A complicated purchase agreement has been revealed between owner Nick Piazza and the non-profit Yellowstone Recreation Foundation regarding last year’s sale of Sleeping Giant Ski Area. Details of the sale came into the public fold during a county commissioner meeting last Tuesday during an equipment transfer between the county, YRF and Piazza.
Although Piazza bought the ski area for less than $100, his continuing investments have been major. It was a purchase predicated on the future potential rather than current value of the ski area.
“The infrastructure installed that’s part of the mountain has no re-saleable value,” James Klessens, Forward Cody CEO said. “It will cost more to remove it than it’s worth.”
Additionally, the mountain never turned a profit since reopening in 2009, incurring a roughly $200,000 annual deficit. Although Piazza didn’t have any visions of the mountain becoming a cash-cow, he did offer a pledge to “give it his best shot to keep it running,” he said.
And because of such, the Yellowstone Recreation Foundation offered Piazza a symbolic purchase price of less than $100, president Rob Overfield said, with the understanding Piazza would take over running the mountain and all related expenses into the future. Although Piazza keeps whatever money the mountain makes, YRF is still technically considered a fall-back owner.
“Whether it’s a private or a nonprofit makes no difference to any of us in the community,” Klessens said. “It’s a viable entity.”
YRF maintains the right of first refusal if Piazza decides to sell the ski area; he must offer it to YRF first before finalizing a deal with a prospective buyer.
“When Nick came along this seemed (to make) the most sense and the most viable to actually have the mountain run as a whole with good financial backing,” Overfield said.
Under the mountain’s lease agreement with the Forest Service, the agency can order all equipment be taken off the mountain and brought back to a “natural state” if commercial operations go dormant for a more than an eight-month period. If Piazza ceases or plans to cease running the mountain without selling it, the parties have agreed YRF can take back possession of the hill.
Overfield said although there was no formal public notice made about the ski area being available for purchase in this manner, he said that in his opinion it was common knowledge YRF was looking for someone to take the mountain over.
“I don’t know whether that was public knowledge or not, but the whole community knew we were struggling to find another operating option,” he said.
Continuing into the future
Overfield said at the time of purchase, there was an expectation Piazza would invest in the mountain, a stipulation Piazza looked at as a simple cost of doing business.
“As we got more familiar with the asset, we understood that not doing these kinds of investments was not going to make it sustainable,” Piazza said. “Everything we do is with the idea of making this a long-term sustainable asset.
“The investment in infrastructure is almost a donation from us.”
Since taking over Sleeping Giant, Piazza has invested in a new yurt, new rental equipment such as skis and snow bikes, and outdoorlights. This fall, he purchased two new snowmaking machines for $150,000 total, added 30 more lights for night skiing, and invested $70,000 in critical maintenance for the Bighorn lift.
“There’s a lot of work that’s been done on the lifts that hasn’t been done in decades,” Piazza said.
The mountain was originally a private enterprise but pivoted to a non-profit whenJim Nielson arranged the sale of Sleeping Giant from Keith Dahlem and his family to YRF.
Ownership of the mountain’s pre-existing snowmaking equipment and lifts actually belonged to Park County and Forward Cody until last Tuesday’s county commissioner meeting. At that meeting, the commissioners unanimously approved transfer of the magic carpet, Sheepeater lift and snowmaking equipment to YRF, which will in turn hand the equipment over to Piazza.
Park County was the pass-through agent for state grant funds after Forward Cody helped raise $1.1 million in local contributions to match a $500,000 Business Ready Community Grant from the Wyoming Business Council in 2010 that went towards infrastructure for the mountain. The money went through the county as a pass-through, but Forward Cody was considered the owner of the property and paid taxes on it each year, Klessens said.
“Because of the grant money, Forward Cody took an equity-stake to protect the interest of the state,” Klessens said.
At the commissioners’ meeting this equipment was conveyed in whole to Forward Cody, which will convey the property over to YRF and then to Piazza.
“The whole community came forward to make this deal happen,” Piazza said.
Klessens said the eventual transfer of this equipment over to Piazza was part of the agreed terms when he bought the mountain.
“They had the best year they’ve ever had last year. We expect that will continue,” Klessens said.