They’re loving it
Gregory, Smith paint picture of Mammoth Mountain Ski Area’s future
Richard and Maurice McDonald established the first McDonald’s restaurant at the corner of West 14th and North E streets in San Bernardino, Calif., in 1948. At about that same time — only a handful of years earlier in fact — Dave McCoy, a former Los Angeles Department of Water and Power hydrographer, had set up Mono County’s first rope tow and won the bidding for a Forest Service permit to build a ski area on Mammoth Mountain.
Both businesses were started as small, family-owned operations, with modest goals. But time and popularity tend to change all that, and just as McDonald’s was swept into the upper stratosphere of big business and franchising, it was only a matter of time until Mammoth Mountain Ski Area would also outgrow its humble beginnings.
On Tuesday, Nov. 15, MMSA CEO Rusty Gregory and VP Real Estate Jim Smith met with Coldwell Banker Mammoth Real Estate agents to unveil plans for a new large-scale renovation and expansion of the ski area. Weathering the real estate and national economic ups and downs of the 1980s and 1990s, Gregory’s focus is on the future.
And we’re not talking just a few new chairlifts, i.e. the recent upgrade of Chair 5, which debuts this season. Recapitalizing the Mountain’s debt freed up capital, he said, leading to the upgrade of 5, which has been moved to the base of Coyote Run. Plans and concepts are being readied for big changes to Eagle, Canyon and Main Lodge sections, with everything from new buildings to daycare centers to new eateries and more on the drawing board.
“We’ve come a long way from the days of Dave McCoy,” Gregory said. Talking about the world of capital and debt the Mountain now moves within, in particular its ownership by Barry Sternlicht and his Starwood Capital Group, Gregory went on to say, “We’re now players on the world stage. Equity and debt are really just the same thing; they’re just at different spots on the food chain of the world capital markets.”
Gregory is a 15% shareholder in the privately held MMSA company, which also boasts other big-name owners such as former 20th Century Fox CEO Barry Diller and sports agent Casey Wasserman, grandson of former MCA and Universal Studios CEO Lew Wasserman. MMSA, Gregory explained, is a half-billion dollar part of Sternlicht’s newest funding portfolios, which also boasts Baccarat Crystal and at one time included Taittinger Champagne. “[MMSA] is worth $100 million more now, and there are buyers interested in it,” Gregory said. “We want to be affordable to new buyers, as debt goes and money comes in.”
Pointing to a strong opening weekend this season (Saturday, Nov. 12, logged 4,000 skier visits), Gregory said that in 2005-2006, there were 7 million skier visits in California ski areas. MMSA had about 20% of that at 1.6 million. Last year, taking the recession into account, MMSA was still strong, but off about 20% from its peak season, which Gregory is out to remedy going forward, using new tools, such as the Radio-Frequency Information Devices (RFID) passes and scanners and keeping more mid-level runs open on snowy days, such as chairs 22, 5 and 3. A new free app, Mammoth To Go, allows pass holders to purchase more lift tickets and add them on directly to the RF passes without waiting in long ticket lines. (Tickets can also be added using www.mymammoth.com.) The goal, according to Gregory in a previous interview with Lunch, is “not only to reduce lift lines and congestion, but also gain information, which can then be used to flexibly target promotions to guests.” Those guests, he told the Coldwell audience, include families, and young singles and couples as MMSA’s main target groups.
A long timeline, involving a tremendous amount of funding, means the plans, while grand, won’t happen overnight, but some have either been started or will soon commence. A pending vote by the Los Angeles Department of Parks and Recreation approving a lease to MMSA for Camp High Sierra, located off Lake Mary Road and a 21-acre proposed land trade at Main Lodge are both in the works.
“There are no [immediate] plans at the moment, but we need to own [the Mammoth Mountain Inn] land to finance those plans,” Gregory said. One concept mulls the idea of demolishing most of the present Main Lodge building, and setting up new skier services across the street from the current location.
Additionally, $10 million is planned to be spent on major upgrades to Canyon Lodge, and would involve far more than just changing the paint color. As Gregory put, “It’ll be more than just putting lipstick on a pig.” Eagle Lodge will get a new full-service base facility, instead of the sprung structure there now, as well as an all-new restaurant. Work could start on Canyon as early as summer 2012, and new construction on Eagle by 2013, “if things go well.”
Main Lodge, by comparison, is a much bigger proposition, calling for a massive 3- to 4-phase redevelopment, which might cost as much as $500 million to $600 million. Smith pointed out that any redevelopment at Main remains conceptual, and will be largely contingent on the land trade to finalize and the market to come back. Assuming the land trade goes the distance, the earliest Gregory and Smith project for completion of the trade itself would be 2013. Add another year or so for entitlement work, blueprinting and budgeting, and Smith estimated it might not be until 2015 before a shovel goes in the ground.
New lodging is part of Main Lodge redevelopment, a good portion of which is expected to be “for sale,” according to Smith. Also conceived are additional hotel properties, which would generate transient occupancy (room) tax. Even some of MMSA’s holdings in the Village at Mammoth are getting makeovers. Hyde Lounge is undergoing a bit of “reconceiving,” and Sushi Rei is re-opening with a new “action sports vibe.” Both are being run by Levy Restaurants, a Chicago-based company with extensive food service experience, including large-scale venues such as the Staples Center, and 32 other arena facilities across the country.
And, for the first time since its inception, the Village could soon be the home of a daycare facility. “We bought land in the Village when property was $4.50 a square foot, $150,000 an acre and no one wanted it,” Smith pointed out. Just up the road from the Village, MMSA has also purchased the Sledz kids park, and is putting in a new “carousel” feature and expanding tubing lanes to six. A new bar for parents is slated for 2013.
Pass pricing even made it into the presentation, with Gregory maintaining that the daily ski pass rate, which was increased again this year, is being held under the $100 threshold, and emphasized other discounts. The Senior individual ticket price went up 100% over last year, but the new Senior Pass, at $399, brings that down 50%. Kids 12 and under tickets used to be $49 per day, but are now reduced to $30, which Gregory said makes them the cheapest of any ski area in the West.
Gregory didn’t shy away from a question about the Mountain’s perceived disconnect with the town. “There’s no disconnect, but the two are not exactly in sync,” he posited. “We haven’t been very good at that.” He added his vision of better distribution of rental properties in town. “We’re not into closing people out, but getting them to compete,” Gregory suggested. “We want to come down from MMSA and develop more joint business ideas.” He cited Main Street’s redevelopment process as one example. The concept work and Neighborhood District Plan are parts of the long-term goal. “The Gateway, including Elizabeth Tenney’s sign project, is a kick start,” he said. “We want to work with the town on more signage and wayfinding, from the airport through the town all the way up to MMSA.”
Gregory pointed to a need to “get the arguments out of the way” about “how big and how dense,” and “get on with things before big business comes in and does it for us.” He also placed an emphasis on fast-tracking more guest relations and business education programs. Gregory praised Jack Copeland’s successful Ambassador program, and supports a BA/MBA course track Copeland’s developing in conjunction with Cerro Coso College, that will be open to roughly 25 applicants, as well as the Mammoth Lakes Chamber’s Guest Services program.
One of the biggest fans of the new development plans is Coldwell Banker Broker Sheryl Saari. “It makes a big, bold statement, that we have optimism about the town, the real estate market and the economy moving forward,” she commented.
