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Bracing for Mammoth Change

Sale of ski area causes excitement and anxiety in the mountain town. Investment group plans to build luxury hotels and glitzy restaurants.

October 06, 2005|Louis Sahagun | Times Staff Writer

MAMMOTH LAKES, Calif. — The day townspeople learned that the Mammoth Mountain Ski Area had been sold to investors, resort officials assured workers that they still had their jobs, civic leaders warned of difficult choices ahead and real estate agents were overwhelmed with calls from prospective home buyers.

From one end of this 4-square-mile eastern Sierra town to the other, residents reacted with excitement and anxiety to the news: Dave McCoy -- the ski resort's beloved 90-year-old founder, a pioneer of California's ski industry -- was selling the enterprise to a private investment firm with plans to build luxury hotels and glitzy restaurants.

Facing more than 600 employees who gathered in a ski area auditorium early Wednesday morning, ski area chief executive Rusty Gregory said, "I know your hearts are full of trepidation.... But we have the right direction, and we are poised for greatness."

He pointed out that although the new owners have ambitious development plans and expect strong profits for their $365-million investment, the local leadership of the ski area would remain intact, along with its decades-long partnership with the adjacent community it spawned.

Ski area lift mechanic Robert Williams, who serves on the Mammoth Lakes volunteer fire department, left the meeting feeling "a whole lot more comfortable" about job security. Still, he remains concerned about the future of the town, where half the population of 7,700 people are employed on the mountain.

"With everything building up instead of out" in a town already coping with traffic, inadequate parking and little affordable housing, "things are going to get interesting," he said.

Mayor Rick Wood put it another way during a Lions Club luncheon Wednesday attended by two dozen business owners and civic leaders.

"We're getting ready for some serious changes that will affect the character of our community -- some for better, some for worse," he said. Those changes, he added, "are coming fast."

Though the timing and terms of the sale weren't publicly known until Wednesday, most folks in town figured something would happen soon. McCoy, who founded the resort in 1937, had announced in February that he planned to sell the ski area. Industry analysts immediately began predicting a sale worth at least $200 million -- well below the final price.

"We're a little community that has caught the attention of the investment banking world," Wood said. "It's a trying time for elected leaders who will have to make sure their decisions don't ruin it."

Wood said the community was trying to attach community benefits to new development. A week ago, the town, which has an annual operating budget of about $12 million, tripled its development impact fees.

Separately, Mammoth Lakes Town Council members are considering proposals to allow higher densities and some building permits in exchange for civic amenities, such as an ice rink, road improvements, parking facilities, shuttle services and affordable housing. The average home price is $1 million.

Mammoth Lakes' population soars to 35,000 on busy winter weekends. Most of the visitors make the five-hour drive from Southern California. The town's officials predict that it could accommodate twice that number.

Mammoth Lakes restaurant manager Terry Whitman is not waiting to find out. He plans to find another job 50 miles south, in the Owens Valley community of Bishop.

Standing just a few hundred feet away from a construction site where crews were erecting a $140-million condominium hotel, he sighed and said, "Fancy hotels, traffic lights, gentrified neighborhoods, people of means dictating local politics, cranes dangling overhead, steel and glass -- that's not my idea of a quaint mountain village, but it's inevitable.

"So I've devised an exit strategy," he said. "I'll be gone before it all becomes Orange County."

John Walter, a spokesman for Advocates of Mammoth, a group dedicated to ensuring that development meets local laws, is slightly more optimistic. But he expressed mixed feelings about the prospects for a town with only five traffic lights.

"At some point, it won't be attractive for people to come here," he said. "They won't want to come all this way to shop boutique stores and sit in traffic jams."

The ski area, which is perched at 7,900 feet, is being sold to Starwood Capital Group, a private investment firm led by hotelier Barry S. Sternlicht. Until May he served as chairman of Starwood Hotels & Resorts Worldwide Inc., one of the largest hotel chains in the world. Sternlicht earned a reputation for lavishing his hotel acquisitions with Ralph Lauren-inspired decor.

The deal for the ski area 300 miles north of Los Angeles is the largest ski resort sale in U.S. history, industry analysts said. Starwood group also plans to develop about 60 acres around Mammoth Lakes with Canadian resort operator Intrawest Corp. and is expected to buy additional lots throughout the region.

Marc Perrin, managing director of the Starwood group, said local residents should expect to see significant changes in three to five years.

That kind of talk got phones all over town jangling.

"Our phones started ringing at 7 a.m.," said Realtor Stacy Bardfield, a close friend of McCoy. "They're mostly people calling to say, 'I'm ready to buy, find me the best deal.' "

"Until recently, we were regarded as the Sears & Roebuck of ski resorts," she said. "This is a big lurch forward.... Hang on tight. Mammoth Lakes' roller coaster ride has just begun."

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