Wall Street is not so far away
September 30th, 2008Posted in Skiing Everywhere
Recently I posted a rumination about the possible repercussions of the financial crisis rocking Wall Street. A couple of days ago I read about the first proof I’ve seen of the ill consequences skiing may soon be feeling more and more of. New West reports that Moonlight Basin in Montana has had to shut down its current construction projects due to the loss of the $170 million in financing it was working with from the now defunct Lehman Brothers. Naturally, CEO Lee Poole proclaims optimism about obtaining new financing, and I hope he succeeds at some level since I like the aggressive season ticket prices Moonlight offers college students in the Bozeman area attending Montana State Univ.
On another level, I would not miss Moonlight passing from the ski scene since it has always been a real estate play, and barely a ski area. It leans up against the northern flank of Lone Peak, Big Sky’s signature peak and has a little interesting skiing high up, but the vast majority of its terrain consists of long tree lined, very boring trails that will eventually be surrounded by vacation homes.
A couple of years ago a friend of mine landed a subcontractors job doing work on one of he homes being build as part of Moonlight Basin’s real estate build out in a skiable access area called Cowboy Heaven. This house was an 18,000 square foot affair on a rather tiny lot and it included a dog grooming suite with its own tub and shower! I’m sorry, heating a house this huge on the dark north side of high elevation mountain in Montana is beyond stupid.
About twenty year ago, my wife and I were deciding on where to move to in the West to enjoy a better skiing life style than we were enduring in Upstate New York. Our search had narrowed to Big Sky and Grand Targhee. In those days there wasn’t much difference in the the vertical drop or size of the skiable terrain between them. Big Sky had a few more lifts, but less powder. It had bigger expansion potential, but no real community off the slopes. For variety, an hour away there was Bridger Bowl, an hour from Grand Targhee was Jackson Hole. Neither area had crowds. Big Sky’s surrounding neighborhood of thousnads of acres of private timber land was littered with large swaths of clear cut forests, Targhee’s was preserved National Forest and active farms in the valley at the base of the mountain. In the end, we thought the Targhee environs offered a more desireable quality of life, if less investment potential. We weren’t interested in a second home, but a primary home with other young families and lots of things to do for growing boys. We got in in time.
The Teton Valley is the residential base of Grand Targhee, the land next to the National Forest where nearly everybody around here lives, has been badly abused this past decade with ill concieved real estate development schemes of ridiculous proportions, but these are all miles from Grand Targhee thanks to Targhee’s location several miles within the Natiional Forest. The hustle and bustle of the rampant construction boom in the Teton Valley is just a subdued whimper this year as sales of building lots have all but come to a halt and building permits given out are about half as numerous as they were last year.
Several enomous golf resot and second home developments are in varying degrees of development now and with the largest one recently closing it sales office, I guess it is fair to say times are getting tough.
Because Grand Targhee is a privately held resort of the George Gillette family, it is hard to guess what revisions and delays may be on the table as the credit market landscape keeps changing for the worse. I understand George Gillette has a made a career out of using other people’s money to build his successes (once upon a time owning Vail resorts) and now Booth Creek Holdings (a string of mid-sized ski resorts scattered around the country). In the past year or so two new lift lines have been cleared on Grand Targhee’s slopes in preparation for new lifts and long anticipated terrain expansioin. Off the mountain, the Gillette’s are developing a new upscale subdivision and are revitalizing a major portioin of Drigg’s Main Street with a new three story commercial and residential building. Both of these represent sizeable investments. I wonder if the shrinking availabilty of money to lend and tighter oversight will make it more difficult for the Gillette’s to proceed with their on mountain plans, assuming they think the realing economy is an environment worthy of risking new investments over the next few years? Lots of local banks are advertsing about how finacially secure they are and how they are not part of the Wall Street mess, but I wonder how much they will be willing to lend, to whom and under what terms? For local houses and small business loans, I’d guess they’ll do the deal, but for a realy hefty commercial loan i’d guess they have to look for additiinal backing from whomever is still standing on Wall Street and that might not be very encouraging.
Wall Street is not so far away commented:
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Dan Gresham commented:
Don’t see how you can characterize Headwaters bowl, the tree skiing off Lone Tree lift and the North Snowfield as only “a little interesting skiing high up”.
admin commented:
I concede Dan has a point, there is interesting and challenging skiing to be found where he points us to. Perhaps there may be more some day, but for my taste, way too much of Moonlight’s skiing is pretty lame and designed to maximize future home and condo access to the long gently pitched trails.
Real Estate Newbie Info » Blog Archive » wall street is not so far away commented:
[...] admin wrote an interesting post today onwall street is not so far awayHere’s a quick excerpton another level, i would not miss moonlight passing from the ski scene since it has always been a real estate play, and barely a ski area. it leans up against the northern flank of lone peak, big sky’s signature peak and has a little … [...]