Okemo’s 2004 Master Development Plan

NOTE: The 2004 MDP documents (at bottom) were scanned in 2004 from original copies obtained at the Newbury NH Town Hall.

On June 1st, 2004, Okemo released its first Master Development Plan that included their proposed West Bowl expansion on Mount Sunapee.

The plan included many references to Okemo’s real estate development intentions.

For specific references to Okemo’s real estate development plans, go directly to the following excerpts:

From Page 57 of the 2004 Master Development Plan:

I. WEST BOWL REAL ESTATE POTENTIAL

Figure V-3 illustrates the potential real estate development area at the base of the West Bowl expansion terrain. There are no detailed plans for this area, which has the potential capacity for 175-250 units. This potential development will require potable water supply and a wastewater treatment facility to be developed by Mount Sunapee, in accordance to the New Hampshire Department of Environmental Services regulations. In addition, any future development will require power distribution and road infrastructure. The 2005 Environmental Management Plan, and supporting studies, describe the potential impacts of the West Bowl expansion including possible real estate development on: wetlands, wildlife, traffic, regional economics, watershed drainage, and visual quality.

Also the see Okemo’s map (right) from the plan, which depicts the land area where real estate was proposed.

As the quote above suggests, most of the appendixes to the 2004 MDP (at bottom) include analysis and suppositions about the impact of their proposed real estate on the mountain, Goshen, and the surrounding communities.

Of particular interest is their Economic Impact Report, which states on page 2:

Proposed expansion plans include the construction of 175 to 250 seasonal housing units that would be located in the Town of Goshen. These units would include a mix of hotel-style condominiums, townhouse condominiums, and single family dwellings. Some of the units are likely to be fractionally owned and managed by a private association.

Also, the report (on page 15) states the housing units are integral to the plan:

Along with the proposed ski area improvements discussed above, the expansion plans also envision the creation of approximately 175 to 250 seasonal housing units near the resort’s base area in Goshen. These units would be created primarily as ski resort housing and as such, would be accessible to the West Bowl expansion area either directly onto the slopes/trails or by some other means (such as lift access or shuttle service). Therefore, these housing units are considered to be an integral part of the expansion plan but would be developed, owned and operated as a separate entity under the auspices of the management company.

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DRED Policy Requires Full Disclosure of All Potential Real Estate

In February 2002 then-Commissioner George Bald issued a statement in which he outlined the conditions under which DRED would bring the proposed expansion to the Governor’s desk for approval. Among many requirements he placed upon Okemo was this:

Okemo will reopen the Master Development Plan or create a new 5-Year Master Development Plan that will include plans for the use of the additional land in the area created by the expansion of the lease boundary.  The proposed plan will encompass all proposed development activity associated with their management of the ski area, and any adjacent land Okemo intends to develop. The new or revised plan must then be reviewed and approved through the process required by the Lease and Operating Agreement.

In 2004, Commissioner Sean O’Kane reaffirmed this expectation.

To our knowledge, no subsequent DRED Commissioner has rescinded or changed this clear requirements.

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2004 Proposed Master Development Plan Documents

Okemo Master Development Plan with Real Estate 2004 (6.2 MiB)

Okemo Environmental Management Plan 2004 (2.5 MiB)

Appendix E Base Area Well Evaluation 2004 (1.9 MiB)

Appendix F Wastewater Facilities 2004 (356.8 KiB)

Appendix G Wetlands and Water Survey 2004 (1.3 MiB)

Appendix H Snowmelt Drainage 2004 (1.2 MiB)

Appendix I Traffic Impacts 2004 (2.1 MiB)

Appendix J Wildlife Study 2004 (321.5 KiB)

Appendix K Economic Impact Study 2004 (1.4 MiB)

Map West Bowl Skiing Proposal 2004 (1.1 MiB)

Map West Bowl Real Estate 2004 (1.0 MiB)

Map EMP-2 2004 (1.0 MiB)

IMPORTANT NOTE: During the 2004 MDP process, many of the participants in the process thoroughly debunked and discounted several of the assertions made in these documents above.

What is the Real Estate Potential Worth?

On April 21st, 2014, Okemo’s attorney presented an opening statement before the Merrimack Superior Court that included the following statement on Okemo’s “lost value” due to Governor Lynch’s rejection of their expansion plan in 2005:

What did my client lose?… A lot of money, a lot of value. They certainly lost the real estate that was in between… they spent $1.2 million acquiring abutting property… to support an expansion into the West Bowl… they have lost $9.4 million in value… They’ve lost over $3 million on the land that they acquired in Goshen… which now lies fallow… Bottom line: My client has lost a lot of money.

Listen to Attorney Higgin’s opening statement and all audio from the trial here (large WMA audio file).

On May 9th, 2014, Higgins submitted his final brief in the case, and again highlighted the lost value, including money lost because Okemo’s real estate plans were unfeasible without being connected to the existing leasehold and ski area.

See the May 9th legal brief and relevant quotes.

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Okemo Promises, Okemo Realities

Beginning in May of 1998, Okemo’s principal owner and spokesman Tim Mueller made a number of promises about Okemo’s intentions for private real estate development at Mount Sunapee, promises that were broken within three years of the lease taking effect. (Note: bold emphasis added by FOMS)

Tim Mueller quoted the Valley News, May 2, 1998:

“The Muellers said they had no condominium development plans. ‘We have no intentions of buying anything,’ Tim Mueller said when one person asked about the couple’s designs on private land abutting the state park. ‘It’s important for us that Mount Sunapee and the region maintain its own identity.’”

Tim Mueller, as described in the Intertown Record, May 5th, 1998:

“We in no way want to say that what works at Okemo is going to work at Sunapee,” said Diane Mueller… The Muellers were questioned about the amount of development they had been involved in around Okemo, and if they intended to be involved in commercial development around Mt. Sunapee. Tim Mueller pointed out that Mt. Sunapee presently draws mostly “day trip” skiers, families coming to the mountain and returning to their homes the same day. At Okemo, he said, there is a bed-base issue. There skiers need a place to stay because they are well beyond the day trip range. ‘Here we don’t see that development taking place,’ he said, pointing out that the land around Mt. Sunapee is state-owned, unlike the Okemo setting.

Tim Mueller, as described in the Newport News Leader, May 7th, 1998:

“Mueller said the comfortable capacity at Mount Sunapee is about 4,000 skiers and he would work to increase it to 6,000 while trying to keep everything in balance. He said he had no plans to purchase land surrounding the park for private development. Beds to house skiers overnight would be provided by the private sector, he said.”

Tim Mueller, as described in the Union Leader, May 7th, 1998:

“The owners of Okemo Mountain Resort in Ludlow, Vt., came to the State House yesterday to discuss their values and their vision for operating Mount Sunapee ski area.

Tim and Diane Mueller told legislators Mount Sunapee could become a premier ski destination in Southern New Hampshire with its own distinct character, separate from the Okemo experience. But Okemo’s resources would be tapped to help raise Mount Sunapee up.

‘Although it is not and will not be a destination resort,’ with condos lining the mountainside, ‘it has good potential for a day market with some people staying a weekend,’ said Tim Mueller.

…The Muellers were asked if they planned to build condos around the mountain. They answered that they have not been looking at real estate in the area and noted that the 900-acre lease would preclude them from building on the mountain. The lease does not include the beach or even parcels of land owned by the state which are adjacent to the developed ski area.

Though there is significant slopeside development at Okemo, they noted that theirs is a market whose visitors come from three to five hour drives and they need a place to stay.

Tim Mueller said he anticipated there may be an increase in the bed base in the Sunapee area from the lease.”

Tim Mueller, as described in the Concord Monitor, May 12th, 1998

“Okemo would be restricted to the current footprint of the ski area. Although the company submitted a map in its proposal that marked future expansion, owners did so because they weren’t sure of the exact boundaries of the lease, Mueller said.”

Tim Mueller quoted in the May 13, 1998 Argus Champion editorial:

“[Muellers want] in their own words, ‘to operate a successful regional ski resort and to enhance year round activities, not to develop off-mountain real estate.”

Tim Mueller in the Valley News, August 26, 2001, in response to a question asking if he had broken a promise:

“I was referring to the present tense and not necessarily indicating the possibility of never doing anything in the future… We always envisioned… looking for development opportunities should they come along. Things change in life, and I guess that’s what happens.”

Tim Mueller in the October, 2004 Vermont Business Magazine:

“What’s going to drive the ski area’s viability in the long term is the product,” Tim said. “You’ve got to have good lifts, trails, snowmaking and lodges. A necessary way to get there is through real estate development. You need a bed base, and nobody’s going to come in and finance a hotel in ski country in New England. You can’t finance a hotel and pay for its debt on basically six months of OK levels of occupancy. There’s not a per se hotel in a ski area in Vermont. They’re all condominiums. But you do make money in real estate, generally, if you’re successful. We have.”

“…According to the Herald, opponents say that the Muellers promised not to develop any real estate when they won the competitive lease.

The Muellers say it was in their plans from the beginning.

“That’s exactly what the RFP asked for,” Diane said.

“That’s exactly what the state authorized us to do,” Tim said. “And that’s what most other ski areas in the country are doing.”

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And What is Okemo Developing Elsewhere?

At Okemo Mountain Resort in Ludlow, VT:

Muellers acquire Okemo in 1983; more than $300m in on-mountain real estate developed by them or contracted partners.

From Rutland Herald 9/16/2003:

The resort’s $100 million Jackson Gore expansion, symbolized in its first phase by the five-story, 117-unit condominium hotel…

From Rutland Herald 5/12/2004:

The approval will allow Okemo Mountain Resort to construct a resort center with condominiums at a density of 20,000 square feet per unit. The district will include about 51 acres of undeveloped land, 325 condominiums and eight nonresidential buildings.

From Valley Business Journal 12/5/2013:

A project that has been ten years in the making recently received an Act 250 permit for a ski-in/out residential development on the south side of Okemo Mountain in Ludlow. The permitted project includes 208 residential units, two ski lifts and trails, and a base lodge.

At Crested Butte, CO:

Okemo acquired Crested Butte in 2003. While its megaplan for over 1,000 homes on Snodgrass Mountain was rejected by the US Forest Service in June 2010, other development plans are proceeding.

CBMR Lists Property for Sale- Crested Butte News 1/22/2014 (see article):

The website touting the property extols the virtue of the ski area and explains that the zoning allows “for over 1,800 residential units and approximately 200,000 square feet of commercial development, making it the logical choice for Crested Butte’s future central ski village.”

Ethan Mueller in the Crested Butte News 2/2014:

“At the end of the day we are resort operators,” Mueller stated. “Real estate is a component to help the resort as whole but real estate isn’t our first passion. It is for some people so we would like to attract that type of partner to help the whole thing grow.”

“It is a smarter, safer way for us to move into new projects. That could come with something at the top of Goldlink or the North Village or other opportunities.

“We are in that sort of process at our resort in Okemo,” Mueller explained. “We are partnering with a group for a $200 million resort-real estate expansion. It is good for us and good for them. That’s in our comfort zone. We like to bring in new energy with bigger developments.”