Sunday, December 7, 2008

Okemo sold...True. Tim & Diane lease it back...

True… there’s been many rumors flying around the mountain. True… Okemo has been sold. BUT this is not your traditional sale of a ski resort. This a sale-leaseback which means that The Muellers remain owners of the companies that operate Okemo and Mount Sunapee and Crested Butte Mountain Resort. CNL Lifestyle Properties owns just the underlying resort assets.

CNL Lifestyle Properties, the purchaser, is what is known as a real estate investment trust, or REIT. By law, a REIT cannot be involved in the operation of their holdings, or in this case the ski resorts.

In a recent letter, Tim and Diane wrote: “everything will stay the same from the guest’s perspective and the employee’s perspective. CNL cannot get involved in the operations of the resorts. They are strictly a landlord and financing entity. This is a great move for us and our resorts. In this time of economic instability, for CNL to commit sizable dollars to our resorts is a testament to their confidence in us and our entire Team. As you know, Triple Peaks’ resorts are recognized for operational excellence and success within the ski industry. In today’s environment, there are not a lot of companies able to complete transactions of this nature. This is also indicative of CNL’s financial strength and confidence in our management team and in the ski industry. They are a well capitalized, stable company and we are pleased to be associated with them.”

The three resorts of Triple Peaks are each growing companies that require sustained capital infusion. As you can imagine in this financial environment, short-term loans are very risky, and there’s not a lot of funding available. A sale-leaseback partnership with CNL allows for stable, long-term capital. This is a creative way to finance this growth without taking on operating partners or attempting to finance through banks at this challenging time. Only because of The Mueller’s vision, and Okemo's strong operating history and reputation is this arrangement with CNL even possible today.

As for the past 26 years, Tim & Diane remain committed to the future success of each resort and their surrounding communities.

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