Ahhh… the Mammoth Airport. Unfortunately, asking me to “cut through the crap” on the Airport issue brings me back full circle to many of my past topics and rants. But of course that’s why they were topics and rants to begin with.
I often receive requests from people who want to come and speak at my office meetings (talk about having to cut through crap!). So if I allow them, my request/demand is “tell us something we don’t know”. Often times there is dead silence. (You mean I just can’t deliver the same old canned babbling? I have to think? Well yes, otherwise you’re wasting our time.) So dear reader, I’ll try not to waste your time.
The Mammoth Airport (I skip the silly /Yosemite part) is now a forefront topic again. Many of the obstacles of the past have been hurdled in the past 30 days. There’s plenty of recent press regarding both the Hot Creek lawsuit and more rumbling about the possibility of regular air service starting next winter, so I won’t belabor the details. And out of manure can grow delicious fruits, vegetables and beautiful flowers. But it takes hard work and care. Yes, as I post this, the runway is being torn up and redone. Based on all the new survey sticks it looks like they might even try to make it look less like a camel’s back. Grind it up, level it out, lay it back down. And with all the latest aviation doodads. Work completed in three months and rumored to be contracted under budget. And a new terminal building too. Almost all of it paid for by FAA monies.
So will there be anybody to use it, and soon? I’ll get to that.
The other noisemaker has been a jury award of $30 million to Hot Creek Development. The judgment is against the Town of Mammoth Lakes. Nice hullabaloo this is. Every drunk in town is celebrating. Everyone else is disgusted. But is anybody paying attention to the news that a similar lawsuit was filed the week after the trial decision––against Mammoth Mountain Ski Area and MMSA CEO Rusty Gregory personally? Rusty dismissed it and was reported as saying he’d be saving his pennies for that one. Well I’m no lawyer but something funny is going on here. The judge was painted by the press and the Town as steering the jury into this decision and now we find out that the judge apparently separated the cases/defendants a long time ago.
The Town’s case is likely to go to Appeal. The case against MMSA/CEO is just starting up (they may have to try that in another state). Some insurance companies are surely to be involved. And it looks like the word “settlement” will become larger as time goes on.
But the question I ask is––How can there be a $30 million award for a project that now can’t (or shouldn’t) be built anyway and isn’t economically viable? (That’s my opinion.) If we can’t sell beautiful Westin units or swanky fractional Club shares right next to the Gondola, who the hell is going to buy anything down at the airport? Yeah, the view is spectacular. But have you ever lived or spent considerable time next to an airport? And you would be thankful for the breeze when sitting poolside, otherwise the no-see-ums will eat you alive.
So what’s this big award about when circumstances may be saving these guys from making the same mistake Tallus, 80/50, Westin, and others have already made. And as the buyer’s financing for these types of units is evaporating––except for the highest quality buyers with substantial down payments––it makes the project less viable every day. And don’t expect that to change after the Election, or the Olympics, or whatever delusional trigger some folks believe is soon to come to make it all better. So this saga is far from over. And they’ll likely be cutting through some serious hubris before it’s all over. This could actually make for some good reality TV. Stay tuned.
So now back to the possibility of regular air service. The FAA has issued their “Record of Decision”, blah, blah, blah…So the door was opened just the other day for those final negotiations to occur. So will the Powers-That-Be make it happen? God knows they’ve had long enough to talk about it. All it takes is some subsidy. But oddly the PTB have been nothing but momentum killers since shortly after Starwood became owners of the Ski Area two years ago. (Or is some new ownership/management on the Horizon?) And I will admit that my common sense thinking hasn’t made much sense lately.
But here is what I do know. The condo hotel development ship is sinking fast in almost every market in the country. Mammoth’s best project to date, the Westin Monache, is in the real estate toilet (as proven by the volume of buyer defaults, inventory and lack of resales). Village units are now heading into foreclosure and subsequently softening prices to levels below what the units originally sold for. The ship is listing hard here in Mammoth. Meanwhile, developers have paid vast sums for raw land with condo hotel land use designation. This ship is in desperate need of being righted. Condo hotel units are primarily designed for “fly-in” tourism. (I’ve discussed this ad nauseam.) Here is the chance to get “one of the pieces of the pie” (as Rusty always referred to them) right to help buoy the ship. A few years of seasoned, regular air service is critical to the future marketing of high-end condo hotel product (amongst other things).
If all the major landholders don’t work to make this happen, the value of their land and future developments goes right down the tubes. They might as well call their bankers and give them the bad news. (Of course, maybe a few local real estate agents could work out a nifty short sale for them.) So there’s the crux of the matter. Either it happens, and is sustained, or the future of condo hotel development in Mammoth will fall into a state of depression. But the bankers can always take the beating, account for the “write-down”, and in the 2015 Mammoth General Plan these parcels can morph into some other vision––maybe more affordable housing––since we’ll all need it. Such is the state high finance today.
And finally, another less important but awkward situation looms. The FBO––fixed base operator (Hot Creek)––at the Airport has a judgment against the owner of the airport (the Town) and is now suing the major party to the subsidy (MMSA) and we’re all suppose to get along and play nice. When will the reality TV people show up? And does Rusty get to keep his one-of-kind VIP parking spot on the tarmac? Hell, that’ll cost a few hundred grand in attorney’s fees alone. So readers, chuckle all that up over a few beers.