At the time the ski area was sold in December, Intrawest reported that the agreement for the entitled land sale in the town of Mammoth Lakes was only preliminary. That agreement is now official, according to Intrawest. The sale of the assets to the JV is expected to close in two phases, one at the end of March and the other at the end of April.

Intrawest maintains a 15% stake in both the ski area and the entitled land. In the entitled land deal, Intrawest will act as development manager and provide marketing and sales management expertise and will earn management fees from future development of the real estate.

The real estate is entitled for about 1,100 residential units and 40,000 sf of commercial space. The transaction will result in a pre-tax profit to Intrawest of approximately $60 million. Pre-tax net proceeds to Intrawest amount to approximately $108 million, which will initially be used to pay down debt. The closing of the transaction will take place in two phases: the first is expected to close prior to March 31, 2006, and the second prior to April 30, 2006.

Intrawest will have a 15% interest in the joint venture partnership and will act as development manager and provide marketing and sales management expertise, thereby earning management fees from the future development of real estate in the Town of Mammoth Lakes. Intrawest chief executive Joe Houssian says the JV is in line with the company's strategy of maximizing return while shifting to "an expertise-driven business model."

Intrawest, based in Vancouver, BC, has interests in 10 resorts at North America's most popular mountain destinations, including Whistler Blackcomb, a host venue for the 2010 Winter Olympics. Starwood Capital, run by Barry Sternlicht and based in Greenwich, CT, manages a real estate portfolio valued at over $10 billion. Its investors include large state and corporate pension funds, endowments and high-net worth families.

In another recent Mammoth Lakes deal, a Southern California-based developer has acquired the 159-room Roadway Inn and adjacent restaurants (Igor's and Ocean Harvest) at the corner of Sierra Nevada and Old Mammoth Road in Downotwn Mammoth. The new owner plans to re-entitle the site for a 300+/- condo hotel with approximately 30,000 sf of street front retail.

The acquisition and re-entitlement is being funded with a $16.5-million, 65% loan-to-value financing arranged by Highland Realty Capital of El Sgundo, CA. With a majority of the development activity occurring in the ski area's Village area, Highland Principal Michael Guterman says there is opportunity in the Downtown area for redevelopment of the older hospitality and commercial core.

"Pricing for the condo hotel units in the Village is exceeding $1,200 per square foot on a pre-sale basis for the upcoming Ritz Carlton, while the Westin sold out phase 2 at $1,000 per square foot immediately following the one-day sellout of 140-units in phase 1" says Guterman. "There is a void in the market for reasonably priced product and we feel the downtown area will benefit from increased demand in Mammoth following Starwood's investment in the mountain."