June Mountain, CA to shut down for 2012-13

[Tony Crocker]

I saw that L.A. Times article this morning. IMHO it didn't add anything we didn't already know.

The Mammoth Forum thread is up to 62 pages:
http://forums.mammothmountain.com/viewt ... 13&t=13693

MRA posted videos of Rusty's 50 minutes addressing the June Lake meeting on July 10:
http://www.mrablog.com/june-lake-citize ... pitznagel/

Soulskier or someone in his organization deserves some credit here. If you're really interested in an issue, it's nice to have the source info to examine and not just depend on someone else's summary.

There's another meeting tonight in June Lake, I think mostly among the locals trying to come up with a game plan.

 

[soulskier]

MRA posted videos of Rusty's 50 minutes addressing the June Lake meeting on July 10:
http://www.mrablog.com/june-lake-citize ... pitznagel/

Soulskier or someone in his organization deserves some credit here. If you're really interested in an issue, it's nice to have the source info to examine and not just depend on someone else's summary.

Thanks Tony

 

[Tony Crocker]

Last night's June Lake meeting recap from p. 63 of the long Mammoth Forum thread referenced in my last post:

Meeting started out smoothly and hopeful. Recap of many meetings by local committee in the last two weeks that included Gregory, forest Service, Planning dept head, County Supervisors. Lots of research had been done in the last two weeks and emergency county supervisors meeting had been called for next Tuesday. Then Carl Williams (June Mountain manage) shot all the hard work down by stating June Mt will not open this winter no matter what. He said there absolutely was no time to finish chair maintenance and he had no staff. No matter what suggestion were put out, he said NO, NO NO.

Almost unanimously, committee and locals decided to proceed on our own to do what we can to somehow free June Mt from MMSA. Carl got yelled at, Forest Service got vented at. In the end lots of ideas were thrown around by younger segment of locals and business owners and residents. It looks 99.9% that June Mt will not operated this winter. I am hopeful that in the long run June Mountain will be back.

 

[soulskier]

Here's the recap from the newly formed Friends of June Mountain.

http://www.friendsofjunemountain.com/?q=node/9

 

[Tony Crocker]

During these meeting it was repeated that MMSA is demanding air subsidy and more bed space and also there is LITTLE time for action......As for beds the county can allow a Transit Ordinance that would allow second home owners to rent to vacationers.

This seems to me a no-brainer. I suspect most of the second homeowners are fishermen or other summer users. So this is a route toward creating an adequate and reasonably priced bed base.

John Adams stated he had asked cab drivers at the airport how much a cab to June Lake would cost and none could remember making a trip to June for a client.

We can debate about how important the airport is to Mammoth's future, but I think it's quite irrelevant to June's. June's best fit is the beginner/family market, which is price sensitive and resistant to paying for air travel for skiing IMHO.

 

[soulskier]

http://www.mrablog.com/friends-of-june- ... your-help/

 

[egieszl]

I'm sorry, but this part of the letter posted on that site to be sent to the California Senators is utter nonsense.

"A general public welfare concern is that if the mountain does not remain operational, telecommunication for the town of June Lake is placed at risk. All servicing communication towers are located on top of June Mountain."

The ski area should have no bearing on the future of those towers and access to them to maintain them. Communication towers are located on mountains all over the US with no ski areas to facilitate their access, operation or maintenance.

 

[rfarren]

Communication towers are located on mountains all over the US with no ski areas to facilitate their access, operation or maintenance.

That's not true, all communication towers are located on top of ski areas. Where there aren't ski areas, there isn't communication.

 

[Tony Crocker]

Someone made a public records request relating to the special-use permit granted by the United States Forest Service for the operation of June Mountain Ski Area. He received is a copy of the Draft Master Development Plan dated July 2008. A consultant hired by Mammoth Mountain, Ecosign Mountain Resort Planners, wrote the Draft MDP.

http://thesheetnews.com/archives/14858

The J1 chair has a capacity of 645 per hour. With most of its use as an access chair in the morning, it will need an upgrade for June to reach a sustainable level of skier visits.

 

[egieszl]

I like the article for the most part, but question the stated capacity of J1.

Chair J1, in theory, should have a capacity of 1,200 per hour, which is the standard for a fixed-grip double chair. However, in a practical setting chairs rarely achieve the rated capacity.

I think 90% utilization as stated is fair. I would further add that J1 is probably not operating nor setup to operate at full capacity (1,200 pph). My guess is the chair runs at a reduced speed (less than 500 fpm) and likely has fewer carriers to increase the spacing and time between loads.

Regardless, I think the stated capacity is wrong and here is why. For argument sake let's say J1 as configured has a rated capacity of 900 per hour or 75% of what the highest capacity fixed grip double could achieve.

Now let's apply the 90% utilization rule and you get a real world capacity of 810 per hour. In a 3-hour window a total 2,430 people could access the hill. In order to get a one hour line demand would need to equal 1,620 people in a single hour. If 2,430 people arrived to access the lift in a single hour there would essentially be a two hour wait at the end of the hour.

I'm not as impressed that 2,750 people were using the mountain in a single day and the statement of two hour lines seems like nonsense. I don't doubt there there were some lines, maybe reaching an hour at peak upload and download times, but on a busy day guests will arrive over a longer period of time than the 2.5 hours as stated. Some arrive earlier than normal, others later and the article also fails to account for the number of guests who may have used the mountain for a partial day. Would it be safe to say that 10% of the skiers/riders (275) that day were afternoon, half-day visitors?

The unknown in the entire equation is if the Face was open on this day and if so, the number of people who were lapping J1 in the peak upload hours thus increasing demand. That's one of the failures and limiting factors for June's capacity.

However, despite arguing that the chair has more capacity than stated I still think the J1 upgrade is critical for June Mountain's survival. The main access lift needs redundancy and shouldn't be replaced, but instead a second lift should be erected. An equipment failure on J1 renders the entire ski area useless. J1 is a major issue and limiting factor on the operation. Also, fixed grip chairs don't lend themselves to being ideal for lifts that are largely used to transport guests. A six-passenger gondola would be most ideal. A detachable chair a distant second.

I think off-mountain development is also critical.

 

[Tony Crocker]

A six-passenger gondola would be most ideal. A detachable chair a distant second.

This document from 2006 http://www.monocounty.ca.gov/junelake/d ... er%206.pdf is a $20 million master plan to upgrade June. $8 million of that is egieszl's desired gondola. The $20 million would require 117,000 skier visits to pay the debt service on the upgrades. That's in addition to the, say 80,000 required to break even under the current set-up. You could install gold-plated Deer Valley facilities at June and it would still not draw 200K skiers per year IMHO. By simple math that gondola alone requires 47,000 extra skier visits.

We've been here before. Dave McCoy probably spent fairly close to that $20 million in today's $ in 1986 on the QMC tram, J6 and probably a few other lower profile improvements. Visits grew to a max of 93,000 during the first 3 years, then stayed down below 80,000 for over a decade.

Good detail analysis of that 2006 plan here:
http://forums.mammothmountain.com/viewt ... 82#p239831

 

[egieszl]

That's nonsense.

An $8 million project, 100% financed at 15-years with a rate of 5% would require an annual payment in the sum of $760,000 or about $63,334/month. I'm making an assumption that you depreciate a ski lift over a period of 15-years and I'm probably a little low on the rate as well. However, it would seem to me that Mono County and local government might be willing to step in and help finance a project like this now. It doesn't take a lot of tickets to generate $760,000 in revenue. For the average resort that would be less than 10,000 tickets.

 

[Tony Crocker]

a rate of 5%

:-k :-k :-k
I found this reference in the marathon thread on Mammoth Forum:

The Mammoth Loan has a term of up to six years and an interest rate of 13.25%.

The above $75 million loan is part of the reason Mammoth has $27 million per year in debt service.

So a loan to build facilities at June will be at 5%? I don't think so. Actually, what bank in the current environment given June's history will make that loan at any price?

 

[soulskier]

Here's one for you guys. If June was a stand alone ski area, what would you chose for a daily lift ticket? Last year it was $72, and big brother Mammoth was $92.

 

[egieszl]

a rate of 5%

Actually, what bank in the current environment given June's history will make that loan at any price?

The government.

I agree the rate I used was too low, but it was an example to put it in perspective that $8 million is not an unreasonable investment.

I wouldn't make it and I personally feel the bigger issue is lodging. I was shocked when I read how many beds June has available. It's too few.

 

[Tony Crocker]

Here's one for you guys. If June was a stand alone ski area, what would you chose for a daily lift ticket? Last year it was $72, and big brother Mammoth was $92.

The short answer, which I suspect applies to 90+% of intermediate or better skiers making the 5-7 hour drive from SoCal and paying for lodging, is Mammoth.

I've analyzed Mammoth's ticket pricing before. The $90+ price is a single day or holiday price. Non-holiday discounts start with 3-day prices of ~$5-6/day less. For the most avid skiers the MVP is a great deal, paying off with respect to that weekend price in 8 days.

I analyzed Mammoth/June visitation on the big Mammoth Forum thread:
First issue, since Dave McCoy bought Mammoth in 1986, what percentage of skier visits come from June? There was a blip up in 1986-87 to 11%, no doubt due to all the upgrades installed that summer. FYI you may recall 1986-87 was an awful snow year, second worst in my Sierra data going back to 1967. So Mammoth skier visits fell 51% vs. the excellent 1985-86 season, which set a record that lasted until 2005.

1988 through 1998, when Dave McCoy was sole owner of MMSA, June visits averaged 62,389 and were 6.8% of MMSA’s total. 1999-2005 MMSA was jointly controlled by Dave McCoy and Intrawest. June visits averaged 70,215 and were 5.3% of MMSA total during that era. During the Starwood years of 2006-2011 June visits averaging 59,452 have been 4.7% of the total. The dip from 5.3% to 4.7% can all be explained by MMSA closing June Mt. at the end of January during the 2007 drought season.

In terms of raw skier visit numbers, the 95,023 in 2005-06 is the highest since Dave McCoy bought June in 1986. There have been 7 years over 80,000, the first 3 under Dave McCoy 1987 through 1989 and the 4 between 2003 and 2006, which are also the 4 highest in Mammoth’s history since 1986. All of this IMHO undermines the June locals’ argument that June’s attendance issues are due to MMSA’s marketing neglect. Unless you want to say the neglect started with Dave McCoy. And I doubt June’s attendance pre Dave McCoy was better considering the old facilities. Without Dave’s 1986 upgrades and ownership I think June would have died long ago.

Second issue is season pass visits. Mammoth did not have the capability to break out season pass visits through 1996 and assumed they were 9.1%. From 1997-2000 season passes were 15% of total skier visits. The cheap MVP’s started in 2001 and since then they have comprised 40% of MMSA visits. During the MVP era June season pass visits have been 4.6% of total season pass during 2001-05 (vs. the 5.3% of all visits) and June visits have been 4.5% of total season pass during 2006-10 (vs. the 4.7% of all visits).

So MVP use of June is slightly lower but really very similar to day ticket use. Therefore the June locals can’t make the case that MVP’s are disproportionately punished by June’s closure. However MMSA should not be subtracting out MVP revenue from June’s income statement either as June is very close to pulling its overall MVP proportion of visits. Therefore the annual loss attributable to June in that 7-year comparison chart is the $703,583 cash flow line, not the cash flow without MVP line of $1,578,186.

Aside from the accounting issue in the last paragraph, the numbers support Rusty's comments about June's visitation. It's been in a fairly consistent range since Dave McCoy bought the area. Visitation has risen/fallen in tandem with Mammoth visitation due to good/bad snow years, introduction of the MVP, the economy, etc.

Severing the relationship between Mammoth and June means to me that a lot of those MVP June visits would go away. I'm sure there are a few MVP's who preferred June and skied a high percentage of total visits there, but the aggregate MVP visit numbers lead me to believe that lost visits from the large number of MVP's who ski June occasionally will outweigh the extra visits from those who choose June over Mammoth.

The above lends credence to my view that June's survival is most likely as what someone on the Mammoth Forum called a "ski/snowboard hatchery." That plan works best in a cooperative arrangement where Mammoth provides incentives for beginners to utilize June, a scenario not so likely under the current environment of financial pressure.

FYI the big June thread got up to 73 pages and has been quiet this week. I would be very surprised to see June open in 2012-13. I will be interested to see what happens next year after a presumably normal or better season at Mammoth in terms of visits/revenue.

 

[soulskier]

So you don't think June Mountain can survive on it's own, with a lower price point and playing to it's strengths; authentic/non pretentious, a great family ski area and the best lift served back country skiing in the state?

Here's one for you guys. If June was a stand alone ski area, what would you chose for a daily lift ticket? Last year it was $72, and big brother Mammoth was $92.

The short answer, which I suspect applies to 90+% of intermediate or better skiers making the 5-7 hour drive from SoCal and paying for lodging, is Mammoth.

I've analyzed Mammoth's ticket pricing before. The $90+ price is a single day or holiday price. Non-holiday weekenders get a 2-day price of ~$5-6/day less. For the most avid skiers the MVP is a great deal, paying off with respect to that weekend price in 8 days.

I analyzed Mammoth/June visitation on the big Mammoth Forum thread:
First issue, since Dave McCoy bought Mammoth in 1986, what percentage of skier visits come from June? There was a blip up in 1986-87 to 11%, no doubt due to all the upgrades installed that summer. FYI you may recall 1986-87 was an awful snow year, second worst in my Sierra data going back to 1967. So Mammoth skier visits fell 51% vs. the excellent 1985-86 season, which set a record that lasted until 2005.

1988 through 1998, when Dave McCoy was sole owner of MMSA, June visits averaged 62,389 and were 6.8% of MMSA’s total. 1999-2005 MMSA was jointly controlled by Dave McCoy and Intrawest. June visits averaged 70,215 and were 5.3% of MMSA total during that era. During the Starwood years of 2006-2011 June visits averaging 59,452 have been 4.7% of the total. The dip from 5.3% to 4.7% can all be explained by MMSA closing June Mt. at the end of January during the 2007 drought season.

In terms of raw skier visit numbers, the 95,023 in 2005-06 is the highest since Dave McCoy bought June in 1986. There have been 7 years over 80,000, the first 3 under Dave McCoy 1987 through 1989 and the 4 between 2003 and 2006, which are also the 4 highest in Mammoth’s history since 1986. All of this IMHO undermines the June locals’ argument that June’s attendance issues are due to MMSA’s marketing neglect. Unless you want to say the neglect started with Dave McCoy. And I doubt June’s attendance pre Dave McCoy was better considering the old facilities. Without Dave’s 1986 upgrades and ownership I think June would have died long ago.

Second issue is season pass visits. Mammoth did not have the capability to break out season pass visits through 1996 and assumed they were 9.1%. From 1997-2000 season passes were 15% of total skier visits. The cheap MVP’s started in 2001 and since then they have comprised 40% of MMSA visits. During the MVP era June season pass visits have been 4.6% of total season pass during 2001-05 (vs. the 5.3% of all visits) and June visits have been 4.5% of total season pass during 2006-10 (vs. the 4.7% of all visits).

So MVP use of June is slightly lower but really very similar to day ticket use. Therefore the June locals can’t make the case that MVP’s are disproportionately punished by June’s closure. However MMSA should not be subtracting out MVP revenue from June’s income statement either as June is very close to pulling its overall MVP proportion of visits. Therefore the annual loss attributable to June in that 7-year comparison chart is the $703,583 cash flow line, not the cash flow without MVP line of $1,578,186.

Aside from the accounting issue in the last paragraph, the numbers support Rusty's comments about June's visitation. It's been in a fairly consistent range since Dave McCoy bought the area. Visitation has risen/fallen in tandem with Mammoth visitation due to good/bad snow years, introduction of the MVP, the economy, etc.

Severing the relationship between Mammoth and June means to me that a lot of those MVP June visits would go away. I'm sure there are a few MVP's who preferred June and skied a high percentage of total visits there, but the aggregate MVP visit numbers lead me to believe that lost visits from the large number of MVP's who ski June occasionally will outweigh the extra visits from those who choose June over Mammoth.

The above lends credence to my view that June's survival is most likely as what someone on the Mammoth Forum called a "ski/snowboard hatchery." That plan works best in a cooperative arrangement where Mammoth provides incentives for beginners to utilize June, a scenario not so likely under the current environment of financial pressure.

FYI the big June thread got up to 73 pages and has been quiet this week. I would be very surprised to see June open in 2012-13. I will be interested to see what happens next year after a presumably normal or better season at Mammoth in terms of visits/revenue.

 

[socal]

So you don't think June Mountain can survive on it's own, with a lower price point and playing to it's strengths; authentic/non pretentious, a great family ski area and the best lift served back country skiing in the state?

I don't think so. Hasn't it been "authentic/non pretentious, a great family ski area and the best lift served back country skiing in the state" for the past decade or so when it's been bleeding cash? I'm sure you'll say that it's Mammoth's fault but isn't it just possible a small ski area, in the middle of nowhere that's 30 minutes from a mega resort just won't make it?

 

[Tony Crocker]

isn't it just possible a small ski area, in the middle of nowhere that's 30 minutes from a mega resort just won't make it?

I do think that's the basic problem. IMHO the odds of survival are better in a cooperative arrangement with Mammoth, where the beginner/family market is encouraged to use June. Interestingly, in the late 1980's/early 1990's when few areas allowed snowboarding, Mammoth built some of the first parks at June to encourage snowboarding there while it was still not allowed at Mammoth. Needless to say the explosion of snowboarding in the Southern California market brought a swift end to that policy.

Most beginners come to Mammoth with more experienced friends, and many families have a wide range of abilities. The more experienced (by default leaders) of the group want to be at Mammoth, so inertia/logistics keeps the rest of them there too. So incentives are needed IMHO to split off those skiers/riders who would most enjoy June. FYI a first timer in Southern California on his or her own is probably not driving up there at all. Those people are trying the sport at Big Bear or Mountain High, where it's a shorter drive and they don't have to pay lodging. I know, because I was one of those beginners in the mid-1970's. I had 15 ski days at the SoCal local areas between February 1976 and March 1978 before my first Mammoth trip in April 1978.

 

[socal]

isn't it just possible a small ski area, in the middle of nowhere that's 30 minutes from a mega resort just won't make it?

I do think that's the basic problem. IMHO the odds of survival are better in a cooperative arrangement with Mammoth, where the beginner/family market is encouraged to use June.

Tough to see how that would work for Mammoth since I'd assume that selling beginner/intermediate lessons is a big revenue source for them. I'm sure Mammoth will say they're game to play nice but in the end, they want June off their balance sheet and since they're a business and not a non-profit would rather not be competing for high margin beginner dollars (rentals, gear, tickets, lessons).