Credit crunch puts Mount Baldy in arrears

JOE FRIES Thursday, April 2, 2009 Penticton Herald

Tight credit in the U.S. combined with a lack of snow in Canada has left the Mount Baldy Ski Corporation in arrears with some of its suppliers. Company president Brett Sweezy confirmed Wednesday that the business owes several hundred thousand dollars to a group of creditors, including food and parts suppliers. “We‘re going to our vendors and basically asking them for a little patience,” he said. The hill, about 35 kilometres east of Oliver, closed for the season last weekend, and all of its employees have been paid, Sweezy added. Because the ski hill does not generate enough cash to sustain itself, the company relies on credit to keep things going. However, with the financial meltdown in the U.S., some of Mount Baldy‘s credit dried up, leaving it without sufficient cash flow to cover expenses. Sweezy said now that the ski season is over, his company has made arrangements with most of its creditors and paying them off “is going to be our priority.”

Also contributing to the resort‘s woes was lacklustre winter weather that blessed the slopes with only about 60 per cent of their normal snow amount, which in turn drove down skier visits by about 15 per cent versus recent years, Sweezy explained. Three companies form the privately-held Mount Baldy Ski Corporation: ski operations, real estate and a water utility. That trio is in turn owned by a Canadian holding company, which is in turn owned by Canadian and American investors. The Osoyoos Indian Band also has a small stake in the corporation. Jimmie Spencer, the president of the Canada West Ski Areas Association, was surprised to learn of Mount Baldy‘s financial struggles, but said it‘s an isolated case as far as he knows. Other area hills like Apex, Big White and Silverstar are family-owned, Spencer said, and probably don‘t rely on U.S. banks the way Mount Baldy does. “We‘ve had a tough season, no doubt about it,” Spencer said, adding he expects traffic at all hills across Western Canada to be down five to 10 per cent this season, due to fewer overseas visitors. “The rest of the guys are pretty well OK from a long-term investment point of view,” said Spencer.

Mount Baldy‘s owners have invested upwards of $7 million in the resort since they bought out a community group in 2004. The corporation, led by Sweezy, has added a new lift system, upgraded the water system and moved forward with development plans for two new subdivisions. Sweezy said the parent company is now talking to Canadian banks and has about a dozen groups interested in either “wholesale” land purchases or buying all or part of the corporation.There was a significant deal in the works last fall that was on the verge of consummation, but it unravelled “purely due to the global economic crisis,” Sweezy added. Mount Baldy is not positioning itself as a rival to the larger resorts like Big White and offers far more affordable real estate aimed at the first-time family buyer. Sweezy said the company would also look at making the hill a four-season destination by adding attractions for hikers and mountain bikers, and perhaps a golf course at some point in the future.