Vail, Intrawest settle dispute over Keystone development
December 24, 2003
DENVER – Ski industry giants Vail Resorts and Intrawest Corp. settled an ugly dispute Wednesday after months of bickering about developing resorts in the Colorado Rockies.
Under the deal, Canada-based Intrawest will pull out of commercial development at Keystone, a resort owned and operated by the Vail company.
Vail Resorts had sued Intrawest last year after it signed a deal to operate the Winter Park ski area for the city of Denver and develop residential and commercial sites.
Vail officials said that deal violated a no-competition clause it had signed with Intrawest after Vail took over Keystone from its previous owner, Ralston Purina. Vail dropped the lawsuit on Wednesday.
Intrawest’s two Colorado resorts, Winter Park and Copper Mountain, are intensely competitive with Vail’s four resorts, which include Keystone, Breckenridge, Beaver Creek and Vail.
The deal calls for Vail Resorts and Intrawest to each receive parcels of developable land at Keystone, though Vail will assume control of certain commercial property. Profits from condominium sales will be distributed to both.
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“”The partnership will be dissolved once existing inventory has been sold,” said statements issued by Stephen Forgacs, spokesman for Intrawest, and Kelly Ladyga, spokeswoman for Vail.
Other details of the settlement were not disclosed.
“”There was no exchange of cash,” Vail Resorts chief executive Adam Aron said. “”We get to be in charge of our own destiny at the Keystone Resort.”
He said both companies had acted honorably, though “”it was unnatural to be working with your single largest competitor.”
David Kleinkopf, executive vice president for Intrawest, said there will be no job losses as a result of the deal.
The development at Keystone, which started in 1993, includes 4,561 new lodging and residential units, and 382,000 square feet of commercial space. It will eventually be worth hundreds of millions of dollars.
Under the settlement, undeveloped land in Keystone around River Run, Lakeside Village and the Ski Tip area will be split. Vail Resorts will receive the developable land around River Run and Lakeside Village. Intrawest will receive developable land in the Ski Tip area.
The Keystone Real Estate Development company –or KRED – will be dissolved, with its assets split “equitably” between Vail Resorts and Intrawest.
Intrawest is still working on its development plan for Winter Park, whose base mountain lodging lags behind other resorts but has agreed to spend $50 million on improvements such as lifts and terrain expansion.
Kleinkopf said Intrawest will be meeting next month with the Winter Park Recreation Association to discuss its master plan for residential and commercial development. The association, appointed by the city, had been running the resort. Once association approval has been gained, Intrawest will meet with the town of Winter Park to seek its backing.
How the arch rivals Vail and Intrawest found themselves married in a real estate development package is an interesting piece of Summit County history.
The partnership came about when Vail bought Keystone and Breckenridge ski resorts from Ralston Purina six years ago. A real estate deal was attached to Ralston’s sale of Keystone to Vail.
Ralston and Intrawest had formed an alliance four years earlier in 1993. The Ralston/Intrawest partnership managed and developed commercial and residential resort properties. The competing ski companies of Vail Resorts and Intrawest have since had shared interests in Keystone through KRED. Intrawest was the managing partner.
Development plans are in the works for River Run and Lakeside Village, but Aron said proposals are not final.
However, the changes at River Run – such as the new Parrot Eyes bar and other restaurant changes – probably would not have happened this year if divorce negotiations had been less fruitful.
“This amicable divorce of Keystone interests is good for Vail Resorts, it’s good for Intrawest and it’s good for the consumer,” Aron said. “We’ll be able to get things done easier when we only have to talk to ourselves. It’s much better and easier than having to talk to our largest competitor.”
Now Vail Resorts and Intrawest will be able to freely develop and manage their own operations without consulting each other, Aron said.
Summit Daily News reporter Christine McManus contributed to this report.