June Mountain, CA to shut down for 2012-13

[soulskier]

June Lake, California-A Community Threatening to Become Extinct

http://www.mrablog.com/june-lake-califo ... extinct-2/

[Tony Crocker]

IMHO that article is rabidly biased with conspiracy theories that are not supported by long term history of the area. June Mt. would have died during the sustained stretch of low snow years from 1987-1992 had Dave McCoy not bought the area in 1986 and upgraded lift and snowmaking facilities.

Has June been neglected during the Intrawest/Starwood years? Yes, but what would be the justification of sinking any more $ into it given the visitation? We don't know how season pass revenue is allocated, but the best guess is that it's in the same proportion as total visitation, which is at a Mammoth-to-June ratio of about 25 to 1. The only constructive idea I can think of is to market more aggressively to beginners and families.

The most plausible explanation for the current situation is the same as for the February layoffs. Mammoth has excessive debt service from the Starwood purchase and thus has little margin for the revenue dips that will occur periodically in Sierra low snow years. Cutting a recurring loss gives Mammoth more breathing room to service that debt. Logically they should have tried 3,4 or 5 day-a-week operation before a complete shutdown. The fact that they didn't reinforces my view that the abrupt decision was due to the abrupt decline in revenue of the 2011-12 season.

I suspect Rusty would be delighted if some local group would step up and take June Mt. off his hands. Mammoth would get rid of the annual red ink and it would be someone else's problem to keep the area going and not be responsible for turning June Lake into a ghost town.

[Skiace]

IMHO that article is rabidly biased with conspiracy theories that are not supported by long term history of the area. June Mt. would have died during the sustained stretch of low snow years from 1987-1992 had Dave McCoy not bought the area in 1986 and upgraded lift and snowmaking facilities.

Has June been neglected during the Intrawest/Starwood years? Yes, but what would be the justification of sinking any more $ into it given the visitation? We don't know how season pass revenue is allocated, but the best guess is that it's in the same proportion as total visitation, which is at a Mammoth-to-June ratio of about 25 to 1. The only constructive idea I can think of is to market more aggressively to beginners and families.

The most plausible explanation for the current situation is the same as for the February layoffs. Mammoth has excessive debt service from the Starwood purchase and thus has little margin for the revenue dips that will occur periodically in Sierra low snow years. Cutting a recurring loss gives Mammoth more breathing room to service that debt. Logically they should have tried 3,4 or 5 day-a-week operation before a complete shutdown. The fact that they didn't reinforces my view that the abrupt decision was due to the abrupt decline in revenue of the 2011-12 season.

I suspect Rusty would be delighted if some local group would step up and take June Mt. off his hands. Mammoth would get rid of the annual red ink and it would be someone else's problem to keep the area going and not be responsible for turning June Lake into a ghost town.

I think it's an issue of collateral damage and ownership priorities. I agree that it's unlikely the June shutdown and permanent employee layoffs were planed, but that's not really relevant. The key issue is clearly the debt service, which is a result of corporate ownership over the last ~15 years. Debt was taken on during boom years to construct and sell real estate (with mountain improvements being used as a loss leader). This was done because of the short-term profit focus of corporate ownership, and it is a recipe we've seen repeated all over the ski world. Now the boom is over and the debt remains, so cuts will come indiscriminately. A more long-term oriented ownership group would not have taken on so much debt in the first place, and thus might be in a position to retain long term employees and keep June open (at least on a limited basis).

[soulskier]

I think it's an issue of collateral damage and ownership priorities. I agree that it's unlikely the June shutdown and permanent employee layoffs were planed, but that's not really relevant. The key issue is clearly the debt service, which is a result of corporate ownership over the last ~15 years. Debt was taken on during boom years to construct and sell real estate (with mountain improvements being used as a loss leader). This was done because of the short-term profit focus of corporate ownership, and it is a recipe we've seen repeated all over the ski world. Now the boom is over and the debt remains, so cuts will come indiscriminately. A more long-term oriented ownership group would not have taken on so much debt in the first place, and thus might be in a position to retain long term employees and keep June open (at least on a limited basis).

That's the smartest post I've read on this forum in sometime.

[Tony Crocker]

Capsule summary of Rusty's comments at June Lake meeting yesterday:

Rusty stressed air service and 1,000 more beds. He doesn't have a plan but is expecting the community of June to come up with a plan that he can present to the bank and investors. He said that June was closed as a result of various loans going into default if certain things weren't done. One of which was to close June.

He said he would sell June but didn't say for how much. He did say that there hasn't been an offer so far. Rusty said that he would be willing to let the community run the mountain if we can come up with a plan.

Rusty is willing to meet with the community again in two weeks. Many of the people that spoke, including Tim Alpers were adamant about getting June open this coming winter. There were many passionate speakers tonight, everyone that spoke had something constructive to say.

I came away with the feeling that June will be open again. Possibly this coming winter. I'm being optimistic and will stay positive.

This is kind of a summary, I wish you all could have attended. I think SnowNBeachAddict can add more, she was sitting next to me tonight.

BTW, the Rodeo Grounds has a sold sign on it. But MMSA has the right to 1st refusal. I think that's the term for it.

Also:

One comment from Gregory during the meeting - he said there were 33 applicants to buy MMSA the last time around, and about half specified that they were not interested in June as part of their purchase.

More here: http://forums.mammothmountain.com/viewt ... &start=570

Further confirmation that the excessive debt taken on at the time of the Starwood purchase is the fundamental problem.

[soulskier]

From last night's meeting in June Lake.

[Tom Moriarty]

Be nice to see a good management team formed and then present June to CNL. Seems like the type of property they may be interested in.

[Tony Crocker]

CNL is mostly involved in the real estate developments at the base of ski areas. So I doubt they would have the slightest interest in June. I think the ball is mainly in the court of the June locals.

He said he would sell June but didn't say for how much. He did say that there hasn't been an offer so far. Rusty said that he would be willing to let the community run the mountain if we can come up with a plan.

Suggestions such as mine about how Mammoth can market June more effectively are not likely to fly with the lenders who don't want Mammoth to spend any more $ there.

[Tom Moriarty]

Wrong Tony!

Mt. High has no base area development at all and they own it I believe and Karl owns the management company.

[Tony Crocker]

Mt. High also does ~500K skier visits per year. Big corporate investors like CNL buy the property, then lease it back to the operator who makes payments from ongoing operations. I do not see this happening with June's revenue stream.

I still see just 2 options:
1) Mammoth's satellite operation catering to beginners and families. It now seems unlikely that Mammoth's creditors will let Rusty try this.
2) Locals take it over and run on a low expense/coop/minimalist model.

[soulskier]

Mt. High also does ~500K skier visits per year. Big corporate investors like CNL buy the property, then lease it back to the operator who makes payments from ongoing operations. I do not see this happening with June's revenue stream.

I still see just 2 options:
1) Mammoth's satellite operation catering to beginners and families. It now seems unlikely that Mammoth's creditors will let Rusty try this.
2) Locals take it over and run on a low expense/coop/minimalist model.

How about your first and second options combined?

[Tony Crocker]

We have seen a lot of secondary areas go out of business over the next 20-30 years. I'd guess June's survival is more likely in a cooperative arrangement where Mammoth is actively pushing its weekend/holiday beginner/family business over there. If the areas are competitors I think June is more likely to fail, as it surely would have had Dave McCoy not bought it in 1986.

I'm not entirely sure June is doomed as a stand alone area. In 1986 across-the-board upgrades were needed. Now probably replacement of J1 is the only pressing need. Maybe some more snowmaking.

[soulskier]

We have seen a lot of secondary areas go out of business over the next 20-30 years. I'd guess June's survival is more likely in a cooperative arrangement where Mammoth is actively pushing its weekend/holiday beginner/family business over there. If the areas are competitors I think June is more likely to fail, as it surely would have had Dave McCoy not bought it in 1986.

I'm not entirely sure June is doomed as a stand alone area. In 1986 across-the-board upgrades were needed. Now probably replacement of J1 is the only pressing need. Maybe some more snowmaking.

Don't forget some solar panels!

[soulskier]

June Lake Citizen Advisory Committee Meeting Recap including videos

http://www.mrablog.com/june-lake-citize ... pitznagel/

[egieszl]

June Mountain needs the support of its elected leaders and citizens to survive. The people and elected officials of June Lake are largely to blame for its demise, not the corporate ownership of the mountain.

Both the owners of the mountain and Intrawest aggressively tried to get approvals to build on the Rodeo Grounds. Mammoth promised to invest in the necessary mountain upgrades if Intrawest was permitted to build the additional lodging that is badly needed (new more desirable and marketable places to stay at in June Lake). The people fought the proposals to their death and they're proud of that fact. They killed the ski area and they are to blame. You can't blame Mammoth Mountain management, Starwood or the investors.

I agree with Rusty Gregory and Mammoth/Starwood's conclusion that in its current state June Mountain is not worth marketing. The mountain does not provide an experience that is competitive with other ski areas that attract snow sport tourists. Those unfamiliar with the mountain likely leave disappointed and never return. The facilities and what the town is not competitive.

Earlier this year (February) when Mammoth was reporting all of the financial troubles I told my parents while in Colorado that I bet June Mountain would not survive past this season. The writing was on the wall and my prediction was accurate.

I will miss June Mountain very much. My family and I learned to ski at June Mountain in December 1981 and we spent a week at Christmas there in 1981, 1982, 1983. My parents would spend a second week in the spring of 1981 and 1982 playing catch up with learning to ski. We also spent a long weekend there in March 1986. That's the last family trip to June Mountain because we started going to Utah and then moved our family ski trips to Colorado. I've been to June Mountain on a few other occasions with friends or a ski club, but I can say that I would not go there today for anything more than a day away from a trip to Mammoth. The lodging and town do not meet my expectations.

June Mountain and June Lake are in desperate need of some upgrades, but the people have spoken and they don't want them. This is so typical of locals living in ski towns. They act like they're entitled, the fight change or progress and they fail to realize that their lifestyle is dependent on the ski area that really created the town, so they then work against the company that keeps the town afloat. I see this attitude in Aspen-Snowmass as well. Now what I see are a bunch of clueless locals pointing fingers and wishing the company they treated so poorly would keep the business going.

--

Tony, I don't believe June Mountain has snowmaking beyond coverage for Mambo and the area around the base of J2 and J6. At one time the mountain had hydrants on Slalom down off J5, but that was in the early 80s when they also had night skiing on that lift. If June Mountain had more snowmaking capacity they would've opened more terrain this past Christmas. No operator with a sane mind is going to miss out the week between Christmas and New Years.