Buyers Spell Out Plans for a Revitalized Sugarbush - Ski Mag

Buyers Spell Out Plans for a Revitalized Sugarbush

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One of Vermont's premiere resorts will change hands this fall if a dealannounced Sept. 10 goes through. The lead partner in the new Sugarbushownership group said he plans to make consistently good service and customersatisfaction his top priorities, and he ticks off a list of changes that willmake many a Sugarbush-lover cheer.

American Skiing Co., whose ownership of the central Vermont resort datesto the days before it became a publicly held company, announced plans to sellit to a group of local investors doing business as Summit Ventures N.E., Inc.The deal is scheduled to be complete by mid-October, well before the start ofski season. The purchase price was not revealed, though it will presumably bepublished in ASC's next quarterly report to stockholders.

The new ownership group is headed by Chief Executive Officer Tom McHugh, aninsurance and investment banking veteran who makes his home in the Mad RiverValley. Though an avid skier, McHugh has heretofore kept a low profile in theValley, his home since 1985. He first came to the Valley on family and schooltrips from his home in Westchester County, where he grew up, and says he hasbeen in love with it ever since. He has two daughters, one a top J3 racer forthe Green Mountain Valley School Ski Club.

Though self-employed for many years, McHugh is no stranger the resortbusiness. After receiving a ski-area management degree at Colorado MountainCollege, followed by a four-year economics degree, he went to work in Vermontfor Sherburne Corp., then the owner of Killington. When that companypurchased Sunday River in Maine, McHugh went to work there, assisting LesOtten, long before the latter became CEO of ASC.

His group also includes Bob Ackland, general manager of nearby Mad River Glenuntil he stepped down in August amid negotiations for the sale. Also part ofthe group is Win Smith, chairman of Merrill Lynch International and owner oftwo of Warren's most prominent businesses, the Pitcher Inn and the landmarkWarren Store across the street. The fourth member of the group is yet anotherinvestment banking professional, Joe Riemer. All four partners are residents,at least part-time, of Warren.

McHugh said Summit Ventures will honor Sugarbush season passes already soldfor the coming year. ASC said that purchasers of its all-East pass can eithertrade it for a Sugarbush-only pass or use it at ASC's remaining six Easternresorts.

McHugh sounds genuinely excited to be in the ski-area business."Sugarbush is truly a skier's mountain," he said. "People coming here fromBoston or New York are willing to drive that extra hour because they knowthey're going to get some really great natural terrain. ' And the Valley isVermont at its best. It's a Vermont that you don't find at the other majorresorts in the state, without all the hustle and bustle and the trafficlights."

McHugh said customer service will be the top priority. But he already hasinfrastructure improvements in mind. Perhaps not surprisingly, his wish listwould match that of many a disgruntled 'Bush aficionado. The top priority,though not for this season, is more and better lodge space'long a Sugarbushshortcoming. Judicious reconstruction of the Castlerock Lift, initiated byASC after it was condemned by the state, was structured into the deal and isproceeding apace. (Rest assured, 'Rock Heads: There will be no increase inuphill capacity.) Also high on McHugh's list is "undoing the infamouslift-reconfiguration at North (the Mt. Ellen area)," where getting to thesummit is now a three-lift undertaking. "It just plain-old doesn't work," hesaid, noting that ASC already had the state permits to rectify the situationby relocating the terminus of the main base-area chair to mid-mountain, whereskiers would be able to board the summit chair. Hand in hand with that wouldbe restoration of spring skiing at North, long a sun-splashed late-seasontradition on the FIS trail before the lift work rendered it unfeasible.

Conspicuoly absent from McHugh's announced intentions is any form ofslopeside real-estate development. He said it is not a priority.Since the "Mascara Mountain" glory days of the Sixties, Sugarbush has had atroubled history'no less so under ASC. Otten got off to a fast start when hepurchased the resort, dumping large amounts of cash into on-mountainupgrades. The company boasted of spending $28 million, though most wouldchallenge that figure. Improvements included a complete overhaul ofsnowmaking, with a new reservoir on the banks of the Mad River, plus severalnew lifts, including one that linked the resort's two distinct areas, LincolnPeak (AKA "Sugarbush South") and Mt. Ellen ("North"). "Les put a lot of moneyinto snowmaking, the pond, uphill capacity, etc.," said McHugh. "They wereall good things."

But once the skiing product was shored up, Otten had far less luckimplementing the other half of the ASC equation: recouping investment throughthe sale of slopeside real estate. Locals objected to the size and quality ofa proposed slopeside quartershare hotel, though it pre-sold robustly. Andwhen ASC revised the design to make it smaller and more upscale, sluggishsales of the more expensive units forced the indefinite postponement of theproject, and ASC turned its attention to potentially more lucrativeproperties in Colorado, Utah and California.

"We did not abandon plans to develop there," said company spokesman SkipKing, "but we did put them on the shelf, largely because what we wereprepared to build and what the community felt comfortable with having usbuild were not exactly the same things. We still felt there was anopportunity there in the future, but there were other places where it mademore sense to invest first."

Since then, Valley business owners say, the resort has languished, with skiervisits hovering below 400,000. (Killington, by comparison, does more thantwice that.)

Business leaders generally cheered the news of the impending sale, hopingthat the new owners would have the wherewithal to grow business in the Valleywhile soothing strained relations with its residents.

"When Les Otten first bought Sugarbush, it was the crown jewel, and hemade a lot of very necessary improvements," said Bruce Hyde, owner of TheHyde Away Inn and Restaurant on Route 17. "But over the last six years or so,they acquired so much real estate that Sugarbush went to the bottom of theheap. Skier days have been flat for pretty much the last decade.

"Sugarbush is an outstanding ski mountain, and it's absurd that they only dothe numbers they do," Hyde said. "But as the conglomerate grew, money fromASC seemed to be going out West or to Killington and Mt. Snow. I'd saymarketing has been pretty much non-existent over the past few years."

Chris Smith, owner of the Warren House restaurant, a quarter-mile fromthe Sugarbush parking lot, said he, too, is hopeful that local ownership ofthe resort will be good for Valley business in general. "As Sugarbush goes,the rest of the community goes," he said. "We needed a strong local presence.This is a terrific thing."

And like Hyde, Smith hopes that eventually the new owners can bring somesort of slopeside lodging component to the mix. "I would hope the new guyscould use a little more tact and get something done," he said. McHugh says he has no immediate real-estate development plans, and thatif he ever does, he'll do things differently. Meanwhile, however, a land-swapASC arranged with the Forest Service gives the resort more breathing room inthe base area, which will make it easier to make base-lodge improvements. Even Sugarbush's No. 1 competitor in the Valley, Mad River Glen, cheeredthe news of the sale. "We are just thrilled," said Mad River's Eric Friedman,who worked under Ackland until his recent resignation. "We know Bob; we knowwhat kind of guy he is and what his priorities are in life and in business;and all the things that are important to him are what Sugarbush needs. He's agood manager who knows that he's doing, and if anyone can turn it around, hecan."

Friedman said he doesn't worry about facing potentially savvier competition."We're not competitors. If Sugarbush does well, we do well. We look at theMad River Valley as a combined attraction. Mad River adds a lot; Sugarbushbrings what they have; and combined we offer what no other New England resortcan offer."agood manager who knows that he's doing, and if anyone can turn it around, hecan."

Friedman said he doesn't worry about facing potentially savvier competition."We're not competitors. If Sugarbush does well, we do well. We look at theMad River Valley as a combined attraction. Mad River adds a lot; Sugarbushbrings what they have; and combined we offer what no other New England resortcan offer."

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