Vail Resorts and Alterra Mountain Company are making real estate decisions based on the growing threat of climate change’s impact on winter.
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Should current climate change trends stay the course, the spring homebuying season could become longer and more lucrative.
That is because winter is coming later and ending sooner.
The news of less snow won’t mean much to about half of the country’s agents, but for those whose commissions contribute to the $80 billion annual ski tourism economy, the news isn’t easy to take.
A shortened season
In a recent CNBC article, the CEO of publicly traded ski resort operator Vail Resorts, Robert Katz, said that while this year has been positive, its slow start hampered overall resort activity.
Katz told CNBC that “two prior years of poor pre-holiday conditions,” contributed to guests’ hesitancy to buy passes and spend money on his mountains.
Vail oversees 15 ski resorts in the U.S., Canada and Australia, and also develops residential real estate and lodging properties.
Katz that said his company’s ownership of property Down Under is a proactive move to geographically diversify according to weather. Vail has also started operating in Vermont in the hope that a bad western winter might mean the opposite for the northeast.
“I haven’t seen an affect on value yet,” Daimon Bushi, broker at Windermere Park City, told Inman.
With his business partner, pro skier Dash Longe, Bushi takes clients on ski tours of mountain-side properties at Vail’s Park City Mountain Resort and competitor Alterra Mountain Company’s Deer Valley.
“But, we used to have Thanksgiving for people to come out on ski trips, but now no one comes out during that timeframe because it’s so hit or miss,” Bushi said. “People are catching on to the fact that January through March is when they’ll get consistent snowpack, then it dies down.”
Climate change’s affect on snowpack
In a December, 2018 Wired article, Amato Evan, an atmospheric scientist with Scripps Institution of Oceanography, cited a country-wide National Weather Service snowpack study in California’s Sierra Nevada mountains and Colorado’s portion of the Rockies to claim that “mountains are shrinking in terms of snowpack.”
“The summer is coming earlier, and fall is coming later, so the snowpack is being squeezed in on both sides,” Evan said in the article.
Alterra, the Denver company that owns and operates 14 ski resorts, many in the Sierras and Rockies, and sells the multi-resort IKON Pass (note: the writer owns an IKON pass), isn’t swayed by the evidence of abbreviated winters.
The company is in the midst of planning a 94-acre redevelopment of historic Squaw Valley, near Lake Tahoe, California. The resort hosted the 1960 winter Olympics.
The proposed project includes new condominiums, hotels and luxury homes. According to the official The Village at Squaw Valley Specific Plan filed with Placer County, California, in April 2016, the project could see development “equating to approximately 1,877 dwelling units (not including employee housing) using standard rates of 2.0 bedrooms per unit.” As of now, the plan calls for new space for up to 300 employees.
Local opposition to the plan, largely environmentally driven, has resulted in a reduction by 50 percent of the project’s original scope. Still, according to the resort’s website, Squawalpine.com, the development is “just 38 percent of what is allowable per the Squaw Valley General Plan and Land Use Ordinance.”
A large part of the Squaw project is dedicated to year-round recreation. The rise of lift-served mountain bike parks, alpine coasters and warm-season music festivals being held at western ski mountains suggest that resort operators are worried about winter money.
(Inman received no response after multiple attempts to reach Alterra for comment.)
Moreover, the existence of deep pre-season discounts on Vail’s popular Epic Pass and Alterra’s IKON pass buoy the argument that these large companies are concerned about winter’s financial longterm outlook. They want as much income as possible before customers understand what winter will bring.
In the CNBC piece, Katz didn’t shy away from that fact.
“Anything that’s out there that could be a risk to our business, we have to factor in. And it’s one of the reasons why we did launch this season pass. And it’s one of the reasons why we built geographic diversity,” Katz said. “It’s one of the reasons why we have invested in lots of other activities that people can do at our resorts, so when they come to our resorts there’s lots of different choices for people.”
Real estate’s loss
It’s not just the value of homes along the mountains that are at risk if winters continue to shrink. Entire real estate economies are based on ski culture, many of which are nestled along the I-70 corridor in central Colorado.
Park City’s real estate is heavily based on ski tourism, as is California’s Lake Tahoe region. And while the latter may have its namesake lake to help ensure a busy summer, short winters mean a shallow lake, which greatly impacts the appeal of investing in lakeside second homes and impacts countless local businesses based on those buyers, vacation renters and tourists.
Compass Lake Tahoe founding partner and agent Jamison Blair sells property in Squaw Valley and along the famed alpine lake’s crisp turquoise shores. He’s lived in Squaw since he was 8-years-old.
Asked if changing winter weather has impacted the real estate, Blair wasn’t at all hesitant to answer.
“Yes. The answer is yes,” Blair said. “Reason being, the last couple of years have started late. I’ve heard a few times people say they’re not going to invest in a place where it doesn’t snow.”
However, the 2018-2019 winter has been active for northern California, delivering the deepest February on record. Sales and ski-lease (winter-long rentals) activity is strong. “I’ve never been so busy at this time of the year, actually,” Blair said.
“But the four-year drought we had a while back was brutal. Snowmaking is helping, like at (Vail’s) Northstar, and Squaw should probably consider more of it.”
Blair recently joined Compass after years of operating as a family-owned independent. He’s seen a lot of Tahoe winters. However, he recognizes things are changing.
“There is a bit of fear,” he said. “As a skier, I’m concerned about it.”
“But the good news about Tahoe is that we have summer, and it’s amazing.”
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