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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.

The city's entry into the real estate business rankles Medill Barnes, who served last year on a citizens' advisory committee appointed by Webb to mull the future of Winter Park. "Developing a ski base area is by definition a very speculative undertaking," says Barnes. "Base-area developments have gone kerflop all over the state. Should the city be involved in that? I felt no."

However, the WPRA has a way of getting what it wants where the city is concerned. An exclusive organization historically controlled by Denver's wealthy elite, it also has numerous links to the Colorado Arlberg Club, an ultra-secret private club that leases about fifty acres of prime land to the WPRA--and which for years now has shared both membership rosters and dreams of development with the resort board.

And this isn't the first time the WPRA has flirted financially with the private sector. Back in the wide-open Eighties, the resort board allowed a pair of high-flying Oklahoma developers to build a hotel on the same parcel of city land now slated for development. After the developers' vision of a huge three-wing resort was dashed by money troubles, a consortium of savings-and-loans that had made the loan on the project briefly wound up in control of thirty acres of city land. The potentially embarrassing role played by institutions like Denver's Silverado Banking in the Vintage Hotel was kept out of the public eye--in large part because nobody bothered to look.

The latest stab at Winter Park land development, however, already bears the city's formal blessing. That green light came in the form of the May 1994 agreement signed after public pressure forced Webb to back off his plans to sell the resort to the WPRA outright. The 1994 compromise agreement was heralded by the city as a triumph of diplomacy that brings roughly $2 million per year into city coffers. But it also virtually guarantees that the people of Denver will become silent partners in a speculative land deal that could make others much richer.

And silent is the operative word.

The labyrinthine relationships that have governed development at Winter Park go back more than half a century. And despite a flurry of public attention in the last few years, they remain as cozy as ever.

The City of Denver originally obtained ninety acres of land in the area in 1939, via a land exchange with the federal government. The stated goal of then-parks manager George E. Cranmer was to use the land, along with other parcels leased from the feds, to provide the general public with mountain recreation close to Denver. The swap, however, had an additional benefit: supplementing the extracurricular activities of the Colorado Arlberg Club, the tony private ski group that by then had built its own lodge and tow rope on the mountain.

Cranmer, a Denver Country Club member whose many accomplishments included having a city park built across the street from his house, was an Arlberg Club member himself, as were Adolph Coors Jr., Henry C. Van Schaack and other leading socialites of the day. Formed in 1929 to "encourage desirable persons to take up skiing," the Arlberg Club had already purchased 160 acres of land on the mountain by the time the city got into the act.

While other Denver residents suffered through the Great Depression, the hale Arlbergers made headlines in the society column of the Denver Post with their ski contests and construction of a private clubhouse at the west portal of the brand-new Moffat Tunnel. And they displayed a knack for getting the public to subsidize development in the vicinity of their playground.

In 1939, for instance, when skiing was still almost solely a sport for the well-to-do, the federal Works Progress Administration, set up to provide work for unemployed laborers, spent $33,000 for a new ski slide at the area still known as West Portal. That same year, the city entered into a license with the Moffat Tunnel Commission to use about nine acres of state land for the Winter Park base area free of charge. After the ski area opened for business, Denver taxpayers also chipped in maintenance costs for what in many respects remained a private Arlberg venture. By 1950, says Medill Barnes, then-mayor Quigg Newton decided it wasn't proper for the city to support the recreational habits of the wealthy and set about creating the WPRA "as a kind of public buffer" between Denver and the Arlbergers.

Newton, who was an Arlberg member himself, doesn't remember it that way. The ex-mayor says he and Denver millionaire Allan Phipps (another Arlberger who had helped run the resort even while it was under the city's direct control) handed over management to the WPRA simply because the city had other priorities. "The city at that time was strapped for funds," Newton says. "I don't think there was any effort on anybody's part to isolate the Arlberg Club. The club has always been, especially in the early days, a big factor in the use of those facilities."

Phipps served as the first chairman of the WPRA, and several other Arlbergers were appointed to the first board of trustees. Phipps's bank, the First National Bank of Denver (now First Interstate) emerged as the resort's chief lender. And over the years, the club and the WPRA have continued to enjoy an openly incestuous relationship. Current boardmembers W. Scott Moore, Tim McKeever and James Norling belong, while WPRA chairman Kermit L. Darkey of the Mountain States Employers' Council joined in 1973--and then quietly resigned in 1993, shortly before the board began negotiating a possible sale with Denver.

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