Intrawest's deal with the city of Denver to run Winter Park underwent its final approval process yesterday. The agreement calls for a $99 million investment into the resort in order to make it a viable competitor on the Colorado scene. On top of that, Intrawest has agreed to a first-year payment of $3 million then $2 million for the next nine years; thereafter, the lease is $2 million a year plus three percent of gross revenues over $33 million.
The unanimous vote by the Denver City Council came on the heels of Vail Resorts Inc. filing a lawsuit last Friday for breach of contract. As reported by SAM earlier, Vail is suing because it feels that a no-compete contract between the two companies, which prohibits Intrawest from developing any real estate at an area they do not have a controlling interest in, is being violated. Intrawest believes that the lease with Denver does represent a controlling interest. The suit, according to the Rocky Mountain News, was filed in a state court in Delaware, where Intrawest is incorporated.
Rounding out the news, Vail Resorts has also announced to staffers that it will seek to cut its budget by 2 to 4 percent. Blaming a poor summer travel season, not-so-great year-end fiscal numbers and the threat of war with Iraq, Vail will also cut off performance-based bonuses to about 400 managers. The company will, however, pay expected two percent merit raises this month, according to the Rocky Mountain News.