Feds issue ultimatum to VR over land swap
Vail Resorts has been threatened with a lawsuit by the U.S. Forest Service unless it follows through on a land exchange contract it signed 25 months ago and has not yet completed.
The demand came from the legal arm of the Forest Service last week. The goal of the complex deal is to turn private land over to the U.S. Forest Service and give Vail Resorts and the Eagle Valley Land Trust, Forest Service land near Avon that can be used for open space and affordable housing.
A spokesman for Vail Resorts Monday said the company will pursue developing the land as required by the agreement and will present its development plan to Avon within the 45-day Forest Service deadline.
Land swaps work like a lunchroom sandwich swap – each party has something the other wants. Land swaps, however, are far more complex than trading Cheetos for Twinkies.
This deal involves 509 acres south of Eagle that the Forest Service would receive in exchange for 480 acres between Singletree and Avon and an additional 37 acres in disparate pieces across the county. The Forest Service will acquire the pristine wetland and upland Vassar Meadows and will give away land of similar value.
Under the agreement inked in Dec. 2001, Vail Resorts contributed $4.3 million to the exchange and would receive 40 acres of the 480 acre parcel west of Avon for up to 300 units of affordable housing. The remaining 440 acres would be protected from development by a conservation easement held by the Eagle Valley Land Trust.
But almost immediately, the resort company experienced difficulties with the parcel in west Avon. Access to the property will prove so expensive that it has all but queered the deal, a company spokesman said.
It will cost more to access the property by road than acquiring the property itself because Vail Resorts would have to purchase land for an right-of-way and it will be expensive to build a road across the steep hillside, the company says.
“It will cost several million dollars for access,” said Jim Mandel, executive vice president of Vail Resorts. “I would emphasize zoning of this is problematic and complicated. There are no attractive or affordable alternatives to get access to the property.”
The Forest Service ultimatum, its second in the last 120 days, demanded Vail Resorts “diligently and timely pursue” its end of the agreement. The resort company is required under the terms of the exchange agreement to file a zoning plan with the town of Avon.
The delays are unprecedented, according to the Forest Service.
“It’s taking longer than any land exchange I’ve seen in the last 25 years,” said the Forest Service’s Barry Sheakley. “This is the first time I’ve ever seen it happen.”
The Forest Service said acquiring the 509-acre Vassar Meadows portion of the trade is its highest land-swap priority. That land was envisioned for use as part of the proposed Adam’s Rib development. Those plans, which called for a Beaver Creek-sized resort, were abandoned in the mid-1990s
“We’re asking them to live up to their end of the agreement,” said Forest Service land specialist Steve Rinella. “We’ve got a piece of ground that’s worth $5 or $6 million and we’ve finally got it into an arrangement to convey it so the public gets something out of it.”
Vail Resorts had intended to access the property by extending Nottingham Road. But that plan crumbled when it was discovered the proposed route cut into Interstate 70’s right-of-way. The steep hillside also leaves few, if any, alternatives for accessing the 40 acres that are approximately one-quarter mile west of the cul-de-sac on Nottingham Road.
The stalled exchange has cost one of the participants in the exchange, the Boulder-based Conservation Fund, $10,000 per month. The fund temporarily acquired the Vassar Meadows parcel, to keep it from being developed, using an 18 month, $2 million interest-free loan provided by Vail Resorts. Since then the organization has been paying off the loan itself.
“I’m counting on (Vail Resorts) to close the exchange,” said the Conservation Fund’s Tom Macy. “Our purchase price plus holding costs have already exceeded the amount of money we would have received in this exchange. We’ve been holding the bag and we can’t hold it forever.”
Several other organizations have raised money for the stalled exchange. The Eagle Valley Land Trust raised $150,000 while the Town of Avon budgeted $300,000 to help acquire the open space created by the land swap west of its boundary.
“New Dawn’ delay?
Adding pressure to the deal is another, more pressing land exchange near the Vista Bahn in Vail that the resort company is pursuing. The $75-million “Front Door” renovation project where the head of Bridge Street meets the base of Vail Mountain hinges on the Forest Service giving up two acres there and agreeing to accept 160 acres Vail Resorts owns south of Arrowhead at Mud Springs, plus 136 acres in South Game Creek.
The Front Door development and others are being marketed heavily by the resort company this winter as “Vail’s New Dawn” and is the de facto start of a $500 million, multi-year redevelopment of properties owned by the company in Vail and Lionshead.
But until the Vassar Meadows land exchange is completed, the Forest Service has said it will not participate in any other land exchanges.
“We are willing to move forward with the Front Door once we get current issues resolved,” said Sheakley.
Mandel said the Forest Service is holding the company’s other development hostage until the Vassar Meadows/West Avon land exchange is completed.
“Yes. They are linking the Vassar Meadows/Avon exchange process to the Front Door,” said Mandel. “We can’t do the Front Door until we close on Vassar.”
Mandel dismissed speculation that the resort company’s performance last year has hampered its ability to complete the exchange. Vail Resorts announced it lost $14.5 million in its last fiscal year, largely due to a drop in tourism caused by the war with Iraq and a continuing recession.
“There are no financial constrains on our ability to perform under the contract,” he said. “None whatsoever.”
Cliff Thompson can be reached via e-mail at: email@example.com or by calling 949-0555 ext. 450.