One of Vermont's premiere resorts will change hands this fall if a deal announced Monday goes through. American Skiing Co., whose ownership of the central Vermont resort dates to the days before it became a publicly held company, announced plans to sell it to a group of local investors doing business as Summit Ventures N.E., Inc.
The deal is scheduled to be complete by mid-October, well before the start of ski season. The purchase price was not revealed, though it will presumably be published in ASC's next quarterly report to stockholders.
The new ownership group is headed by Chief Executive Officer Thomas McHugh, an insurance and investment banking veteran who makes his home in the Mad River Valley. Though he is said to be an avid skier, McHugh has heretofore kept a low profile in the Valley, his home for nearly a decade. Sources say the group also includes Bob Ackland, general manager of nearby Mad River Glen until he stepped down three weeks ago amid negotiations for the sale. Also believed to be part of the group is Win Smith, a Smith Barney board member, Warren resident and owner of two of Warren's most prominent businesses, the Pitcher Inn and the landmark Warren Store across the street. Other members of the group, if any exist, have not been named.
Summit Ventures says it intends to honor Sugarbush season passes already sold for the coming year. ASC says that purchasers of its all-East pass can either trade it for a Sugarbush-only pass or use it at ASC's remaining six Eastern resorts.
ASC and its chief executive, Les Otten, got off to a fast start when they purchased Sugarbush, dumping large amounts of cash into on-mountain upgrades. The company boasted spending $28 million, though most would challenge that figure. Improvements included a complete overhaul of snowmaking, with a new reservoir on the banks of the Mad River, plus several new lifts, including one that linked the resort's two distinct areas, Lincoln Peak and Mount Ellen.
With the skiing product thus shored up, Otten had far less luck implementing the other half of the ASC equation: recouping investment through the sale of slopeside real estate. Locals objected to the quality of the proposed slopeside quartershare hotel, though it presold robustly. And when ASC revised the design to make it smaller and more upscale, sluggish sales forced the indefinite postponement of the project, and ASC turned its attention to potentially more lucrative properties in Colorado, Utah and California.
"We did not abandon plans to develop there," said company spokesman Skip King, "but we did put them on the shelf, largely because what we were prepared to build and what the community felt comfortable with having us build were not exactly the same things. We still felt there was an opportunity there in the future, but there were other places where to made more sense to invest first."
Since then, Valley business owners say, the resort has languished, with resort skier visits hovering below 400,000. (Killington, by comparison, does more than twice that.) Business leaders generally cheered the news of the impending sale, hoping that the new owners would have the wherewithal to grow business in the Valley while soothing strained relations with its residents.
"When Les Otten first bought Sugarbush, it was the crown jewel, and he made a lot of very necessary improvements," said Bruce Hyde, owner of The Hyde Away Inn and Restaurant on Route 17. "But over the last six years or so, they acquired so much real estate that Sugarbush went to the bottom of the heap. Skier days have been flat for pretty much the last decade.
"Sugarbush is an outstanding ski mountain, and it's absurd that they only do the numbers they do," Hyde said. "But as the conglomerate grew, money from ASC seemed to be going out West or to Killington and Mt. Snow. I'd say marketing has been pretty much non-existent over the past few years."
Chris Smith, owner of the Warren House restaurant, a quarter--mile from the Sugarbush parking lot, said he, too, is hopeful that local ownership of the resort will be good for Valley business in general. "As Sugarbush goes, the rest of the community goes," he said. "We needed a strong local presence. This is a terrific thing."
And like Hyde, Smith hopes that eventually the new owners can bring some sort of slopeside lodging component to the mix. "I would hope the new guys could use a little more tact and get something done," Smith said.
Even Sugarbush's No. 1 competitor in the Valley, Mad River Glen, cheered the news of the sale. "We are just thrilled," said Mad River's Eric Friedman, who worked under Ackland until his recent resignation. "We know Bob; we know what kind of guy he is and what his priorities are in life and in business; and all the things that are important to him are what Sugarbush needs. He's a good manager who knows that he's doing, and if anyone can turn it around, he can."
Friedman says he doesn't worry about facing potentially savvier competition. "We're not competitors. If Sugarbush does well, we do well. And we look at the Mad River Valley as a combined attraction. Mad River adds a lot; Sugarbush brings what they have; and combined we offer what no other New England resort can offer."
Joe Cutts is Ski's Eastern editor, based in Burlington, Vt. Email him at email@example.com.