Payson Sheets - Since these are enterprise revenue and not general obligation bonds, the only “backing” on the loan is the money Eldora makes (lift tickets, ski school, food, etc.).
This item is available in full to subscribers.
At this time, we ask you to confirm your subscription at www.themtnear.com, to continue accessing the only weekly paper in the Peak to Peak region to cover ALL the news you need! Simply click Confirm my subscription now!.
If you are a digital subscriber with an active, online-only subscription then you already have an account here. Just reset your password if you've not yet logged in to your account on this new site.
Otherwise, click here to view your options for subscribing.
Questions? Call us at 303-810-5409 or email info@themountainear.com.
Please log in to continue |
Dear Editor,
Since these are enterprise revenue and not general obligation bonds, the only “backing” on the loan is the money Eldora makes (lift tickets, ski school, food, etc.).
The town’s general fund (paid for by property tax, sales tax and other revenues) is supposedly insulated from this deal, but if the resort defaults on its obligations it could taint the town’s borrowing reputation and drive up borrowing costs.
Ikon Pass Dependency: If deal with Alterra changes and payout to Eldora decreases, this creates risk.
Local Benefit Argument: We need to see the indenture. If the bonds default, the bondholders may have certain rights which could potentially include a private investment company stepping in and seizing the resort.
Climate Risk: If we get several years’ worth of poor snowfall, they will have to dip into the reserve fund to pay bondholders.
Capital Intensive Business Model: 700 employees need to be housed and paid.
Questions:
What is the debt service coverage ratio required by the lenders?
How many months of debt payments are in liquid reserves in the event of poor snowfall? Once the reserves are exhausted, how might a default taint the town’s credit rating by association?
The cost is approximately $120M but with interest payments the total costs could balloon to over $350M over decades. We need to see details of financing.
When will these be released? (Need to see Separate Board Ordinance and Indenture of Trust.)
Are there any other capital reserve funds aside from the $10M for bondholders to ensure they can maintain the resort without dipping into revenue needed for bond interest
How will the resort house the 700 plus employees and where do those revenues come from?
What is the dependency on the Ikon pass? What if the relationship with Alterra changes?
What happens if 303 Ski fails to meet its revenue targets?
What rights do the bondholders have in the event of default? Can a private company seize the resort?
Even though there is outsourcing going on, the town is still heavily involved. How will this divert resources from other town services (roads, schools, police, fire, etc.)?
Payson Sheets
Eldora
