Kirkwood: Sale to finance development

Last week's sale of ski resort operations at Kirkwood Mountain Resort to Vail Resorts allows Kirkwood's former owners to focus on creating a world-class community in the Kirkwood Meadows, says David Likins, chief executive officer of Kirkwood Mountain Development.

Vail Resorts, operator of Heavenly Mountain Resort and Northstar-at-Tahoe, purchased Kirkwood for $18 million. Divesting mountain operations provides Kirkwood Mountain Development with significant capital to advance its ambitious development plans at the base of the resort's two main lodges and raises Kirkwood resort's profile and brand recognition in the ski industry, Likins says.

"Having the capital to pursue our projects is important, but so is having a world-class resort operator that has a style all its own and really will put Kirkwood on the map as a must-go-to destination for skiers around the country," Likins says.

Kirkwood Mountain Development LLC owns 474 development units spanning about 20 acres of developable property at base of all the lifts at Kirkwood. The units are a planned mix of half-acre single-family home sites, patio home sites, condo and town homes and hotel properties.

Currently, Kirkwood offers a total of about 700 development units comprising condos, town homes, timeshares and single-family homes.

Vail Resorts brings a certain cachet to its ski facilities that proved attractive to the ownership group, Likins says. Vail's operations are prominent national and international ski destinations, which can help raise the value and desirability of land at Kirkwood.

"Our pure play is ski resort residential development at this point, and we have a large runway of products," Likins says. "Clearly, part of our motivation is finding a partner that will build our brand as real estate developers. They (Vail Resorts) have a really interesting strategy for pushing forward, and it dovetails nicely with our plans as resort developers."

Kirkwood Mountain Development has two showcase projects in the Kirkwood Meadows. The Palisades single-family home sites consist of 58 lots ranging from a half-acre to three-quarters of an acre. The company plans to focus on advancing development at The Palisades first.

"It's really our trophy property," Likins says. "It's right between two high-speed quad chairlifts. You really can't find ski-in, ski-out right to your back door. It's our signature property."

The second piece is a longer-term development by the East Village consisting of a 12-acre parcel planned for a semi-private, ski-in, ski-out development with a footbridge to the rest of the mountain development. It will consist of a mix of single-family lots, small patio homes and an on-slope hotel, as well as a small mix of condos and town homes.

"It is a pretty fantastic property," Likins says. "Development will be driven by demand, and demand will be driven by the guest experience and the homeowner experience.

"The opportunity to work with Vail, and the amount of land we have to develop, it will be a fantastic multi-year process that will become the most interesting, unique and desirable communities in Lake Tahoe. It makes for a fantastic second home community opportunity."

Blaise Carrig, co-president of Vail Resorts, says the idea to purchase Kirkwood first was floated around during discussions with Vail Resort's executive group, and last November he initiated talks with the owners of Kirkwood Mountain Resort about purchasing the ski resort.

The popular resort 35 miles southwest of Lake Tahoe is known throughout the United States for its bevy of double-black diamond technical terrain and for having exceptionally high snowfall totals even in the driest of winters.

The acquisition of Kirkwood diversifies the Lake Tahoe-area offerings for Vail Resorts season pass holders, Carrig says. Vail already operates two of the largest tourist resorts in the West, and now it owns the "locals favorite" as well.

"I have skied there a lot and always have been really impressed with how special it is," Carrig says. "It gives us something very different than what we have already. We are not just adding something, but adding something really different to our portfolio.

"It has a small-community feel, and there's definitely a passion people have about the skiing at Kirkwood. We didn't think that in Tahoe we would have a third resort we don't need something like Heavenly or Northstar."

Vail Resorts purchased the resort operations, ski school, and the food, beverage, ski rental and retail operations, as well as a small two-acre parcel of land at the core of the mountain village.

Season pass holders at Heavenly or Northstar can ski or ride at Kirkwood, and Kirkwood pass holders have access to Vail's other Tahoe resorts. Vail will package all three resorts into next season's season passes, but it also will keep a Kirkwood-only pass to cater to the resort's strong and passionate following.

"We will maintain the value products Kirkwood had," Carrig says.

The most recent acquisition is another move by large resort operators to purchase and combine popular ski destinations into a single package. KSL Capital Partners of Denver purchased Squaw Valley in late 2010, and a year later it added Alpine Meadows to its portfolio. The combined resort operations from both operators have raised the profile of Lake Tahoe region as a national and international ski destination, Carrig says.

"It is a really positive time for Lake Tahoe as a ski destination and will bring more visibility nationally and internationally to the diversity of the experience at Tahoe."


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