"Just as Vail Resorts never challenged Intrawest's purchase of Copper Mountain, we will not stand in the way of Intrawest moving forward at Winter Park, provided that in doing so Intrawest does not violate its contractual non-compete obligations," he adds. "These obligations have been in force for nearly a decade."However, Wharton adds, the announcement that the city and Vancouver-based Intrawest have reached an accord that includes developing the base of Winter Park, "heightens in our mind the likelihood that these non-compete provisions have indeed been breached by Intrawest."
Key, he says, is that city plans to continue to own Winter Park.
"By contrast, for Intrawest to be able to proceed with real estate development at Winter Park, their contract at Keystone requires that Intrawest secure a 50% or more controlling interest in theski resort," Wharton says. "Denver boasts it is not selling Winter Park. By definition, Intrawest must take the contrary view. For, if Intrawest has not bought a 50% or more controlling interest of Winter Park, then Intrawest is in contractual breach."
But Gary Raymond, a top official at Intrawest, says there is no violation of the agreement with Vail taking place. He tells GlobeSt.com Intrawest will take 100% of the risk and if there are any losses or shortfalls, will absorb 100% of those. Intrawest also will own 100% of the operating company, he says.
That Denver will continue to own the land, makes no difference, he says.
It's no different than a shopping center developer operating a mall where the land is owned by a family trust, he tells GlobeSt.com. The mall developer will still lease all the space, maintain and operate the building, and take all of the risks, he says.
Closer to his business, he notes that many ski operators lease their assets, whether they be snowcats or even ski lifts. He also says that Intrawest hasn't until now been in a position to show Vail documents that detail its agreement with the city.
But Wharton says if "Intrawest has indeed violated its contractual obligations, then we will be left with no choice other than to protect our company's interests by commencing litigation in the very near term."
Vail's beef, however, is not with the city, he emphasizes."Rather it is with Intrawest, a business partner in our Keystone Real Estate Development Co. and with whom we have had a contractual agreement for nearly 10 years, who now appears at first blush to be violating its commitments to us."
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