LUDLOW, Vt. — After creating a buzz throughout the snowsports industry with a bold financing move, Tim and Diane Mueller went to the podium in mid-December and explained themselves. In a candid and very upbeat news conference on Dec. 14, the Muellers said they have no immediate plans to leave Okemo and that the resort is theirs to operate in the wake of a major deal with CNL Lifestyle Properties Inc.
“We own the business. We operate it. The employees are ours,” Tim Mueller said.
In a joint news release dated Dec. 5, Okemo’s parent company, Triple Peaks LLC and CNL, a real estate investment trust that focuses on recreational holdings, announced that CNL has acquired Okemo, Crested Butte in Colorado, and the operating rights to Mount Sunapee in New Hampshire. The price was not disclosed, but industry sources say it is a $132 million sale and lease-back arrangement that allows the Muellers to keep operating the three resorts with more leverage to complete several ongoing capital projects.
“We look at it as a form of financing,” Tim Mueller said. “It’s not a whole lot different than a company leasing back office space.” The Muellers said that the extra capital will allow construction of the Red Lady Lodge at Crested Butte to proceed and the conference center and 9-hole golf course at Okemo’s Jackson Gore to be constructed. The Muellers said that when “the real estate funk” rebounds, plans to install a gondola at Okemo’s Jackson Gore will be put back in place.
“We’ve been doing this for 26 years, and this concept takes a little getting used to,” Diane Mueller said of the arrangement. “But really, for us, the concept is the business.”
Tim Mueller said that much of Triple Peaks’ debt is structured as short-term with fluctuating interest rates. He said CNL had been courting such a deal for about three years and it made sense to abandon the banks and make a move.
“We knew that someday, that was an option,” he said. “We could see in the summer that the banks were falling down. With CNL, we were able to protect the assets with a lot less financing.”