Saturday, December 11, 2010

The Dirt on KSL - the new owners of squaw valley usa

Squaw Valley's credo has always been: "Hey, we got the best mountain, so you'll take what we give ya." I still remember, word for word, a statement from a season pass renewal letter mailed to every season pass holder, by Squaw, in 2003. The statement read: "Dear Alex, many consider you to be a slick scoundrel. I am one of them, but what can I do, you have the best mountain. Please take my $___ and send me my 2003/4 Squaw Valley season pass."

That credo is about to drastically change. Squaw Valley USA sold today to KSL Capital Partners based out of Colorado. Squaw's recent purchase of the Village and their getting rid of Nancy as CEO for Andy Wirth were obvious moves to make Squaw more marketable. We all knew it was gonna sell - we just didn't know to who.

KSL plans on changing Squaw's mantra and will start by throwing $5 million into improvements this season and $50 million in the next 3-5 years. They plan for that money to improve "culinary services, food and beverage, guest experiences - everything from the lift operations and ticket checkers to the staff in the parking lot." -Andy Wirth (Squaw's CEO)

Andy Wirth, Squaw's CEO, Eric Resnick, KSL's co-manager, and Mike Livak, Squaw's general manager, conference called's founder Tim Konrad today for a chat. They talked for around 15 minutes in very general terms about what KSL's acquisition of Squaw means. Andy emphasized that they'll be spending part of that $50 million on improving Squaw's culinary arts, lift systems, and guest experiences. Eric said he and KSL are "really excited to be in Squaw Valley. It's one of the most unique mountains in the world." The call was basically a 'hi, how ya doin' call and somewhat of a respectful move. I think they know we've got some power with the people over here at this little website and they want us to know they recognize it.

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Tram Face

The people are already speaking out on KSL's acquisition of Squaw. Check out these quotes from our facebook page on the issue: "Bummer! we don't want to be vail" -- "Squaw has been one of the greener resorts so far and attempted to restrict development to its existing footprint. I fear that may change" -- "Where is the "dislike" button?" -- "it could be a net positive for skiers unless you really love the funky aspects... those will probably get polished off..." -- "Private Equity can't seem to get enough of capital-destroying ski lift operations!" -- "Balls..." Will KSL listen to the people and try to keep Squaw funky? Maybe.

So, who are these guys? KSL is run by Michael Shannon (who was president of Vail Associates, a predecessor of Vail Resorts, from 1985 to 1992), and Eric Resnick (who was also a Vail executive). KSL brands itself as a "private equity firm specializing in acquisition of under performing and under capitalized businesses and add-on acquisitions." So, okay, we all know that Squaw has not been living up to it's financial, economic, and service potential lately.....but I honestly think that's what so many of us love about this place. Squaw is grungy. Alex Cushing himself is quoted on numerous occasions saying "We're in the uphill transportation business", and that's all Squaw was. In the past Squaw was know as having the most technologically advanced lift system in the world......with absolutely no amenities. And besides the new Village (which is doing so-so, I mean, have you ever seen more than half the lights in the rooms lit up at night?) Squaw is still raw, grungy, and essentially just a bad-ass mountain with a couple funky places to grab beers and food. Bottomline: Squaw's got soul. The question is: will KSL rip the soul out of Squaw like that Shaman does to the guy's heart saying "Om namah shivaya" in "The Temple of Dome"? Obviously, it's yet to be seen.

KSL's plan is to completely change Squaw, because that's what they do. They buy businesses that aren't living up to their potential, heavily invest in them, and turn them into money-makers. What does this mean for Squaw? Another village, better restaurants, more restaurants, better service, more condos, more real estate, more lifts, ice-skating rinks, more parking structures, and a helluva lot more worldwide exposure are all things that are not out of the question. What does it mean for locals? Longer lift lines, more traffic, higher property values, higher prices in the valley in general, more chain stores, larger local revenue, more jobs, continued cheap season passes, more food and retail options, and potentially a chance to invest.

Squaw's potential is enormous. It's astronomical actually. Squaw is a world class mountain, in California, with more snow than anybody, terrain to fit every skiing genre, spectacular views, a nearby airport, it's only 3 hours from San Francisco, and only 4 from Silicon Valley (where there are roughly 5,774 residing millionaires and 45 billionaires). The sky's the limit.

I think what we all love about Squaw is that it's been 'ours', and in the near future it's going to be 'theirs'. But, Whistler has gone through this and the locals still love the mountain, albeit, they mostly have to live outside of town due to the high property value. The secret to life is to staying adaptable. If Squaw becomes somewhere you don't wanna be, then get the hell out, I suppose. But, I don't think everyone is gonna feel that way.

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