theSheetNews.com

During his presentation to Mammoth Lakes’ Town Council Wednesday evening, Mammoth Mountain CEO Rusty Gregory opined that during the recent regional snow drought, “We fared better than our peers … which makes me the tallest man at a midget contest.”

A relative description, perhaps, but as town lightning rods go, the self-described 6 foot, 5 inches and 230 pound Gregory is hard to miss. Gregory used his presentation time before Council to give a detailed explanation of the 75 layoffs and other employee pay cuts that were enacted a week previously,

“I want to be very clear … the steps were very severe … but they were nobody’s decision but mine,” Gregory stated categorically. He further flatly refuted some speculation he’s encountered via local chatter and on blog sites that the layoffs were somehow ordered by Starwood Capital Group CEO Barry Sternlicht or by banks scrambling to avoid defaults.

“If we hadn’t the banks would have,” Gregory acknowledged, adding that “it’s important for lenders to see we’re ahead of what they’d do.” His preferred modus operandi: “React quickly rather than hope it goes away.”

Of the 75 positions eliminated, Gregory said that 17 were from either senior or top-level management. Some jobs, he posited, will likely need to be reinstated when things turn around. Back in the 1990’s 150 employees were laid off during what became known then as “Black Monday,” but Gregory pointed out that 80% of those employees were back on the job within 11 months.

Gregory said the cause the current crop of cuts was borne out of the regional drought. In terms of market demand, he illustrated that there is “a desire to go skiing until winter is over or demand is met.” If Mammoth doesn’t have snow, skiers will go to Colorado or Utah, and typically come back to Mammoth later. “That didn’t happen,” he explained. “We had early season snow, which can be precursor to a drought, but by the time ski season opened, no one had snow.”

He said that even if conditions improve for the rest of the ski season, MMSA’s revenues would still be off 30%. Half of MMSA’s roughly $150 million in projected annual revenue is paid out in wages, and things are costing more, such as fuel. MMSA had to spend more this year on water and electricity making snow, which he said was effective, but costly.

He said after a litany of salary reductions and hour-trimming measures, MMSA considered closing Chairs 12 through 14, but concluded that would lead to “false economy,” and send the wrong message to skiers.

One rumor floating around is that MMSA is being repossessed by the bank, which he dispelled, explaining that the company is in breach of operational covenants of its loan. According to Gregory, payment obligations, however, are being met.

In the near future, he expects Canyon Lodge to close after the spring holidays, as usual, and said June Mountain will continue to operate as long as it has snow. Gregory said MMSA will be ready to commit resources to summer when the weather is right.

Meanwhile, look for more job sharing among current employees, who will pick up front line duties, such as lift operations.

In other Council news, Interim Town Co-Manager Marianna Marysheva Martinez briefed Council on preliminary Town Budget deficits for fiscal years 2011-2012 and 2012-2013. Also pointing to low snowfall as a main contributor to the shortfall in revenue, Marysheva Martinez said so far the Town is looking at a $700,000 deficit, which could have been as much as $1.5 million had it not been for more conservative budgeting. She said less money will be earmarked for tourism, housing and transit as a result.

She also projected a $2.2 million gap in the following year’s budget, up a bit from $2 million. Neither projection, she added, includes any fallout from the ongoing airport litigation settlement.

The following letter was sent out this week to Mammoth Mountain employees by CEO Rusty Gregory.

A letter from Rusty

Dear Editor:

The company has completed its most successful Christmas and New Year holiday period in my 34 years on the mountain. Never in our history have we hosted so many guests with so little natural snow and produced such a high quality experience on and off the mountain.

I had the opportunity to talk to scores of guests over the last 2 weeks.  They were universally effusive about how much fun they were having and couldn’t believe that Mammoth had top-to-bottom skiing, the Unbound pipe and parks were going off, June was open, Woolly’s Adventure Summit had snow for the tubers, and that we even had cross country skiing up to Minaret Summit. They were wowed by the fireworks at Night of Lights and on New Year’s Eve, and had a blast at the concerts and DJ events. The Village rocked and they loved that we opened a day care and brought Sushi Rei back.

Many of our guests came to Mammoth from Northern California for the first time because the Tahoe resorts’ lower elevation and limited snowmaking capabilities only allowed the operation of a small fraction of the terrain and services Mammoth provided. A significant number chose Mammoth over their usual winter vacation spots in Colorado and Utah. You all worked very hard and performed wonderfully. From the bottom of my heart and on behalf of our guests and a grateful community, thank you very much.

But now, the crowds are returning home, the temperatures are warming and the weather is forecast to provide more sun than snow in the days to come. I know that all of you are wondering how the company intends to deal with the less than optimistic outlook going forward.

Here is what I know:

So far, this winter is the driest on record since the 1800s. I’ve talked to the heads of major resorts in California, Utah and Colorado. Each of them are cutting back on lifts, terrain and staffing to save money. Many think that the winter of 2011-12 will never really get started and the weeks and months to come will just bring more of the same.

Here is what I believe:

We operate the best mountain in the country and we run it better than other resorts run theirs. Skiers want to ski and boarders want to ride. This yearning and the demand it produces doesn’t go away just because Mother Nature isn’t cooperative. Mammoth is the skier and rider’s mountain.  When it snows, they will come. In my 34 years on the mountain, I’ve seen several severe drought years with little or no snow in October, November or December. It snowed by mid-January in each of those years.

Here is what we are going to do:

We are going to do the opposite of what other resorts are doing. We are not going to cut services to save money.  We are going to keep everything open – Eagle, Canyon, the Village, all the current lifts and all the terrain possible. If temperatures allow snowmaking, we will add more runs and lifts as soon as we can, even if it’s during the middle of the week when crowds are light. We are going to keep our seasonal and year-round employees. If hours of work get too thin for some, we will feed each of them every night to make it possible for them to stay in town. We will continue to operate all our shops and restaurants everyday on the regular winter schedule. Our rental shops will be renting all categories of skis and boards including demos, everyday.

We are going to do just what we did over the holiday, giving our guests way more than they expect, and way more than our competition. We will do it the Mammoth Way with big smiles, a positive vibe and the informal, authentically sincere service we are famous for.  Our guests will love us for it and they will come back.

I don’t want anyone to underestimate the company’s commitment to the quality of our guest’s experience or misunderstand their individual role in delivering it.

I wish each of you, your family and friends a happy, healthy and prosperous New Year.

Rusty Gregory, CEO
Mammoth Mountain Ski Area

For the Nordic record

Dear Editor,

An article published in the Dec. 17 issue shed some bright, positive light on the steady evolution of the Nordic scene in our community.

Competitive Nordic programs developed and provided by Eastern Sierra Nordic Ski Association have garnered the attention of Mammoth Mountain’s Race Department and are benefiting greatly as a result of their involvement and support. The Mammoth Mountain Community Foundation is also providing scholarships to offset team fees, travel costs, and education expenses based on need and performance. This type of significant support is crucial to the present and future success of local programs geared towards raising the caliber of homegrown, competitive Nordic talent.

The article also inadvertently compared the work of Mammoth Nordic with MLTPA. Given the recent scrutiny initiated by Sandy Hogan regarding the Town’s administration of Measure R and MLTPA, I  believe it is important to note how distinctly different the missions and objectives of our respective non-profits are:

Mammoth Nordic supports, develops and promotes Nordic Recreation.  We are an all-volunteer, non-profit organization providing a high quality, groomed Nordic Trail System free to our locals and visitors alike. Our Club is funded by contributions from our members, local business owners, second homeowners and visitors who value the experience we provide.

MLTPA is a well-compensated, taxpayer-funded consultant to the Town that advocates for trails and public access, fosters stewardship, and convenes and facilitates community participation. MLTPA is currently seeking to secure their operational financial stability over the next five years with a guaranteed $1.5 million dollar commitment from taxpayer-funded Measure R. Suffice to say, Mammoth Nordic supports Ms. Hogan and others who believe the relationship between the Town, MLTPA and the administration of Measure R is in need of an open and transparent review.

Brian Knox
Mammoth Nordic

So I’m home watching Nickelodeon with my daughter, and, cognizant of the recent report which stated that SpongeBob Squarepants has a negative impact on kids (clearly an overblown lie perpetrated by a bunch of desperate Univ. of Virgina academics, er, freeloaders on a research grant), we were watching Family Brainsurge instead. Lo and behold, during the part where they announce all the great prizes that a family can win, there’s an ad for a ski vacation. It looks like a joint promotion between Mammoth Mountain and the Westin Monache. Bizarro!  When, I wondered, did Mammoth start slumming in my (Nickelodeon) demographic?

A few days later, I had my answer.

MMSA CEO Rusty Gregory said this week that the company recently funded a major market research project to “really understand our market better.” He added rhetorically, “Are the things we’re doing what our customers want?”

Unlike research commissioned by the Town of Mammoth Lakes, which is typically stuffed inside a bottle and floated down Rock Creek in the hopes that a magic genie fish will discover it and grant Mark Wardlaw three wishes, the Mountain apparently gathers research and creates a strategy.

In this case, Gregory says the direction is to broaden the MMSA brand beyond athletic experiences, parks and pipes. “We’re hyper-focused right now on young families, singles and young couples,” he said.

What else is the Mountain doing? Well, given two solid years back-to-back and the recent company refinancing, MMSA is reinvesting in itself and spending some money. To wit:

1.) The new “High Five” high-speed detachable quad which will replace the former glacial Chair 5 triple. The bottom of the chair has also been relocated slightly to the west at the bottom of Coyote. The goal: much improved trans-mountain access.

2.) Radio Frequency Information Devices (RFID) installed at 19 lifts. Paper, scannable lift tickets are now a historical relic. New lift tickets will resemble hotel key cards, which will be read by the RFID, prompting the gates to open.

Once a guest has a card, he/she can log onto www.mymammoth.com and buy future tickets online and go straight to the hill.

The goal, said Gregory, is not only to reduce lift lines and congestion, but also to gain information which can then be used to flexibly target promotions to guests.

3.) The new food and beverage partnership with Levy Restaurants, which some may be familiar with as Levy has food concession contracts with the Los Angeles Dodgers as well as, closer to home, the Reno Aces.

Think of Levy as the new Patina.

This partnership, however, will take vows Gregory. It’s less about being different than Patina and more about timing, he says.

4.) MMSA is also in the final stages of reaching a deal with CNL to revive Sushi Rei, not only in the same location, but with the former proprietor Jaison Leroy.

Sheet: So what’s all this about? Were you just getting a little bored?

Gregory: No, I just have a little money. I’m never bored when I’ve got money.

And the spending’s not over. On tap for next year: a $10 million renovation of Canyon Lodge.

Village Parking 

Unfortunately, that interview came before I had a chance to ask Gregory about the fiasco otherwise known as the Village parking situation. Turns out the lot on the let’s call it north side of Minaret Road was closed to the public as of Thursday afternoon. The following note was sent to Village merchants on Thursday:

All,

I just want to let everyone know that I’ve been informed by the owner [Credit Suisse] of the parking lot that they need to block access until we have a signed lease. Per my understanding, the parking lot will be closed by the end of the day (November 3rd). We are making arrangements for parking availability during this brief period with the Neighborhood Company.

Please let me know if you have any questions.

-Jason Roland, Commercial Asset Manager, Intrawest Placemaking

Village merchants are understandably upset. What other mall in America doesn’t have parking? As one merchant griped, “The lot is being consumed vastly by day skier parking, hospitality guests staying at the Village, Village owner overflow and not equally commercial guests. Personally we are and have been against the continuation of being charged via CAM (Common Area fee) for commercial parking that should be provided by the landlord, at the landlord’s (CNL, Intrawest) expense like in every other commercial development or by the town via agreements made with the developer/landlord to provide for Village parking.”

John Lennon (along with some bloke named Paul) wrote “Lucy in the Sky with Diamonds,” which he performed at Madison Square Garden with Elton John in Nov. 1974 during his last ever live concert appearance. The photo has nothing to do with the story … we just thought it looked cool. Well, it was either this or a still of Sean Connery from “Diamonds Are Forever” – nah, too obvious! (Photo: George Kalinsky, MSG.)

Gregory pulls partner dollars, says new MHS Study Center is “priority”

Nearly 20 years ago, the Mammoth Lakes Foundation created the Diamond Partner program as a fundraising tool to help fulfill its mission statement: “The purpose of the Mammoth Lakes Foundation is to support higher education and cultural enrichment in the Eastern Sierra.”
The program started with one partner, ultimately reached a high of 25, and according to the Foundation’s Executive Director Evan Russell, included “20 or 21” participants this past year.
Russell said a $45,000 commitment over three years entitled members to:
*2 transferable ski passes at MMSA.
*A preferred MMSA parking pass.
*A Snowcreek Athletic Club membership.
*A Snowcreek Golf membership.
*An invitation to all Foundation events.
Russell said the program netted about $200,000 for the Foundation last year.
In turn, the Foundation spread this largesse throughout the community. Last year, for example, $50,000 went to local scholarships and about $15,000 went to the Felici Trio.
About two months ago, however, MMSA CEO Rusty Gregory notified Russell that he would like to see some changes in the program. Specifically, Gregory wanted to see the first $250,000 raised by the Diamond program go to local K-12 education.
As it is, Gregory and his wife Bonnie are personally donating $250,000 to Mammoth Unified’s 501(c)3 this year in lieu of his Diamond Partnership – though he hopes to backfill the donation later, if possible.
As Gregory sees it, “From Mammoth Mountain’s standpoint, we are committed to the community, especially to education, and the children of this community have been a primary focus of ours over the years … the whole college effort has been heroic and successful and continues to need support from us and others.
But it’s also clear that the K-12 programs are under siege. That is the acute need right now. We’re in an emergency situation.”
By Russell’s math, however, if he only netted $200,000 from the program and the Mountain wants him to give away the first $250,000 … he’s underwater.
So he has two options. Recruit more diamond partners or potentially rethink the entire program.
In the current environment, Russell and his Board are pessimistic about increasing sales the 30-40% necessary to meet Gregory’s demands.
In addition, some Board members have balked at the idea of rewriting the Foundation’s mission statement to accomodate the change. “Board members didn’t sign on for that,” said Russell. “My Board has told me to make sure we don’t lose focus because of the money.”
In the meantime, it’s a standoff with no immediate solution. Russell hasn’t officially said ‘no’ and Gregory hasn’t said what he’d do if Russell said ‘no.’
On a positive note, the Foundation, which turned 20 this year, has done some very impressive things. The student housing is built and enrollment is growing at a clip of 15-20% annually over the past three years.
The housing was over 80% occupied during the second semester of the 2008-2009 school year and what local students have said is that the housing has made Cerro Coso feel more like a real college versus a continuation school. Itr’s a broader mix than just seeing the same person across the room whom you just marched with in graduation three months earlier.
The Los Angeles Times lavished Mammoth’s Cerro Coso campus with a two-page spread this spring, extolling the virtues of going to college in the High Sierra.
And then there’s Deanna Campbell, the Director of the Eastern Sierra Coillege Center, whom Russell says is the best thing that ever happened to us.”
All of which, ironically, may make Russell and the Foundation a victim of its own success. Because the public perception is positive, the need doesn’t seem quite as dire. As Tom Cage (who’s been all over this issue) said this week, the college is built. Like Gregory, he sees the need at the high school level. And after years of being part of the Diamond Partner program, he’s pulled out this year to lend his support to Mammoth Now, a 501(c)3 non-profit set up under the umbrella of the Mammoth Unified School District.