East Burke, VT, Sept. 20, 2000--Embattled Burke Mountain Resort, whose lender turned off the resort's cash flow after two poor snow seasons, was sold at auction Saturday for a reported $310,000. The price and quick sale stunned a crowd of more than 300 people gathered in the resort's base lodge for the auction.
The purchaser, who has decided to remain anonymous, will take ownership of the resort's two lodges, four lifts (including a Garaventa CTEC quad installed about 1989) and close to 300 acres of land. In the end, the property's total 1,500 acres, its equipment, lodges, several building lots and 12 condominiums were broken up and sold individually when auctioneer Thomas Hirchak realized selling separate parcels would bring the biggest yield.
The auction started with the seller requesting bids on the entire mountain. When a potential buyer who had made an initial bid of $1.8 million for all property and assets would not improve on that bid after the eventual owner modestly increased the amount during the individual bid process, the gavel came down. The onlookers were stunned as the new owner's agent moved forward to claim the resort in the complicated bidding process.
The sale closing is expected to be completed in 45 days. Because of the mystery surrounding the winning bidder, immediate plans for the ski area and the availability of training slopes for neighboring Burke Mountain Academy (BMA) are unclear. Though BMA has developed contingency plans to train its racers, the obvious choice would be to keep it and its $2 million annual budget at Burke.
The mountain wound up on the auction block because the bank holding The Northern Star Ski Corporation's paper on the property withdrew a $1 million loan and foreclosed after two poor seasons. That loan withdrawal precipitated the fourth time an owner of Burke filed for bankruptcy in the last 12 years.
Burke's original trails were cut by Civilian Conservation Corps crews in the 1930s and were accessed by a state toll road that wound to the top of the mountain. Eventually a group of businessmen purchased the mountain and began making improvements and adding lifts.
Doc Kitchel, one of the original members of that group, slowly started buying out his partners until taking sole ownership of Burke around 1978. He owned it until 1986 when he filed for Chapter 11. It lasted another couple of years under ownership of the bank until being purchased by Paul Quinn, a developer from Boston. Quinn replaced the double with a quad, improved snowmaking and started to build some condos.
But when the real estate market in Boston faltered, Quinn also had trouble finding the money to keep Burke Mountain going and he turned the operation over to his lender. The bank ran the ski resort for one season before selling it to a German operator. The German owner ran it until financial trouble generated by his businesses in Europe forced Burke again into bankruptcy. The Northern Star Ski Corp. then purchased the mountain in December of 1995 and invested about $11 million into infrastructure and marketing efforts, seeing increasing skier visits over the first three winters until poor snow seasons helped reverse the trend.
The company's lender, B&I Lending of Atlanta, loaned the resort money in the spring of last year because of cash-flow trouble, but this year decided not to take the risk, leaving the resort with outstanding debts estimated at just shy of $5 million. That action forced a foreclosure and Saturday's auction.
The resort was divided into more than a dozen parcels for the auction, with the Burke Mountain Cross-Country Center being divided into two. The parcel with most of the trails was sold to a nordic ski enthusiast from Massachusetts who has said he wants to keep it operating while the other parcel was sold to an unnamed buyer.