Ski Resort Life

Vail sues Intrawest

News

From

Ski Area Management

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.