Pictured: Rusty Gregory speaking at Tuesday’s meeting/
June Lake community remains frustrated by pending June Mountain closure
Looking thinner than usual, Mammoth Mountain’s CEO attended the June Lake Citizen Advisory Committee meeting on Tuesday night. The June Lake Community Center was packed, filling two rooms and spilling into the hallway, and the meeting lasted for more than three hours.
It was the first time the public heard directly from Gregory since the announcement of June Mountain’s closure was made public on June 21.
Unlike many times past, however, his words did not soothe the crowd because he was unable to simply say he would reopen the Mountain for the 2012-13 season.
A common complaint in the weeks since the announcement has been the nature of it; abrupt. Gregory explained that it had been an extremely last minute decision forced upon him and his partners by their lenders.
Gregory explained that the company has eight lenders: six senior and two junior lenders.
In a non-drought year, Mammoth has revenues of about $45 million. $17 million goes to pay interest and $10 million goes to pay the debt down. The remainder goes to capital expenditures, Gregory explained.
This year, however, Mammoth only had about $23 million in cash flow.
“We were in default of our covenants and we worked for four months with Wells Fargo who reworked our covenants,” Gregory said. At least one of the other senior lenders needed to agree to the new covenants and at first all of the other senior lenders did agree, Gregory said.
However, one week before the Mountain would have been in default, the other banks said no to the new covenants. Instead, Mammoth was told to cut more expenses.
“June was one of those cuts,” Gregory said. “It was thrown in at the last minute, otherwise we would have been in default. We had to close it until we can do better.”
In order to appease the bank, Gregory said they would need to develop a long-term plan and a way to deal with the annual loss at June.
“I’m happy to continue operating at losses, but the issue isn’t the annual losses, it’s the purpose for those losses,” he said.
He asked the community to develop a vision for June. To which the community sharply replied that it had developed a vision back in 2006 when June Mountain went through a shortened season and June Lake formed the June Lake Coalition.
The Coalition reviewed the impacts of losing June Mountain and negotiated among its members to identify mutually beneficial planning solutions for June Lake and specific recommendations for the Mono County Board of Supervisors.
The group’s work can still be found online at http://www.monocounty.ca.gov/junelake/
“We know our vision, ask us,” said Double Eagle Resort co-owner Connie Black.
Gregory also pointed out, as many expected he would, that in order to be able to move forward, the community needed a larger bed base.
“We need another 1,000 units,” he said. “It won’t work for people to drive from Mammoth to June. At least 20 percent of the ski area’s demand needs to be in the bed base here.”
The Rodeo Grounds, still owned by Intrawest, are up for sale and listed for $2.9 million. The property would most likely be the spot for this bed base. As a joke, it seems, someone put a Sold sign on the For Sale sign at the Rodeo Grounds during Tuesday’s meeting. Gregory hadn’t heard of the Rodeo Grounds selling and pointed out that he would have the first right of refusal, anyway.
A call to June Lake realtors on Wednesday confirmed that the sale of the Grounds was not showing up anywhere on the MLS, or Multiple Listing Service.
In addition to bed base, Gregory also advocated intensely for support of air service.
“Air service is about to get canceled on a year-round basis,” he said directly to at least two of the Mono County Supervisors who attended the meeting.
“Byng and Larry, you need to give to air service,” Gregory said to Supervisors Hunt and Johnston. “Get off your asses.”
“I know damn well Dave McCoy would not be doing this today [closing June],” said the original owner of June Mountain, Bud Hayward, who attended the meeting. Hayward operated June for 27 years before selling it to Dave McCoy.
“I started June as a business and developed a plan,” he explained. “It was big enough to be profitable and it still is today, but it can’t be separated from land development. June Mountain operating without land development is a loser.
Members of the community have
made it clear they would like to see June Mountain sold to someone who “would love and nurture it,” but Hayward made it clear he had “no interest, whatsoever, financially.”
Gregory said he would be happy to talk to anyone interested and qualified to buy June, but that he would rather not sell it.
Inyo National Forest Supervisor Ed Armenta said he had met with Gregory earlier on Tuesday.
“We have let Rusty Gregory know that he is in non-compliance and will issue him a letter of non-compliance,” Armenta said to rousing cheers from the audience.
Armenta also said the Forest Service was going to require an audit of June Mountain to “make sure we are getting the straight story. Today was the first of many meetings with Rusty.”
In an effort to show that they were doing what they could to try to save June Mountain, the children of the community opened a lemonade stand and made $147.38, which they presented to Gregory at Tuesday’s meeting.
A young woman, Karrah Spitznagel, a 22-year resident of June Lake had collected more than 17,000 signatures on a petition to save June, which she also presented to Gregory on Tuesday.
“In a way I want to thank you, Rusty,” said Tim Alpers, Mono County Supervisor Elect, “you’ve galvanized this community like I’ve never seen it.”
Alpers did however warn that the ripple effect of a June Mountain closure would be felt from Topaz to Chalfant. His idea was to turn the Mountain into the greatest family resort in the country.
Gregory agreed to work with Black to get a group together in the next two weeks to begin to work on solutions to see if there would be any way to keep June open for the upcoming winter season, but he didn’t make any promises.
“I can’t do a one year commitment,” Gregory said. “It would be placating you to say it will open this year and I won’t bulls**t you.”
Gregory also pointed out that June Mountain needed to operate more efficiently by “creating demand to come here.”
“As much as you hate me tonight, we want to make it work,” he said. “Love it or hate it, Mammoth attracted capital.” He said the same needed to be done in June.
Members of the public called out that maybe he should start by marketing June Mountain better. It was also mentioned several times that a one year closure would lead to at least five more years of potentially worse losses while the mountain ramped back up.
When asked whether or not he could choose people over profit for one more year, Gregory said “We’ve done it for 26 years, we can’t do it anymore. It puts the larger community at risk.”