Surrounded by local dignitaries, Fred Johnston, president of Baldy Capital Corporation, cuts the ribbon to re-open Mount Baldy Ski Resort last January. At the time, Johnston hoped to be able to purchase the assets by April, but negotiations with the receiver have hit undisclosed snags. (Richard McGuire photo)
In a repeat of last year, the chance of a ski season this year at Mount Baldy Ski Area again looks uncertain.
“Very precarious,” is how Fred Johnston, president of Baldy Capital Corporation, responded when asked last week about the odds of a 2015-16 season.
Behind the uncertainty are stalled negotiations for the purchase of the resort by Baldy Capital Corporation, which stepped in last season to open the ski and snowboarding facility in January after it had stayed closed the previous season.
Meanwhile, the receiver, G. Powroznik Group Inc., issued a news release Tuesday saying the offer from Baldy Operating Corporation and its affiliate Baldy Capital Corporation “was not acceptable to the primary secured creditor or the receiver.”
The receiver has searched for and spoken to new interested parties with a view to an immediate sale, the news release said.
Under its previous owners, the resort fell into insolvency, but on December 18, 2014, Baldy Capital Corporation reached an agreement with the Vancouver-based receiver, a company under G-Force Group.
Under that agreement, Baldy Capital Corporation ran the resort last year with the intention of purchasing it once the bankruptcy process was completed. At the time, it was anticipated the purchase could go forward in April.
Neither Johnston nor Gary Powroznik of G-Force Group wished to speak publicly about the sticking points holding up an agreement, but Johnston said he was hopeful there would be discussions this week to advance the process.
Meanwhile, Johnston admits there has been no preparation work done at Mount Baldy for this year’s ski season since May.
Work, he said, should have started in July.
The delay has consequences in that it holds up pre-sales of season passes, he said.
The shorter season last year resulted in a loss, but Johnston said this was expected and the loss was lower than anticipated.
“We were pleased with how it turned out,” he said. “It turned out better than expected.”
He all but ruled out the possibility that Baldy Capital Corporation could operate the resort this season on the same basis as last year until a purchase agreement can be completed.
“That’s unlikely for both sides,” said Johnston. “I think at this point we’re down to either completing the acquisition of the mountain or not completing.”
Powroznik said he only became the receiver after the agreement was reached last December with Baldy Capital Corporation. As receiver, he said, he must be transparent to the courts and obtain an agreement acceptable to stakeholders, especially the first secured creditor.
He insists he hasn’t gone back on anything in the December agreement.
“The big issue is we’re the seller,” said Powroznik. “We’re ready to sell to anybody that meets the tests and we tell the people what the tests are. If they can’t meet it, we can’t sell.”
The key elements, he said, are price, financing and timing. Usually these can be worked through if a buyer is able and willing to do it.
“We think it’s a nugget,” said Powroznik. “A real diamond in the rough. It just needs the right party to put it all together. We really would like to get that going as soon as possible. It’s been very difficult to attract someone who’s able to complete the deal.”
He said he had hoped there would be more interest locally from a buyer.
“It’s an under-fulfilled resort,” he said. “It could be a four-seasons resort.”
With the right marketing, Mount Baldy could attract many skiers from mountains further north, he said.
Meanwhile, Johnston said the uncertainty has put Mountain Manager Matt Koenig in a difficult position.
“Regrettably it’s a repeat of that movie that he’s seen before,” said Johnston. “He does not know what his future holds because of this. We hope that he is able to hang in there, but we can fully understand if he’s not.”
Last year Koenig was credited with playing a major role in getting the resort back up and running.
In a statement issued Sept. 9, Baldy Capital Corporation said it “has been working diligently to complete the purchase of Mount Baldy Ski Resort on the terms agreed to with the receiver and secured creditor last December.”
Despite being unable to settle the documentation based on those terms, the company remains “very interested and willing to complete the purchase,” the statement said.
RICHARD McGUIRE
Osoyoos Times
