In the hopes of developing a plan to re-open Teton Pass Ski Area, the Choteau Area Port Authority held a live-streamed question and answer session on June 6 with Bob Ackland, the founder and managing member of Steep Management, LLC., a company which helps ski areas better organize and increase productivity.
Ackland has spent 40 years working in the outdoor recreation industry, with 20 of those years devoted solely to ski areas. He served as the general manager of Mad River Glen Ski Cooperative in Vermont (a ski area that saw an average of 47,000 visits a year) and was with the company when it transitioned to become a co-op.
“To be clear, I wasn’t the one who transferred Mad River Glen, but I intimately got to know the process, and I became general manager later on,” explained Ackland.
He told the crowd of a dozen people attending that Mad River Glen had a unique scenario. Its history dated back to 1947 and it was associated with the U.S. Army’s 10th Mountain Division, which trains to fight in mountainous and arctic conditions. Because of these unique factors, the seller had a lot of interested buyers.
The sale price was $2.5 million. Some interested buyers formed a co-op and raised $1 million to enter a contract-for-deed agreement, and the seller mortgaged the rest. “We were able to pay off that mortgage completely in the first year of operation,” Ackland said.
Ackland said the seller of Mad River Glen was very inventive in three different ways that Teton Pass could potentially copy. The first action was to demand that the co-op add an advanced purchase requirement (APR) of shareholders into its bylaws. If the APR wasn’t met, the stockholder would lose his membership for that year and forfeit his benefits.
“Every shareholder had to put in $200 every year before the season started. They could buy season passes with that, or buy equipment, or use it at the bar, whatever. This allowed the co-op to have working capital at the beginning of the season without being dependent on a bank. In the past 18 years, I don’t think the co-op has ever reached out to a bank,” said Ackland.
The second thing Ackland said the seller did well was to allow the “ski bums” — less wealthy but dedicated, longtime patrons of the ski area — to put their season passes on credit. He said this was much more simple than trying to devise a fair system of discounted rates to patrons.
The third and final thing Ackland said Mad River Glen did well was to limit the shares to four per person. “I thought this was smart because it prevented one person from buying all the power. … There was no preferred stock, though. A share was a share. You know how Vermont is with Bernie Sanders,” he said, jokingly.
Teton Pass has a different situation compared to Mad River in a number of ways, with an average of only about 7,000 visits a year and a sale price of $375,000. The fact that the ski area has been out of operation for the past two seasons is another challenge, as it makes it more difficult to attract stockholders. And even when the ski hill does attract stockholders, Montana has a different system than Vermont.
“I think Montana’s preferred stock option is more advantageous to us,” said community member Kevin Stone.
Janice Brown, the executive director of the Montana Cooperative Development Center, agreed with Stone, reporting that a quarter of the people who took the Teton Pass online community survey said they would buy preferred stock if given the option.
From Ackland’s perspective, there was also one mistake that Mad River Glen made which those interested in reopening Teton Pass could learn from: governance.
“The governance at Mad River Glen was so erratic that I eventually left and went to be the president of Sugar Bush Ski Resort because I couldn’t handle it anymore,” he said. “Board members came and went, and the chairman was on a two-year term. The first year, they didn’t know much and were still learning, so they hardly did anything. The second year, they’d start projects and goals that they didn’t have time to finish. There has to be some continuity with the board that builds a relationship and gets things done. You’re not going to fix everything at once.”
Ackland gave one final piece of advice at the end: “There’s more than one way to skin a cat, and co-ops aren’t the only way.”
There isn’t a co-op set up for Teton Pass yet, but there is the recently formed non-profit, Friends of the Teton. The non-profit isn’t looking to buy the ski area or to advocate for a co-op formation, but it can be a valuable asset in providing the ski area with the equipment and volunteer hours it may need to get up and running. Someone could donate a groomer, for example, to the 501(c)3 organization for a tax benefit, and the Friends of the Teton could in turn lease it to Teton Pass very cheaply.
Ackland said Mad River Glen benefitted greatly from a 501(c)3 foundation, as it was able to get a historical designation for a single chair ski lift, and accept $2 million in donations to rebuild it.
“I think you had great ideas with the APR, governance and working with the seller. I don’t think anyone here has approached the seller of Teton Pass to try to work with him,” CAPA Chairwoman Mary Sexton told Ackland. With that, she suggested that CAPA members approach Nick Wood, the owner of Teton Pass, and see whether he would accept a $100,000 or $50,000 down payment from a co-op for a contract-for-deed agreement.
“Basically, what we’re looking at is seeing what he’d be willing to give up for some certainty in return,” Stone said. Terry Barch with Friends of the Teton said he would talk to Wood.
Those who filled out the community survey can expect to see an email in July inviting them to participate in a steering committee to explore the idea of creating a co-op. The official results from the feasibility study on the ski area will also be published by then.
A video recap of the question and answer session will be available on CAPA’s Facebook page and website at a later date.
The next meeting on forming a co-operative is set for July 16 at 7 p.m. at the Stage Stop Inn and via video conferencing on Zoom. At this meeting, people will be recruited to serve on committees and participants will learn how to organize a cooperative.
Anyone who wishes to view the meeting online should register in advance. After registering, people will receive a confirmation email containing information about joining the meeting. To register, go online to the Choteau Area Port Authority Facebook page.