Group wants to buy Mt. Rose with crowdfunds
NNBW News Service
In early 2016, Mt. Rose Ski Tahoe sent an email to its season pass holders announcing that Fritz Buser, majority owner since 1971, was looking to sell the ski resort.
Since, there has been a lot of speculation on prospective buyers and what the future holds for the resort located between Incline Village and Reno.
In early August 2016, Reno resident Govind Davis launched One Reno — a group of investors to initiate the purchase of Mt. Rose through crowdfunding.
Since One Reno’s Facebook page launch, the group quickly gained support, reaching over 1,000 likes in a period of a month.
Passionate Mt. Rose skiers and snowboarders were clamoring to get on board, especially with One Reno posts stating, “Outside interests are also interested in buying the mountain, and we cannot let that happen. If you want to be involved at the ground floor, contact us right away,” and responding to comments that anyone can get in on the investment for any amount of money to keep it from becoming a “McSkiSlope.”
However, it seems One Reno has put the cart before the horse, generating a huge pre-marketing effort before the group even developed a website.
One Reno also stated on its Facebook page it was going to release a full prospectus and launch its crowdfunding campaign in the beginning of September, but nothing has been published.
This has all led residents to ponder: Is this a scam?
“There’s enough big money in the Reno/Tahoe area to make this community-owned,” One Reno Marketing/Social Media Manager Ben Gaul said in an interview this week. “We want everyone to have access to the mountain and keep it from becoming corporate.”
Gaul says he signed a non-disclosure agreement with Mt. Rose, stating he could not convey what he knows about the sale price, only that the resort is “asking for a lot of blue sky.”
“Mt. Rose has been very close to the chest on what they are selling for, but usually, ski resorts sell for six times the operating income,” he said.
He added that through their upcoming crowdfunding campaign, One Reno will try to raise $15 million to $30 million in capital to try to prompt other large financial institutions to get involved.
“We are trying to be as open door and clear as possible,” Gaul said.
Gaul said that One Reno’s attorneys are in communication with Mt. Rose’s attorneys and will revisit the conversation when they raise $1 million to $5 million capital.
In One Reno’s initial conversations with Mt. Rose lawyers, the collective has never mentioned a crowdfunding campaign, said Stephen Mollath, who has served as Mt. Rose’s attorney for over 30 years.
“We have not seen any detail on it,” he said in a September interview. “We don’t know their business structure or their level of funding, so we really can’t comment on it.”
He also noted that Mt. Rose has not received a written offer or a letter of intent from any interested parties.
When someone expresses interest in purchasing the ski resort, he said, that entity would sign a non-disclosure agreement, determine its financial capabilities for managing it, and then gain access to Mt. Rose’s data room.
Mollath said the two key points Mt. Rose is looking for in a buyer is that the person/group is sufficiently financed, and that potential buyers have adequate knowledge in operating a ski resort.
With regard to One Reno, Mollath questions how the ski resort can be efficiently operated when that many people get together in this kind of investment.
“Who manages it?” he asked.
Gaul said that current Mt. Rose operators already do a great job in managing the resort, and One Reno would just provide the financial backing for it.
From a legal prospective, Mollath says crowdfunding for a ski resort is problematic. Mainly, how is One Reno is going to release Mt. Rose’s financial information to potential donors without completely violating the non-disclosure agreement?
Before crowdfunding existed, family and friends could assure one’s credibility before contributing monies, whereas today anyone can set up a GoFundMe or Kickstarter account without having to undergo a background check.
Google “crowdfunding scams” and you’ll find plenty of instances when projects have been canceled and the “creators” have skated off with the money.
Even when crowdfund “creators” have the best intentions, there have been instances when the idea just didn’t come to fruition and the investors never got their money back.
Regarding the purchase of Mt. Rose, one skeptic posted on the One Reno Facebook page: “I have great concern for those who may be persuaded to think that they actually have the potential to be a partial owner with a meaningful voice — when the plan may be really spearheaded by a silent partner who remains unknown to local interests.”
One Reno replied by stating, “If we were asking you for blind money right now … Sure, I’d be skeptical too. So far, we haven’t asked a single person for a dime. Before we ever DO ask anyone to invest any money, rest assured those people will be completely up to speed on the particulars.”
Mollath says, “We’re talking to some real people interested in buying the ski resort, none of which are backed by crowdfunding.”
Kayla Anderson is an Incline Village-based freelance writer with a background in marketing and journalism
Reno-based design firm MBA Architecture and Design is assisting on the $47 million Caesars Entertainment project in downtown Reno.