Is the Yellowstone Club getting what is deserves?

Quite a bit of ink has been spilt this week covering and commenting upon the bankruptcy filing of the Yellowstone Club. There is definitely some “rich”  irony at work when some of the world’s richest people watch as their pricey private club falls victim to greed, mismanagement and collateral damage from the bigger financial crisis; a crisis some of them may have some responsibility for. Weep not, for if push really comes to shove, some of them have the spare change to salvage the situation in time to keep the lifts spinning for their family’s  Christmas in the mountains. The reality may well be that this is a game of chicken, and the winner will pocket the club at a very reduced price.

Let’s set the schadenfreude aside for a moment and be thankful that this mess, along with the financial problem besieging other high end ski/real estate developments, may be doing us mere mortal skiers a big favor.  Perhaps the risks associated with these types of developments are really too great and now will bring the big dreamers back down to earth.

Unfortunately, the YC, like most modern ski resorts wasn’t really about skiing. It was about making money. Skiing can make a resort operator some money, but not enough to get really rich from, so resort owners do everything they can to maximize the returns from their real estate holdings at the base of the mountain, or in nearby developments. The YC took this concept to extremes. Not only did the YC have more than 10,000 acres to sell, they concocted a scheme to make their offerings ultra exclusive, by invitation only, and ultra expensive so they would get only the deepest pocketed members. I guess they seriously over estimated the number of very wealthy people who would buy into their playland. But before they learned that, they had invested heavily in, and borrowed huge amounts more, to build a costly infrastructure; a big ski mountain, a golf course, lodges, miles of roads and even more ski lifts to provide transport for skiers living in homes distant from the real ski lifts.

I spent a few days in the Yellowstone Club on business a couple of years ago and I have to say my most vivid memory is of the size of the place. Not the ski mountain, which is big, even by western ski area standards, but of the vastness of the club’s developed land. Driving up the main road from the entrance guard station, you have to look way up ahead to see the ski mountain. The golf course? It is way over there on the left across a valley and up a mountainside. To get to some of the more distant home sites you drive a long time to get past the ski mountain and around the base of another mountain.

You might think, this being a creme de la creme type place, that the scenery would be drop dead gorgeous. Sadly, to my taste, it is not. Vast acres of the forested land are young trees growing on land that was clear cut in the not too distant past. There are a few nondescript mountain tops ringing the viewsheds, but they are pretty ordinary. Any view of the Tetons is far more inspiring, as are Aspen’s Maroon Bells, Vail’s Gore Range, Alta’s Wasatch peaks or Sun Valley’s Pioneer Mountains. Maybe that is why so many of the club’s members have built such huge homes there- giving each other something interesting to look at.

No, the ridiculous size, and expense, of these homes is all about showing off- and the hope of making a bundle on the future sale. And that is one thing I have never understood. Who do the club members think they are going to sell too?  It is , after all, a club that supposedly limits its members to invitees only. And how many will that be? Won’t most of them be able to, and want to, build their own dream home, one they had designed just right for their taste? Doesn’t sound like a sellers market to me, even in boom times.

I obviously don’t have the mentality that must come from having so much money that it is hard to spend it fast enough. Maybe some of the YC members are the type of people who just love to have dozens of friends and family spend the holidays with them, so it might make some sense to build a house large enough to accommodate a gathering of the tribe. Maybe, but the YC was building lodges that could accommodate lots of guests in grand style, so the need for lots of extra room in any private house should never have been a very pressing need.

What good is money if you don’t spend it? If you think you are hot stuff and you live in a neighborhood filled with other people thinking the same, if they have six fireplaces, are you going to have just one, or even two? Just one jacuzzi? Why not one in every bathroom? Just a couple of guest rooms? Let’s have guest suites instead with kitchens, hot tubs, entertainment rooms and private entrances. Better have a few rooms for the service staff too.

Even with all of luxury one can buy and install in a private home, I’ll bet it will never compare with the experience of staying at one of the finest hotels in St. Moritz or any of the other truly top shelf hotels at Europe’s priciest resorts. And for the number of days these people actually spend in the mountains, they’d save millions jetting to Europe rather than trying to build their own. With a private jet and places like Paris, Vienna  and London en route, life could be worse.

This has been my tortured route to my general premise on ski resort development: I like the European model better than the US one. Filling up the woods around ski areas with big resource depleting buildings that sit empty most of the time is just plain stupid. The Europeans fill the slopes with skiers staying in short term accommodations of all quality levels. There certainly are private chalets, but the resort environs and miles in every direction are not blanketed by them like we are trying to do. Most skiers like variety and enjoy skiing new mountains and seeing the sights in new villages, so having lots of options of places to stay at lots of good resorts encourages people to ski more. If lodging options are choked off because so much land has been sold for private residences, supply and demand will force lodging prices up and up and fewer skiers of average means will be able to enjoy the sport.

As the poster child for skiing’s excess emphasis on real estate development, I don’t mind seeing the Yellowstone Club struggle. I hope, if it survives, that it ends up being the only one of its kind, because if it becomes a trend setter for the industry, it will ruin the sport. After the financial crisis eases, there will still be lots of money for the wealthy to lead the ski industry astray with by turning ever more ski areas into private domains that only the well to do can afford to ski at. The wealthy won’t even have to buy into a resort. They’ll just keep demanding ever higher levels of services and amenities, which the resorts will cede to, raising prices to pay for these, and pricing more and more of the rest of us out. And that will suck.

Tags: cost of skiing, future of skiing, ski resorts, Skiing Everywhere, Yellowstone Club
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