Hometown Hills: Struggling Community Ski Areas Explore New Financial Models

CODY, Wyo. — Running a small ski area in Wyoming has never been a quick path to easy riches, and a flurry of closures and sales among struggling ski hills across the state in recent years has prompted some operators to look for new business models to make their community slopes financially sustainable.

Just as Sleeping Giant, near Cody, reopened as a nonprofit operation in 2009 after a four-year closure, backers of some other small ski hills in the state are exploring similar options. Proponents point to the community-owned Bridger Bowl ski area, near Bozeman, Mont., as a prototype for operating a successful nonprofit ski hill.

But going nonprofit doesn’t guarantee a ski hill’s viability, insiders warn, and nearly every ski area relies heavily on a core group of volunteers and active skiers for any shot at success.

With a sparse customer base, high operating costs, isolated locations, aging infrastructure and changing winter recreation habits, community ski hills across Wyoming face a daunting array of challenges in competing against major destination resorts like Aspen and Sun Valley.

While most major ski resorts have earned revenue from real estate sales, lodging and high-end services, those options have not been available to smaller ski hills.

Antelope Butte, between Shell and Dayton, has been closed since 2004, and efforts by a Powell group to reopen the facility as a nonprofit have so far been unsuccessful. Big Horn Ski Resort near Ten Sleep reopened with new owners as Meadowlark Ski Lodge in January, after being closed in 2008. Snowy Range ski area was kept running last year by First National Bank of Wyoming in Laramie, until new owners took over for the 2010-11 season.

Those “hometown hills” and others like them in Wyoming had found success for decades by following similar business models. They operate in national forests and have only two or three chair lifts and about 15-20 runs. They typically charge $40 or less for lift tickets and cater to local families or skiers within a two-hour drive. But factors ranging from a decade of drought to changing vacation travel trends have recently left many smaller community ski areas on a slippery slope.

“The ski business is a very tough business to make it in on its own, as just a ski area,” said Jim Sullivan, general manager for White Pine ski area near Pinedale.

Sullivan ought to know. He was ski area manager of Snow King in Jackson for 26 years, but was laid off Oct. 29 as part of budget cuts at the resort. He started work Nov. 1 at White Pine, where a new ownership group, Citizens to Save White Pine, had just taken over that struggling ski hill.

White Pine opened Dec. 9 with good snow and a strong turnout. But it could easily have been another small Wyoming ski hill to shut its doors, if a handful of local business owners hadn’t stepped in a few months ago to purchase the venture.

“It was just something that didn’t sound like it was ever going to open again,” said Rex Poulson, one of White Pine’s new owners, and longtime owner of Great Outdoor Shop, a Pinedale sporting goods store.

White Pine had closed in the mid-1980s and didn’t reopen until the end of 1999. When a group of locals heard it was struggling financially and likely to close again this year, they quickly formed a corporation to purchase the assets and make sure it would open for the season.

“It was key to us to keep that open. It brings people from all over. We get a huge number of people from Riverton, Lander, Rock Springs and Green River,” Poulson said.

Poulson and his fellow investors considered reopening White Pine as a community-owned nonprofit like Sleeping Giant. But they found it quicker and easier to start up as a private company.

The new owners see themselves as interim caretakers of White Pine, and want to find a well-capitalized buyer interested in making a long-term investment in the property. And even though they are operating as a business, the group is relying heavily on volunteer support, and may eventually form a separate nonprofit foundation to benefit White Pine, Poulson said.

FEW SKIERS

“Our biggest problem is we don’t have the people,” said Lucas Todd, winter sports specialist at Sports Lure, his family-owned sporting goods store in Buffalo.

Todd has long supported small-town ski areas, and has been encouraged by some to buy Antelope Butte since its closure. But he said the state’s sparse population makes it difficult for small ski hills to succeed, especially when competing against larger ski areas near interstates, airports and bigger cities.

“Sleeping Giant’s biggest challenge is it may be 45 minutes from Cody, but it’s only an hour from Cody to Red Lodge, and how do you compete with that?” he said.

Keeping small ski hills in business is vital to nearby communities, not only for the jobs they provide, but also as an affordable outdoor winter recreation opportunity, Todd said.

But with old, idle and decaying lifts and other equipment at spots like Antelope Butte, it can take millions of dollars to reopen a hill, something most investors aren’t willing to do when they are unlikely to ever see a return, he said.

Over the past decade, some small ski hills in Wyoming have racked up annual losses of $200,000 or more, while barely breaking even in their best years, he said.

“For any of these places to make it, they need to find somebody with a big heart and deep pockets,” Todd said.

That’s exactly how Sleeping Giant was reopened, and the effort has been difficult and costly. A group led by oil and gas executive Jim Nielson of Cody spent more than $3.5 million to buy the ski hill and make extensive improvements, upgrades and expansions.

The ski area is now operated as a nonprofit charity, and has received more than $1 million in donations from local residents and businesses, as well as a $500,000 grant from the Wyoming Business Council and $88,000 in federal national forest funding awarded through Park County.

But despite strong financial and community backing, Sleeping Giant lost more than $300,000 last season, thanks largely to an abysmal total snow accumulation of 41 inches. Annual snowfall there has historically averaged more than 300 inches.

Startup costs and other one-time expenses also contributed to the heavy loss, making it tough to immediately judge whether the nonprofit model will work over the long term at Sleeping Giant, said Jay Nielson, a member of the ski area’s board, and son of Jim Nielson.

“We’re certainly off on the right foot this year, and we’ve got more snow now than we had all of last year,” Jay Nielson said.

Local financial and volunteer support has remained strong, and Sleeping Giant’s snowboard terrain park was just named the best in the nation by Ski Area Management magazine, he said.

Backers say the nonprofit model allows Sleeping Giant to keep lift tickets low — only $29 — and offer free or discount passes to Bighorn Basin school kids as part of its mission to provide low-cost winter recreation to local residents.

They cite Bridger Bowl, which also offers special rates for kids and lower lift ticket prices than many competitors, as an example of how nonprofit ski areas can thrive over the long haul while also serving their communities.

“The advantage of being a nonprofit is that you don’t have an owner or stockholders demanding to siphon off a certain amount of money as profit, especially if that money needs to go back into the ski area,” said Doug Wales, marketing director for Bridger Bowl.

HUMBLE BEGINNINGS

Bridger Bowl started 55 years ago as a membership-based nonprofit ski area with one employee and a rope-tow, but never made the transition to a commercial operation, like many other ski areas did. It now has more than 70 runs spread across 2,000 acres.

Wales said volunteer directors are elected by dues-paying members to oversee management of the ski area, and they have remained focused on running a frugal venture dedicated to offering great skiing at a low price.

While major ski resorts have been racing to install costly, high-speed detachable chair lifts and build high-end spas, shops and eateries, Bridger Bowl has for years set aside money to be used only for essential improvements, he said.

Despite its nonprofit status, Bridger Bowl still has to function like any for-profit business, building cash reserves to fund operations in difficult years and to pay for major capital improvements.

That has allowed the ski area to pay cash or borrow relatively small amounts over short terms to fund major lodge and lift expansions. Bridger Bowl is debt-free.

Because many large ski resorts have relied for decades on lodging, real estate sales and high-end services to make money, they have floundered to break even since the housing bust and recession.

“I love the idea that people are trying to look at the nonprofit model. I think it’s a great one for many reasons. It’s an opportunity to keep the essence of the sport alive,” Wales said.

For Poulson, the White Pine investor, the essence of the sport is families skiing together close to home — something he didn’t want to see disappear from Pinedale.

And though pitching in to run his hometown hill means Poulson, 58, is working harder at a time when he had hoped to be doing less and traveling more, he sees the goal of saving White Pine as worth the sacrifice.

“This is really meaningful, what I’m doing. This is a give-back for me, and I think that’s true for every one of us involved. It means a lot to the kids and the community to have a ski area here,” he said.

Contact Ruffin Prevost at 307-213-9321 or ruffin@wyofile.com.