1968 – The dream comes tumbling down
It all changed nine years later when Vail was a roaring success. The directors’ goals had been achieved and outside developers were beginning to become involved. The unwritten agreement no longer seemed necessary.
In 1966, I bought the 160-acre Leo Hargrave Ranch in Lake Creek. It was in the heart of the Burford Ranch, which consisted of approximately 2,300 acres.
Later in the summer of 1968, Bob Burford, who was a friend of mine, offered to sell his ranch to me for $400 per acre. It was a beautiful piece of property located about 25 miles west of Vail. One evening at the Red Lion restaurant, Burford and I shook hands on the deal. That handshake turned out to be as good as gold.
Again, John Murchison, a man of strong financial backing and unquestionable strength, was to be my partner. The agreement was based on our buying a ranch for Burford in Utah, which we would trade to him, thus saving the 25-percent capital-gains tax.
Because I had already acquired 160 acres with the knowledge of the board, I presumed that the prior unwritten rule no longer applied. I therefore felt that it was perfectly appropriate to move forward with the purchase.
On the day of the directors’ meeting, I had just returned from 10 days in New York. Pete Seibert called me early that morning and wanted to meet me in my office at 8:30 a.m. He walked in at 8:55. I could see that he obviously had something on his mind. He was troubled but avoided eye contact with me. He seemed to be anxious to get to the directors’ meeting. There was no chance to talk about whatever was on his mind, so I politely followed him over to the board meeting.
When I got there, they lowered the boom. A master plan of the entire 2,300-acre Burford Ranch was rolled out on the conference table.
With the board of directors’ plans for the Burford Ranch on the table, I was dumbfounded, as were some other members of board – except for Pete Seibert and Jack Tweedy.
I couldn’t believe they wouldn’t have told me of their plans or intentions beforehand. They blithely said that my fiduciary responsibility as a director prevented me from making the purchase. The meeting became a nightmare that started at 9 a.m. and didn’t end until 2 a.m. at Dick Bass’s house.
The next day, I had Seibert over to my house to express how disappointed I was. He just sat there on the couch in silence.
The amazing thing is that Vail Associates overbid one of their own friends and confidantes who had been one of their earliest and strongest supporters. Knowing that I had a $400-per-acre handshake agreement, they secretly overbid me at $500 per acre.
This was at a time when Vail was undercapitalized. The company needed whatever capital was available to develop Vail Mountain. It was not a company that deep in capital. I was truly amazed that at this late date, they thought the previously unwritten understanding was still in effect.
It appeared to me at the time that this was a case of greed. My attorneys looked into it. They felt strongly that it was prima facie evidence and that I was correct and in the right. However, it was also clear to them that the board was going to maintain its stance. This put me in the untenable position of having a situation where my own board overbid me and disguised the real reason, which I believe was greed. They alleged it was a conflict of interest. I found it all to be morally reprehensible, and consequently it gave me no alternative but to resign.
Bob Burford, a man of honor and integrity, held fast to our handshake agreement until, at my attorney’s direction, I withdrew.
Vail’s overbid was registered with the county, thus nullifying the benefits of the land exchange. Burford sued Vail and won. The property was sold within a year to George Webster for $1,000 per acre. The exploitation of Vail and the valley to the west was underway.
I had always thought our group was held together by loyalty, morality, and integrity.
That was the end of my involvement with Vail Associates. It was a great experience while it lasted. However, like most of the original directors and executives, our great dreams came to an end prematurely.
By the end of the 1960s, many changes began to occur. Big developers started to appear and they wanted their projects to be located as close to the lifts as possible. As a result, they offered more money for the land. They also wanted to build on open spaces that had been planned for parks and for view corridors, and they insisted that if they paid more for the land, they should be able to exceed the 39-foot height limitation. The new management slowly conceded to their pressures, and the center of Vail became high density.
The management team itself changed. With a new president and a rapidly changing board of directors, the nice, community-oriented village started to lose its charm. People wondered what the future of Vail might hold.
About 16 years ago, I was asked to show a group of real-estate people some of my early, unedited 16mm movies taken in 1960 and 1961 before anything was started in Vail. I had found them after more than 20 years and had forgotten they existed. Seeing the untouched valley, the reaction of the group was almost unanimous.
“Well, you really ruined a beautiful valley,” they said.
If that’s true, let’s blame it on the inventors of Vail. We might even compare it to the acorn and the oak tree – that little acorn really started something.
Editor’s Note: In a continued effort to help the community understand its roots, the Vail Daily for a second time is serializing Dick Hauserman’s “The Inventors of Vail.” This is the 137th installment, an excerpt from chapter 16, “Inventors Out … Corporations In.” The book is available at Verbatim Booksellers, The Bookworm of Edwards, Pepi’s Sports, Gorsuch Ltd. and The Rucksack, as well as other retailers throughout the valley. Hauserman can be contacted by phone at 926-2895 or by mail at P.O. Box 1410, Edwards CO, 81632.