American Skiing Company announced it has an agreement to sell Sugarbush Resort in Warren, Vermont, to Summit Ventures NE, Inc., a company formed by a group of investors with ties to the Mad River Valley. Terms of the sale are confidential and it's still subject to financing and standard closing conditions, but the deal should be closed by the start of the ski season.
Tom McHugh, the CEO of Summit Ventures, is an investor who has lived in Warren for 17 years. Ironically, he worked as Les Otten's right-hand man at Sunday River 20 years ago. The deal was five months in the making after McHugh began talks with ASC in March.
Bob Ackland, who resigned his post as general manager at nearby Mad River Glen last month, will take over the same position at Sugarbush. "He's committed to the valley," McHugh said. "From what I've seen, people are genuinely excited about the local ownership and having him come on board as GM."
Win Smith and Joe Riemer are the final two pieces of the investment team. Smith lives in Connecticut (and part-time in the valley), and is an investment banker who developed and owns The Pitcher Inn in Warren. Riemer is a longtime valley visitor from Connecticut, and also a resident of the valley.
As part of the agreement, the new owners will honor Sugarbush season passes that have already been sold for the upcoming season. Those who have purchased ASC's All East and Ski America passes may keep their passes for use at ASC resorts or exchange them for a Sugarbush season pass.
ASC has been working to reduce company debt, but was not actively shopping Sugarbush as part of that effort. "While we were not seeking a buyer for Sugarbush, we believe the unsolicited offer we received from Summit Ventures is in the best interest of American Skiing Company investors," company CEO B.J. Fair said in a press release. Net proceeds of the sale will be used to reduce the company debt. ASC announced on May 30 that Steamboat resort was for sale, and company spokesman Skip King said that's still the case. "We're very pleased by the quality and quantity of interest we've had in Steamboat," King said.
ASC bought Sugarbush in the spring of 1995 and spent millions improving lifts and snowmaking, among other aspects of the mountain. But due to local opposition, the company had trouble getting the ball rolling on one of its signature real estate projects.
"We never abandoned our plan to build there. When we first went out, there was a lot of interest (from prospective buyers)," King said. "The initial plan wasn't fully permitted. When we finally got a plan the town was comfortable with, it would have been a more expensive project. We didn't abandon the plan. We shelved it. There were other priorities that came up."
McHugh said the plan to replace the condemned Castlerock chair will go ahead. "The new Castlerock lift is going in, we have signed the contract," he said. "We had jointly done that deal with ASC early on. At that time we didn't know who would own the resort but whoever it was, we had to have the lift in."
According to McHugh, real estate is not in the immediate plans. First and foremost, the new ownership will put their efforts into on-mountain amenities. "Let's get the infrastructure and the mountain where it should be," he said of the resort that has entertained only about 350,000 skiers during each of the last two seasons. "We're out of space at the Lincoln Peak base lodge, so we need a larger base lodge. North (also knows as Mount Ellen) needs some upgrades. These improvements are going to be as the economics permit. We'll explore things as we go forward but we want to get it back on track. Certainly real estate wasn't our driving force in this transaction at all."
"When ASC bought it, they pumped a lot of money into infrastructure, some of it good," he added. "We want to focus on getting it back to being a ski product. "
The sale of Sugarbush means both Mad River Valley resorts -- Sugarbush and Maad River Glen -- are owned and operated locally. Mad River Glen is cooperatively owned. The idea of local ownership at Sugarbush is an exciting prospect to Eric Friedman, Mad River Glen's director of marketing.
"The new ownership understands what makes the Valley a special and unique place," Friedman said. "They know there's a certain niche of people that appreciates what we have. We don't have overdevelopment, fast-food restaurants, or a lot of the things that these kind of overbuilt resorts have. I think this community can be sustainable. It's going to be a great thing."
What's good for one resort should be good for the other, and Friedman is optimistic that both Sugarbush and Mad River can make a combined effort to lure more visitors to the valley. "As long as the financial backing is all on, and from what I understand it is, they're going to kick ass. And from Mad River Glen's perspective, we want nothing more than for them to kick ass. We're hoping the tide rises around here and both our boats float a little higher. What's good for them is good for us."
McHugh agrees and says he looked at other Vermont resorts and found that Sugarbush offers what other resorts cannot. "I looked 45 minutes up the road at Stowe and down the road at Killington, two fine resorts. But the old Vermont 'pure and simple' byline has its roots at Sugarbush."
McHugh expects that under new ownership, the resort will be able to approach markets it could not reach under ASC, where he believes the target market overlapped with the marketing efforts of other ASC resorts.
"I think this move separates the valley in terms of it being a skiers' valley," McHugh said. "Two great hills combined with the ambience of the valley, a combination that's truly a dying breed in this day and age."