Money comes through for American Skiing Company
American Skiing Company, owner of Heavenly Ski Resort, now has the dollars to continue its expansion plans, including its portion of the Park Avenue Redevelopment Project.
On Monday, ASC announced the closure of a deal, originally announced in June, to sell 48.5 percent interest in ASC to Oak Hill Capital Partners, L.P. for $150 million.
In addition, lenders approved merging ASC East and ASC West into the parent company to simplify its capital structure. Management expects to complete the merger within 60 days.
“Our entire organization is energized about the benefit of this transaction to our resort communities,” said Les Otten, founder chief executive officer of ASC, “as we now have the resources to continue to execute our development plans.”
Among those plans is a large piece of the South Lake Tahoe Park Avenue Redevelopment Project, scheduled to break ground in May 2000.
The agreement with Oak Hill “gives us a great moving forward position,” said Stan Hansen, Heavenly’s vice president of real estate, planning and governmental affairs. “That allows us to follow through on our expansion plans.
“Our next big hurdle is with the city.”
With dollars in the bank, Heavenly is ready to make good on its promise to complete a disposition and development agreement with the city.
The DDA, expected to completed by the end of September, ensures the city won’t be left holding the bag should Heavenly not complete its portion of the redevelopment project. That includes construction of a Grand Summit Resort, which has begun presales of quarter-share units, and a gondola connecting the Stateline area to Heavenly.
Finishing touches on the architectural designs nearly complete, Hansen said, and a purchasing agreement for the gondola is expected in three weeks.
ASC, which owns ski resorts and real estate developments in eight communities, has been weighed down in debt following poor snow conditions in the northeast and a late season in the Midwest. Some financial analysts began to question ASC’s ability to see its extensive real estate and capital improvement plans through to completion.
Oak Hill, founded by Robert M. Bass, is a $1.6 billion private equity partnership. The company is known for making significant investments through acquisitions, build-ups, recapitalizations, restructurings, strategic joint ventures and the purchase of minority stakes across a wide range of industries. Oak Hill Management, Inc., based in New York and Menlo Park, Calif., manages the partnership.
“We believe that American Skiing Company represents an outstanding investment opportunity for Oak Hill, said Steven Gruber, managing partner of Oak Hill Capital Partners.
With completion of the agreement, Oak Hill is the largest single shareholder in ASC. The ski company’s senior management will hold 26.7 percent of the shares.
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