What's Happening?
The small town of Nederland, Colorado, with a population of approximately 1,500, has taken a significant step by approving the purchase of Eldora Mountain Resort for $120 million. The town's board of trustees
voted unanimously to approve the asset purchase agreement and a transition services agreement. This acquisition is notable as it marks a rare instance of a town purchasing a ski resort, a sector typically dominated by large corporate entities like Vail Resorts and Alterra Mountain Co. The purchase will be financed through municipal bonds backed by the resort's revenue streams, such as lift tickets and food services, ensuring no burden on local taxes. The town has conducted thorough due diligence, including financial and physical assessments of the resort, to prepare for this acquisition.
Why It's Important?
This acquisition is significant as it represents a shift towards community-focused management in the ski industry, which has seen increasing corporate consolidation. By owning the resort, Nederland aims to prioritize community interests over profit maximization. The town plans to reinvest revenues into the resort and the local community, potentially enhancing local infrastructure and services. This move could serve as a model for other small communities looking to gain control over local resources and ensure that economic benefits are retained within the community. Additionally, the purchase could influence the broader ski industry by demonstrating the viability of community ownership in a sector traditionally dominated by large corporations.
What's Next?
The next steps involve the Nederland trustees approving a bond ordinance, expected to occur at a meeting on February 20. The town will also need to secure a new special-use permit from the U.S. Forest Service and finalize an agreement with Alterra to keep Eldora on the Ikon Pass. POWDR, the current owner, has agreed to provide advisory services for two years to ensure a smooth transition. The town plans to maintain continuous operations and reinvest in the resort and surrounding community. There are also plans for a $10 million reserve fund to cover debt repayments in case of a poor snow year. Details regarding employee benefits and potential local discounts are still being finalized.
