Top

news

Stories

 

PRIVILEGED INFORMATION

DENVER BEGINS A LITTLE-PUBLICIZED DOWNHILL RUN INTO THE REAL ESTATE BUSINESS AT WINTER PARK. BUT WHOSE CASH COW IS IT?WHITE OUT THE CITY AND WINTER PARK BURY THE DETAILS OF A FOR-PROFIT REAL ESTATE DEAL ON PUBLIC LAND.

part 1 of 2
The City of Denver is about to take the plunge at its Winter Park ski resort, pledging city resources to a high-stakes real estate deal at the base of the ski runs. But finding out just how that deal will work--and exactly what risks taxpayers may be asked to take on--is like trying to find a ski pole at the bottom of an avalanche.

The Winter Park resort, owned by the city since its inception in 1939, is posting annual profits nearly double the 1993 average for ski areas in the central Rockies. The nonprofit board that runs it for Denver, the Winter Park Recreational Association, has spent nearly $1 million over a ten-year period planning and designing a ritzy European "village" at the base area, complete with upscale hotels, condominiums and retail shops.

But neither city officials nor the WPRA's $218,000-per-year president, Gerald F. Groswold, whose father belonged to an exclusive alpine country club that pioneered skiing at Winter Park, want to share financial details of that proposed mountain playground for the well-off with the resort's owners: the people of Denver.

In fact, city officials don't seem to want to know exactly what's going on at their own resort--even though they're now engaged in an effort to give the WPRA ninety acres of city land for development. "One of the premises of all this is there's no reason to think the city is expert in managing a ski area," says Andrew Wallach, an aide to Mayor Wellington Webb who has shepherded the city's dealings with the WPRA. "So we give them a fair amount of slack as long as they produce the financial results we want. Our assumption is that what's good for them is good for us."

The city views the WPRA so charitably, in fact, that in 1993, Mayor Wellington Webb and City Attorney Dan Muse cut a secret deal that would have allowed the WPRA to buy the resort for as little as $29 million--$26 million less than the resort's own appraisers said it was worth and $39 million less than its estimated value with the base development. That plan to take the ski area private was shot down after city officials revealed it to the city council just days before a required vote.

Before the aborted insider sale, Denver received only about $7,000 per year from the resort, which in the past decade has posted average annual profits in the millions. Last year city officials negotiated a new agreement that, while calling for increased annual payments to the city, also contains a veritable road map of escape routes for the WPRA. It also locks the city into a 3 percent return on its asset--roughly what the city could get in a basic savings account.

After months of huddling privately with WPRA officials, however, the Webb administration has become a true believer, giving its stamp of approval to Groswold's longtime desire to expand the resort and compete more aggressively with Colorado's privately owned ski areas. The WPRA, though, has always been reluctant to release information about its financial dealings. And it remains tight-lipped, even as it prepares to lead the city into a multimillion-dollar deal that will almost certainly include a profit-sharing arrangement for the benefit of a private development company.

The resort, for instance, recently sent City Auditor Don Mares a copy of its 1995 financial statements--along with a letter instructing Mares that the information was "not for publication or general distribution." (Mares released the documents to Westword anyway.) It continues to refuse to allow members of the public to attend its monthly meetings, arguing that it is not bound by the Colorado Open Meeting Law. It says it has made no decisions about how to structure a deal, even though the base-area development is expected to be largely completed in just five years. And a recently released "economic study" and appraisal of the resort, paid for by Denver taxpayers, was held up for a full eight months so the WPRA could delete profit projections and other information relating to base-area development.

"I see no reason for it," says parks advisory-board member Tony Trampler of the decision to allow the resort to "redact" the $40,000 study. "To me, it's a public document. The WPRA is acting as an agency for the city, not as a private stockholder corporation."

Trampler argues that because the city apparently intends to form a partnership with a private developer--meaning it will assume risk in the project--citizens have a more pressing need for information on Winter Park than they have even at Denver International Airport, where the financial burden is assumed primarily by private bondholders. "The citizens of Denver are the owners," says Trampler, "and if they are the stockholders, they certainly have a right to know what's going on."

Winter Park, however, is a corporate aberration in Colorado: an agent of the city that pays no property or income tax yet has traditionally operated under a cloak of secrecy more common to closely held private concerns. And it's poised to become even more of an anomaly. Last year the nonprofit WPRA incorporated two for-profit subsidiaries: companies that exist solely to develop 71 acres of prime real estate at the base.

1
 
2
 
3
 
All
 
Next Page »
 
My Voice Nation Help
0 comments
 
Loading...