Fueled by mergers and buyouts, Americas corporate ski resorts are more about real estate than ski runs.
By Hal Clifford
Booms and busts are historical afflictions of mountain towns, but one industry was determined to defy the odds. Participation in skiing exploded after World War II, growing with the baby-boom generation. By the mid-1970s, almost 750 ski areas were up and running. But the downturn was easily predicted. Growth in "skier days" plateaued in 1980 and hasnt moved much since then. The population was aging.
This stagnation threatened the industry as a whole, but for the largest ski-resort developers in North America, it became an opportunityone predicated on turning once-folksy ski-lift operations into massive real estate ventures. By 2000, a trio of publicly traded corporations that sell one-fourth of the nations lift tickets had trumped demographics. That year, they reported combined before-tax profits of $212 million on $1.8 billion in revenue. At 12 percent, thats more than double the profit margin of the industry as a whole.
The future of skiing seemed to lie in the hands of the Big ThreeVail Resorts, Intrawest, and American Skiing Companyand that future could be found at their sprawling mountain resorts, like Killington, Vermont; Breckenridge, Colorado; Mammoth Mountain, California; and 23 others. The companies promised to revive the sagging fortunes of Americas most popular winter sport by two seemingly contradictory strategies: investing heavily in snowmaking, ski lifts, trail grooming, and new terrain, while making skiing itself a less significant component of business success.
From Stowe, Vermont, to Boyne Mountain, Michigan, to Truckee, California, privately held ski areas and ski resort companies concluded that they, too, had to play the Big Threes game. In the process, the sport of skiing morphed from a more or less environmentally benign outdoor experience into a destructive, extractive industry. Environmental damage increased as ski areas sprawled. And it was all made possible by the U.S. Forest Service, the developers "partner in recreation," which leases public acreage for ski runs, allowing resort operators to scar mountain slopes with clearcuts and turn quiet alpine valleys into real estate bonanzas.
Real estate development alongside ski resorts is nothing new. As early as the late 1950s, the founders of Vail were selling home sites to help pay for their new ski area, and in the late 1960s the developer of Snowmass, Colorado, made it clear that his goal was to build a condo village at the bottom of his mountain. But the massive shift to winter sports as a "loss leader" that propels revenue from more lucrative operations at the base of the mountain took new systematization, financial clout, and marketing genius.
Baby boomers were moving into their peak earning years, the time when people buy vacation homes, and company accountants eagerly did the math: If boomers buy vacation homes at the same rate as their parents, the number sold annually could jump by a third or more, rising steadily until 2013, when the youngest boomer is 49 years old and the buying binge is expected to begin a long decline. Intrawest, for one, has built or plans to build about 23,000 residential units and 1.59 million square feet of commercial space at 14 North American mountain resorts.
The transformation from ski business to big business was summed up by Joe Houssian, CEO of British Columbiabased Intrawest, who described his work as "a marriage of snow and steel, land and lumber, membership and service to create a company that redefines the mountain resort industry." Vail Resorts puts it more bluntly in its 1997 annual report: "To facilitate real estate development, VRDC [Vail Resorts Development Company, the firms real estate arm] invests significant capital for on-mountain improvements. These improvements enhance the value of the companys real estate holdings." Skiing would be the carnival barker, the come-on to attract people to the real action: real estate sales and shopping in new "villages" at the base of the slopes. The strategy worked. At Beaver Creek ski areas Bachelor Gulch, VRDC sold 106 home sites for an average price of $900,000 apiece after installing a chairlift through the subdivision.
The impact of all that new bulldozing goes beyond the private land chopped into lots on valley bottoms. Development of vast acreages of adjacent public land for ski runs and lifts also takes its toll. The Forest Service leases approximately 168,000 acres to 136 ski resorts in 15 states, offering generous 40-year leases and charging an average of just 2.5 to 4 percent of the resorts gross revenue. In its year 2000 assessment of the proposed management plan for Colorados White River National Forest, the EPA concluded that "no other land management prescription on the Forest directly results in more stream water depletion, wetland impacts, air pollution, permanent vegetation change, or permanent habitat loss" than ski areas. (This in a forest whose final management plan, released in June, allows 12.4 million board feet of timber to be cut annuallyincluding logging on two-thirds of the forests 600,000 roadless acres.)
Whether theyre bunny slopes or double-black-diamonds, ski runs are permanent clearcuts. Air quality in car-dependent mountain towns has often failed to meet federal clean-air standards. Biodiversity in woodlands surrounding ski areas drops significantly as a consequence of year-round disturbance. And snowmaking creates or exacerbates drought conditions in mountain streams.
But the most significant impact is the sprawl fostered just beyond the resort boundaries. When Vail Village was created, the idea was to build a tight, Tyrolean-style cluster of buildings on a few hundred acres in a rural valley. Today, the town of Vail is 10 miles long and the Vail community runs for at least 18 miles along the Eagle River valley floor, which is broadly covered by condominiums, single-family homes, and ten golf courses.
As real estate prices climb, nearby land succumbs to bulldozers. The American Farmland Trust concluded that "private valley lands near ski resorts are prized as noncommercial ranchettes. . . . It is this virtually unconstrained market pressure, encouraging the sale of working ranches to absentee owners, that is seen as the principal threat to the ongoing viability of the traditional ranching communities."
Sprawl is always hard on wildlife, doubly so when it consumes critical habitat. The mountain sites so valued for vacation homes and golf coursessouth-facing slopes near rivers and streamsare often on essential calving or forage terrain. For instance, a golf course opened up 820 acres on the flanks of Big Mountain ski area in Whitefish, Montana. Foraging grizzly bears, a threatened species, avoid crossing open land. Instead, they move downhill looking for cover. That leads them straight into town, where they are likely to come into conflict with humansa conflict bears usually lose. (See "What Grizzlies Want," July/August 2002.)
Bachelor Gulch Village, just down the Eagle River from Vail, was built in one of the last places where the resident elk herd was able to find winter forage and cover. The animals already had been pushed out of their traditional wintering grounds around the ski area base and the valley floor. After construction began, during the winters of the late 1990s several hundred starving elk charged across the four lanes of Interstate 70, which follows the Eagle River valley, in a desperate hunt to find forage and refuge on the north side of the highway.
The Canada lynx also found itself evicted by ski-resort development. For a decade, Vail Resorts wanted to add 855 acres of terrain to its ski area, but the landpart of White River National Forestwas considered some of the best habitat in the state for lynx, a species listed as threatened during the late 1990s. Biologists with the U.S. Fish and Wildlife Service concluded that ski area expansion would doom an entire regional population by severing lynx in the southern Rockies from those north of I-70.
But in 1998, political appointees at the Fish and Wildlife headquarters in Washington overrode field staff, stating that Vails expansion would not jeopardize the lynx and could go forward as planned. The biologists knew otherwise. "If we couldnt call jeopardy in this situation," says former Fish and Wildlife biologist Gary Patton (whos now with the Forest Service), "we couldnt call jeopardy in any situation."
Despite immense publicity stirred up by a $12 million fire at Vail in October 1998 (which the extremist Earth Liberation Front claims to have set), the expansion area opened to skiers in January 2000. Unlike the elk, the lynx will vanish quietly, one more dropped strand in central Colorados tattered web of biodiversity.
Most Americans assume that the U.S. Forest Services job is to protect wildlife habitat on public land. But these days, the Forest Service talks of "customers" and "branding" and "marketing" recreation. One of its proudest accomplishments is a 1994 agreement between the agency and the National Ski Areas Association, which represents 326 ski areas that provide some 90 percent of the nations skier days. The "National Winter Sports Partnership" obliges the Forest Service to spend taxpayer dollars on behalf of the ski industry.
The pact reveals how the agency views the ski industry, which it is supposed to oversee and regulate. "Our success in achieving the goals of the Winter Sports Partnership is dependent on the strength of our relationship with our ski industry partners," declares an overview document from a top Forest Service official. "These relationships are, in large measure, based on how we as an agency help our partners achieve business success."
This attitude may explain why the Forest Service supported a 1990s proposal to expand snowmaking at Breckenridge, noting in its final environmental assessment that "reliable early season [snow] coverage is critical in obtaining advanced reservations from out-of-state destination visitors." Snowmaking, by producing white slopes that can be shown in October on the Weather Channel, would help Breckenridge owner Vail Resorts "achieve business success."
Its obvious what the ski industry gets out of the Winter Sports Partnership. Ski areas can put a green veneer on their operations, installing taxpayer-funded kiosks and dioramas about geology and animal tracks on ski mountains and then issuing press releases about their sensitivity to the environment. And its certainly true that ski- and tourism-related business owners in ski towns often clamor for more development, more marketing, more lifts and snowmaking and terrain. But what does the Forest Service get? Visibility. Winter Sports Partnership documents insist that Forest Service signs and logos and banners be placed in and around ski areas and events, and even that banners be positioned so they would be within camera range at ski races. A major problem the agency faces, according to Partnership documents, is that few people know that the agency provides all this great skiing terrain theyre enjoying.
The ski industry is not deaf to criticism that it leaves a heavy footprint on the land. In recent years ski companies have taken pains to paint a green image. On Earth Day 2001, Keystone Resort (owned by Vail) proudly unveiled an "environmentally friendly" information center at its base development at River Run. Recycled materials were used in the buildings construction, and solar-powered lights help cut the electric bill. The purpose of the center, according to Keystones environmental coordinator, is to "educate and motivate guests to make Earth Day every day."
But when compared with a real impact like snowmaking, these efforts are little more than greenwashing. When Keystone makes snow by drawing water from Colorados Snake River, it lowers levels in an already abused waterway, exacerbating low-flow drought conditions well into winter. Such conditions reduce invertebrate life and shrink or destroy fish habitat. Yet snowmaking has grown nationwide during the last two decades, largely to take the uncertainty out of ski vacations and to compensate, especially in the Northeast, for low-snow winters. "Snowmaking is creating deserts out of our rivers," says David Carle, executive director of the New Hampshire environmental group Conservation Action Project. The only reason the ski industrys water withdrawals havent been found harmful is "because nobodys looking," he says.
A major resort might spend as much as $1 million annually on its power bill for snowmaking. Four of Vermonts six largest emitters of nitrogen oxide are diesel generators used to power snowmaking equipment. In Colorado, where 83 percent of electricity comes from burning coal, snowmaking is effectively the process of turning coal into snow.
While the ski industrys pioneers were often environmentalists, todays big players are more committed to green PR. "The environment is a ski areas number one asset," declared Michael Berry, president of the National Ski Areas Association, in his introduction to "Sustainable Slopes: The Environmental Charter for Ski Areas." Released in June 2000, the effort was paid for in part by the Forest Service, which pitched in $30,000 under the auspices of the Winter Sports Partnership. Ski resorts hailed the document as proof that the sport really is environmentally friendly. It contains some nice ideas: resource efficiency, pedestrian-friendly development, waste recycling, reduced impacts on wildlife and air quality, environmental education. But nothing in the charter obliges any ski area to do anything. The text is peppered with such phrases as "where appropriate," "in a responsible manner," "where possible," "explore opportunities," and "minimize."
Intrawests Joe Houssian encapsulates the feel-green ethic: "We will grow our resorts within an environmental set of principles and maintain the pristine nature of these valleys while at the same time providing new facilities," he says. But Intrawest, in partnership with Vail Resorts, intends to build nearly 3,000 housing units in Keystones 9,300-foot-high Snake River Valley. Whats "pristine" about that?
What Intrawest and its imitators care about most is not skiing or the natural environment, but growth and income. In that, theyre not all that different from other extractive industries on mountain lands. In this case, the corporate ski industry treats nature as a place to be mined, as much for real estate resources as recreation.
Hal Clifford lives and works in Telluride, Colorado. Downhill Slide: Why the Corporate Ski Industry Is Bad for Skiing, Ski Towns, and the Environment, from which this is adapted, was published in October 2002 by Sierra Club Books.
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