Wednesday, April 25, 2012

Oak Mountain Sold

Photo Credit: Oak Mountain

2011-2012 was a tough season for ski resorts. We at Ski, Esq. expect that at least a few ski areas might not be able to rebound from the horrific winter. However, it looks like Oak Mountain in Speculator, NY will not be one of the resorts ending up on the slag heap.  

According to the resort's Facebook page, the small Adirondack resort will be under new ownership for the 2012-2013 season. The resort's Facebook page is reporting that Matt and Laura O'Brien will be the new owners of Oak Mountain, pending review of the purchase agreement by their attorney. Once the contract is signed, the O'Brien's will become the proud owners of a resort that boasts 2 T-bars, 1 fixed-grip quad and 14 trails spread over 650 vertical feet.

The Hamilton County Express previously reported that Oak Mountain's current owner, Tom Preston, had received 3 offers to purchase the resort.  The first proposal was from Grain Communications Group Inc. (Sarasota, FL) which was not interested in running the ski operation, but wished to purchase telecommunications equipment already located on the property. The second proposal was from from Independent Towers Holding LLC (Latham, NY) which offered to buy the property and lease ski operations to an independent operator. The third, and ultimately successful, proposal was the O'Brien's.

According to the Hamilton County Express article:

"The O’Briens offered to purchase the ski area, minus the cell tower parcel and two of the three roadside lots, paying $1 at closing and $50,000 on the third anniversary of the sale.
The O’Brien proposal includes an operating plan for the ski center. It estimates expenses of over $330,000 per year and calls for changing from a one-season operation to a three-season operation and from a business dependent on climate to one that is self-funded based on indoor activities along with winter and summer outdoor recreation."

As a commercial real estate attorney, I look at the deal as follows. The Oak Mountain tract is comprised of several parcels: (1) the land underlying the ski operation; (2) the land underlying the telecommunications equipment; and (3) the roadside lots. The ski operation is not worth a lot: most of the land on which the ski resort operates is likely undevelopable and the resort has lost money in recent seasons. Almost certainly, most of the value in the Oak Mountain tract is in the telecommunications parcel. Cell tower leases provide a steady and significant stream of income. The roadside lots are of some value, but most likely do not currently generate any revenue while still requiring the payment of annual property taxes. In looking to purchase just the ski operation, in essence, the O'Briens wanted to purchase the part of the property that was least valuable economically. 

Of course, monetary value is not the same as sentimental value. If one were to ask the generations of skiers who have enjoyed Oak Mountain, they might tell you the property was invaluable to their community. After all, with a day ticket costing only $34 Oak and small mountains like it are great places to introduce beginners to the sport. As more and more community ski hills disappear from the map, it is great to see one remain. For that reason, today is a great day for the town of Speculator and Hamilton County. Ski, Esq. wishes the O'Briens and Oak Mountain the best of luck for 2012-2013.


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