Park City Resort has until Friday to post $17.5 million bond
Park Record - It may be another week before anyone knows whether Park City Mountain Resort will open for the 2014-15 ski season.
Friday afternoon, 3rd District Court Judge Ryan Harris said the resort must post a $17.5 million bond by the end of business on Friday, Sept. 12, in order to stay an eviction from the land it had been leasing from Talisker Land Holdings, LLC.
When asked whether PCMR would be willing to post that amount, the resort's lead attorney, Alan Sullivan, replied, "I have to consult with my client."
The bond hearing is one piece of a closely watched legal dispute which will determine whether Park City Mountain Resort, after failing to renew its long-term lease in 2011, can continue to operate on the upper terrain. The landlord, Talisker, contends PCMR lost that right. Talisker has since entered into an agreement with Vail Resorts to take over the property.
The hitch in a potential Vail takeover, however, is the fact that PCMR owns the base facilities and has previously said they are not for sale.
In June, Harris ordered PCMR and Talisker into mediation to try to settle their differences. Friday, after three extensions of Harris' initial mediation deadline, the parties reported they had been unable to arrive at a settlement and would be proceeding to trial.
Harris spent 30 minutes Friday carefully outlining his formula for the bond amount. He said that he approached it in the same way that he handles regular eviction cases while adding "This is certainly the biggest eviction I have ever seen."
The challenge, he said, was in setting a fair market lease rate for a unique piece of property, a ski area.
The final figure, Harris said, was based on a fair market value for the upper terrain of $5 million per year. According to Utah law landlords can ask for triple the amount of the lease rate, putting the initial figure at $15 million. An additional amount was added for interest capitalization and estimated attorneys fees for the coming year, bringing the total to $17.5 million - more than PCMR had suggested but far less than Talisker previously stated. The amount covers only the coming ski season and does not include previous year's rent.
PCMR said the bond should be set between $1.02 million and $6.56 million while Talisker wanted the bond set at $123.9 million. Harris dismissed both of those calculations while admitting that his own amount was a "back-of-the-envelope estimate" in an effort to come to some resolution about the coming ski season.
Harris added that PCMR could extend the bond period beyond the coming ski season in one-year increments with the amount of the bond increasing each year. For instance, he said, PCMR could post a $19 million bond next spring in order to maintain the stay of eviction through the 2015-16 ski season while the lawsuit continues to moves through the appeals process.
The uncertainty surrounding PCMR's coming ski season has put many Park City business owners on edge. One who has a large stake in the outcome is Mike Sweeney, an owner of the of Town Lift Plaza. Following Friday's hearing he said, "I'm just in the same state of mind as I was before We got the judge's answer. Now we just have to get PCMR's answer."
Park Record business editor Bubba Brown contributed to this story.
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