In pandemic, Vermont ski resort found catalyst for economic growth

The scenic ski town of Killington, Vermont was hit hard as the Covid-19 pandemic spread across the United States in early 2020. Vermont urged visitors to self-quarantine; bar closures have undermined the excitement of après ski fun.

Killington’s fortunes have since improved considerably. Working from home took off nationwide, increasing year-round residents and spending in the resort town; outdoor recreation has at the same time gained in appeal; and property prices soared on limited supply. Highlighting Killington’s bustling atmosphere of late, skiers were still on the slopes alongside mountain bikers at Killington Ski Area on Saturday June 4, the longest ski season at Killington Ski Area in a quarter century.

The result: The same pandemic that cast a cloud over the region two years ago is among the catalysts for long-stalled infrastructure plans and new property investment in the villages. A program called “Killington Forward” combines five goals: a rebuilt road to ease traffic, a water supply system to increase supply and improve quality, affordable housing to help counter a severe shortage of workers and space for them, and the biggest piece of it all — a proposed new village called “Six Peaks Killington” that would accommodate 1,500 residences, creating a new centerpiece of the community conveniently located along the road that winds along the main resort ski lifts.

The city hopes this month to gain final approval from the Vermont Economic Progress Council for a $62 million financing plan, known as tax increment financing or TIF, to pay for infrastructure otherwise beyond the means of Killington’s 1,400 full-time residents. To succeed with Killington Forward, the city also needs investment in Six Peaks; Toronto real estate developer Great Gulf Group is set to agree, subject to TIF funding. If Killington Forward comes together, however, it would boost the value of real estate in the area by more than $285 million over the next two decades, according to a city estimate, creating a new economic era from the depths of Covid. .

“In this area, Covid has had a positive impact – as much as you really don’t want to say those words together in a sentence,” Killington City Manager Chet Hagenbarth said. Forbes. “It’s a once in a lifetime (moment) where all the stars align and it could come to fruition.” Hopefully the shovels will break up the ground on Vermont’s central mountain early next year, he said.

The good vibe in Killington this year is part of a bigger rebound in the ski industry after the onset of the pandemic. U.S. ski areas saw a 3.5% increase in skier visits during the 2021-22 season, totaling a record 61 million, according to the National Ski Areas Association. “Skiing and snowboarding have rebounded in the wake of the Covid-19 pandemic, bringing economic relief and thousands of jobs to communities in 37 ski states,” the association said. “Strong season ticket sales and a continued desire for outdoor recreation are two of the main factors contributing to the record season results.”

Killington is one of 24 ski areas in Vermont, ranked the 8th state in the country. Tourism means a lot to Vermont. It’s a $3 billion company that accounts for 10% of all jobs. Last year, the United States had 462 operating ski areas, down from 845 in 1980, due to climate change and consolidation. New York led the way with 49, followed by Michigan with 39.

Vermont still has independently run ski areas, but the larger resorts are owned by larger companies that have made acquisitions in recent years. Vail Resorts listed in New York
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, the Broomfield, Colorado, operator of 13 ski areas in the United States, Australia and Canada, bought Stowe and Okemo; Private Denver-based Alterra Mountain, owner of 15 ski resorts in six states and three Canadian provinces, has purchased Stratton and Sugarbush Resort. Vermont’s investment environment has been marred by one of the state’s worst scandals involving two ski areas: Jay Peak is now in receivership in connection with the misuse of immigration funds that defrauded nationals foreigners and elsewhere of millions of dollars. Three businessmen have been sentenced to prison this year, while a co-accused remains at large.

For its part, the town of Killington has long occupied an outsized place in the state’s history. The state of Vermont was baptized by the Reverend Samuel Peters atop a peak in 1763. At first the mountain was known as Mount Pisgah, at a time when many mountains in Vermont were given biblical names, according to a book published in 1990, “Killington: A Tale of Mountains and Men.

Killington opened in 1958, under the leadership of Preston Smith, who embodied a ski industry where entrepreneurs often had more passion than money. With financially savvy partners, he created a Nasdaq-listed company known as SKI before selling it in the mid-1990s to American Ski Company.

Privately held Powdr, headquartered in Park City, Utah, purchased Killington and the nearby Pico area in 2007 and currently has 12 resorts across North America. When he took over the Killington ski operations, Powdr mostly left the other real estate he owned to SP Land, a Texas-based investment firm, which now owns the property where the Six Peaks development is planned. . Under the arrangement between the two, Killington owns 20% of SP and SP owns 20% of Killington.

Powdr has done well in Killington by not over-promising and adding stable business, unlike the struggles American Ski has faced, said Mike Solimano, president of Killington/Pico Golf & Ski Resort. Forbes. Powdr is currently constructing a new $34 million base lodge.

Powdr has also invested in bike lanes to generate year-round business. “When I came here it was a ghost town” in the summer, Solimano said.

Killington’s appeal these days is clear in the real estate market. Six homes sold in Killington in the first three months of 2022 at an average price of just over $1 million, a 30% year-over-year increase, according to brokerage Prestige Killington. Seventeen condos sold at an average price of $413,000, more than 67% above last year’s average and the highest average price ever.

Six Peaks, the centerpiece of Killington’s planned revitalization, will span the base of two mountains, Snowshed and Ramshead, connecting the two with a ski bridge, and transform the main road to Killington’s base lodge. Powdr, the owner of resort operations, largely doesn’t do property development, and neither does SP Land, which is looking for a developer for the Six Peaks project.

Great Gulf Group, the development company founded by Toronto businessmen Elly and Norman Reisman, appeared May 26 at a meeting with state officials to say it had reached an agreement to acquire SP Land’s in Killington. A green light for the inauguration requires funding from the public sector.

“It’s not even reasonable” for a city the size of Killington to spend $62 million on infrastructure upfront, said Killington City Manager Hagenbarth. “There has to be a public-private partnership.” Great Gulf declined to comment further on the project’s prospects.

Another possible barrier is the lack of affordable housing. This is not part of the additional $62 million tax funding package. Supply is already so scarce that Killington Ski Resort has purchased local hotels to house temporary workers during the winter season. Killington’s staffing is “a constant and really depressing struggle,” said Polly Mikula, editor and co-publisher of Mountain Times, a local print weekly. Vermont’s unemployment rate in April was 2.5%.

Vermont’s housing shortage is a trap, said Stephanie T. Clarke, vice president of White + Burke Real Estate Advisors, consulting at Killington. “We can’t afford to build housing because the workers aren’t there because they have nowhere to live,” she said.

If the Vermont Economic Progress Council approves the TIF plan this month, a final vote to initiate the first loan will go to voters in November. Killington city officials have already backed the plan, and construction is expected to begin next spring.

See related article:

Vail Resorts profits soar 36% amid pandemic mitigation

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