. Those 525 families – if they wanted to ski at mid/large sized ski areas opened to the public, why aren’t they doing that already vs. having invested in Hermitage? Presumably they were looking for a more private, uncrowded, high-end experience. Vail’s entire model with the Epic Pass is built to result in significant weekend crowding, and that’s been the experience of all the recently added resorts. What makes you think that 100% of those families will pony up to ski among the hordes?
That $1-2M in extra revenue is completely illusory, and anyway doesn’t factor in what matters more from an ROI perspective, which is EBITDA or cash flow from that revenue. Even assuming that they get anywhere close to that revenue number, how much do they need to spend each year operating Haystack? Actual “profit” on any incremental revenue would be miniscule, if existent at all. As important, even if there is a significant discount on the asset value – say they can get it all for $10M – they’ll still need to spend $30M + on the lifts and infrastructure for the interconnect. So if 6-8x EBITDA is the industry standard for acquisitions, they’d have to feel confident they could make $5-7M in incremental EBITDA each year to justify that investment. Those numbers can pencil out at a massive destination resort like PC where you have more size, scale, pricing and brand power to generate a return. You also had sizable customer bases on both sides of the interconnect. Not going to make those sorts of returns by convincing weekend warriors in the northeast to come up to Mt. Snow a couple more times/year, and it’s not like the Hermitage customer brings much to the table numbers wise.
Trust me – I’d like to see Deerfield Ridge connection as much as anyone – I’ve spent some quality time in that valley daydreaming about it. But at this point, I think it’s more of a fever dream than anything.
LikeLike
Robert Katz owner of Vail does not like bubble chairs and PC is owned by vail so I doubt that PC will take Barnstormer.
LikeLike
Rob Katz isnChairman and CEO of Vail Resorts, not the owner. VR is a publicly traded company.
LikeLike
And yet Vail Resorts has Orange Bubble on the west coast, and Bluebird and Sunburst on the East Coast.
LikeLike