Vail Not Happy With Intrawest Winter Park Improvements

DENVER— Intrawest and Vail Resorts may be headed to court, according to an AP wire report. Intrawest Corp. and the city of Denver have released details of a deal that could bring $50 million in on-mountain improvements in the next 10 years to the city-owned Winter Park resort. According to AP, Vail issued a statement challenging the deal, saying it may violate a non-competition agreement it has with Intrawest. It was a condition of Intrawests $400 million residential development at Keystone, which is owned by Vail Resorts. Vail said the Winter Park deal breaches the agreement, which bars Intrawest from developing real estate at nearby Colorado ski resorts it does not own. Intrawest argues it will have a controlling interest in Winter Park, so the deal is permitted. “If we felt we were breaking our contract with Vail we wouldnt be in this transaction, said Gary Raymond, president of development for Intrawest, which is based in Vancouver, B.C. Raymond said Intrawest has controlling interest of Winter Park because it will be running the resort, paying its bills and taking all the risks. The city of Denver remains the owner. Porter Wharton III, Vails senior vice president of public affairs, said the announcement by Intrawest and Denver makes it appear more likely the non-compete provisions have been breached. Thats because Denver officials said the city will not relinquish ownership of Winter Park, said AP. “If Intrawest has indeed violated its contractual obligations, then we will be left with no choice other than to protect our companys interests by commencing litigation in the very near term, he said. Denver contracted with Intrawest to take over Winter Park because the resort has struggled to compete with Vail and other areas that invest in high-speed lifts, equipment, snowmaking and amenities. Intrawest will operate the resort through 2078. It paid the city $5 million last year and will pay $2 million annually for the next nine years. After that, Intrawest will pay $2 million annually plus 3 percent of gross revenue over $33 million. Mayor Wellington Webb and Winter Park chief executive Gary de Frange said Thursday the prospect of real estate development made Intrawest an ideal candidate to run the resort. Ski areas often fund improvements with income from developments. “We cant compete with Vail (Resorts) as a city, Webb said. Vail owns four resorts in Colorado and one in California. Intrawest owns Copper Mountain in Colorado and owns or has a controlling interest in more than half a dozen others in North America. Winter Park got little financial help from the city to fund improvements. When it was unable to make its $2 million lease payment to the city last year, Webb set up a commission to study whether it should be sold or an operating partner sought. SOURCE: AP