A New York hedge fund is buying Maine’s premier ski resorts – Sunday River and Sugarloaf – as part of a $700 million real estate deal that involves 12 other ski areas and additional properties across the country. Day-to-day operations at the two Maine mountains are not expected to be affected.
The deal would transfer a package of properties held by CNL Lifestyle Properties, a real estate investment trust, to Och-Ziff Real Estate, an affiliate of a New York capital management group.
Within that package are 14 CNL ski areas valued at $374 million, including the two Maine resorts, Crested Butte in Colorado, Brighton in Utah and Sierra-at-Tahoe in California.
If the deal closes, it would be the largest ski resort transaction in the industry’s history, the Associated Press reported.
CNL Lifestyles had been seeking a buyer for its ski properties since last year.
Kansas City-based EPR Properties would retain the rest of CNL’s holdings, including a ski resort and 15 water parks and amusement parks.
“CNL Lifestyle Properties is proud to have built a unique portfolio of diversified properties, many of which are long-established and iconic of the American lifestyle, that created long-term value for shareholders,” CEO Stephen H. Mauldin said in a news release announcing the sale. “We have deep respect for the approach EPR takes to managing its properties and believe this transaction is the best fit for selling the remaining properties in our portfolio.”
MANAGED BY MICHIGAN COMPANY
Originally founded and managed by a ski club in 1950, Sugarloaf in Carrabassett Valley grew to become one the largest ski resorts east of the Mississippi. Maine entrepreneur Les Otten and his American Skiing Co. bought the property in 1996.
Otten, who had acquired Newry’s Sunday River in 1980, invested heavily in the resorts, adding condos and other amenities. He also acquired other ski resorts across the country, including Heavenly Mountain on the border of Nevada and California. But the company was burdened by debt from its rapid expansion and suffered a drop in revenue during a string of warm winters. Otten stepped down as CEO in 2001, but remained on American Skiing’s board as the company began selling its properties.
In 2007, both Sunday River and Sugarloaf were sold to CNL Properties for $77 million. They have been managed by Michigan-based Boyne USA Resorts, which at the time signed a 40-year lease for those properties. Long-term leases will not be affected by the sale, so Boyne will continue to oversee Sugarloaf, Sunday River and five other resorts included in this deal.
“There’s no impact on the operation of the ski area,” said Stephen Kircher, president of Boyne’s eastern operations.
INVESTMENT IN RESORTS EXPECTED
He said Boyne eventually plans to own the ski resorts it manages, including the two in Maine. While it is unclear when that would happen, Kircher said owning the resorts would allow family-owned Boyne to increase its investments in them.
“It’s something that fits with our long-term viewpoint on the business,” he said.
Kircher described CNL Properties as “good stewards” of its portfolio.
“I think the cooperative relationship we’ve had since 2007 has benefited the state of Maine and the resorts,” he said.
Over nearly a decade, CNL Properties has consistently made investments at the properties it owns, said Michael Krongel of Mirus Resort Advisors in Massachusetts, who has more than 40 years of experience with buying, selling and developing ski resorts.
“CNL willfully, gleefully, cheerfully provided growth capital for defensible projects at the portfolio that’s being sold,” Krongel said, such as a state-of-the-art hybrid lift installed at Sunday River in 2008.
What remains to be seen is whether Och-Ziff will act in the same way, he said.
Bruce Miles, president of Sugarloaf’s founding ski club, isn’t worried. He’s been skiing Sugarloaf since 1961, he said, and he praised Boyne’s management of the mountain.
He considers the sale good news, because each new owner has added lifts and snow-making to the mountain.
“Every time Sugarloaf has been sold, it’s been a positive experience going forward,” he said. “Usually a sale brings some new infusion of some capital.”
Megan Doyle can be contacted at 791-6327 or at:
mdoyle@pressherald.com
Twitter: megan_e_doyle
This story was changed from the original version to correct the name of Michael Krongel’s company.
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