Alissa Gulin//Daily Record Business Writer//December 26, 2012
//Daily Record Business Writer
//December 26, 2012
As snow began to fall on Christmas Eve, a White Christmas seemed a tantalizing possibility for many Marylanders. At Wisp Resort in Garrett County, however, it became a reality — and the snowfall delivered more than holiday cheer.
For Maryland’s only ski resort, it held out the promise of a profitable winter season just weeks after Wisp emerged from bankruptcy — and its new owners are already moving forward with upgrades at the facility.
A third of Wisp’s annual revenue is generated during the week of Christmas, according to General Manager Tim Prather, but warm temperatures the past two years delayed the resort’s opening and threatened to derail its bottom line.
This year, Wisp was able to open several of its slopes on Dec. 15, and Prather’s team was working to open the rest before the end of the week. On Wednesday, hopes were high as more snow blanketed Garrett County, which typically receives 100 inches per year.
“We have no control of the weather; it’s the greatest challenge,” Prather said. “I don’t have a crystal ball that tells me what the weather is going to be, but right now it’s trending positively for us. So we’re optimistic — we have to be optimistic.”
Earlier this month, EPT Ski Properties, a division of a Kansas City, Mo., real estate investment trust, bought the resort for $23.5 million after the previous owner filed for bankruptcy related to loan defaults. Everbright Pacific, an affiliate of Salt Lake City-based Pacific Group, came on board to manage the resort through a lease partnership with the REIT, but Prather and his local management team will continue in their roles. Prather said Wisp has 700 winter employees.
A $5 million investment will bring new amenities this year, including a ski slope designated for beginners and more seating in the main lodge, Prather said. More substantial upgrades are planned for coming years, he added.
Wisp is nestled in the small town of McHenry near Deep Creek Lake, a popular tourist destination with a variety of activities in addition to the skiing, snowboarding and other attractions offered at the resort.
Patrick Kane, co-owner of Coldwell Banker Deep Creek Realty, said the real estate market is strongly linked to the area’s thriving tourist industry. Thanks to Wisp, Deep Creek’s many vacation-home rentals — already popular during warmer months — are in demand year-round.
“If there wasn’t something for people to do, I’m not sure they would come just to stay in the woods,” Prather said. Real estate development and the resort “kind of feed off each other as they continue to develop,” he said.
That relationship can be mutually beneficial during periods of economic growth, Kane said. But it can spell disaster during a downturn.
That’s what happened last year, Kane and Prather said, when Wisp’s previous owner, DC Development LLC, filed for Chapter 11 bankruptcy protection after defaulting on about $30 million in loans that financed construction of a golf-course community attached to the resort.
“It was the real estate that was the trouble, not the resort,” Prather said. “I think the downturn in the real estate market is what affected the whole development. They built the golf course in anticipation that they would sell the real estate around it. And that obviously didn’t happen, so that created strain around the loans.”
It was simply poor timing for the investment, Kane agreed.
“They spent an incredible amount of money on the golf course and the houses and lots around there,” Kane said. “By the time it was ready and the lots were released, we were no longer in a boom real estate market. So the sale of the lots just froze, and that’s what was going to be paying for all of it.”
But now, properties in the area are selling again, and Kane said he expects that trend to continue.
Another party, National Land Partners, bought the golf course and other land for $6.1 million, but Prather said EPT Properties is in the process of buying it back.
Even if a new owner hadn’t signed on by the resort’s target opening date, Prather said skiers would still be hitting the slopes at Wisp this year.
“The resort would have continued to operate under the court or the banks — it would not have closed,” he said. “It’s just too important to the region. That’s not even a scenario I could even imagine. The whole employment base would have been severely impacted. I don’t think anyone could conceive of that happening.”
If Wisp had temporarily closed, however, there would have been dire consequences for the winter sports industry in Maryland.
“There wouldn’t be winter sports in Maryland,” Prather said. “We’re it.”