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.
Paul,
I always enjoy reading your blog. Great Stuff.
You left something out of this one though.
Mammoth has had commercial air service 3 times in the past. One owned and operated by Dave McCoy. Most recently MD80 jets were used and subsidized by Mammoth Mountain. That group had such low traveler numbers that they ended up calling “mechanicals” on a regular basis and using the jets to fly charters to Las Vegas instead. That deal died after less than a year.
There is absolutely no reason to believe it will work now without a subsidy to fly empty jets to Mammoth for at least several years.
When I lived in Mammoth and worked for the mountain the forest service set limits on the number of daily users allowed. I assume they are still doing that. So assuming you do get all these people and all these hotel/condo deals where is that they are going to ski? We hit capacity on a regular basis well before there was any Village or Westin Monache let alone the other planned projects.
Tennis Randy
Paul,
I always enjoy reading your columns. They are extremely entertaining and to the point. You left something out of this one though. It appears that everyone conveniently forgets that Mammoth has had commercial service three times in the past, one actually owned by Dave McCoy, and that none of them have ever worked.
The most recent attempt flew MD80 jets out of Los Angeles and was subsidized by Mammoth Mountain. That company had so few travelers that they began routinely calling “mechanicals” and using the jets to fly charters to Las Vegas.
The service was ended after less than a year.
There are just not enough travelers to justify air service.
My other comment or question is; When I lived in Mammoth and worked for the Mountain we had full days when the forest service would not allow more skiers on the mountain (we hit forest service determined capacity). Where are all these new folks supposed to ski?
Tennis Randy
I really look forward to your posts. Thanks for taking the time to write them.
I first skied there in 79. I’m an easterner by birth and will never forget the first time skiing on snow and not skiding on ice.
Geez, I think they were talking about the airport being a boon way back then.
Autos will always be the prefered way to get to Mammoth right? What does $4+ gasoline do to that? (dig the knife a little deeper right?)
I wonder how low prices will go and when the bottom will be; two wonderings to which there are no answers.
Damn, late at night, I still remember that end unit for sale at Lakeside at the last bottom (around 2000) for around a 100k. Bad feng shui as the headlights of the cars coming down the road from warming hut 2 hit it but cheap still.
Thanks again. Keep us posted. Betty Davis said it best. With respect to THIS real estate thing, “We’re in for a long night.”
P.S. Anyone playing golf at Eastern Star?
mm1968
Banks/Lender are in trouble and calling our office offering discounts on commercial loans for early payoff. Lenders do not want to make loans and it is impossible to get buyers approved for low cost housing. The Fed’s rate cuts have not changed the existing loss and blood letting for lenders. Lenders are in save-the ship, gather money mode, not lending mode.
Real-estate sales for the next couple years are about much more than air service for Mammoth, but accepting the fact that air service is the key to “future” high end hotel and real-estate sales, let’s snap our fingers and have Mammoth air service from two SoCal locations. Then what?
Who, form where is going to fly from SoCal to Mammoth vs Reno or Salt Lake or Colorado. Once SoCal travelers decide to accept the airport pain and associated costs, the difference between Mammoth and Salt Lake is minimal, so why go to your drive ski area? Yes, summer or fishing is a different story, but is that what air service is about?
That being said, I think there is a SoCal opportunity for mid-week, SoCal air service and Mammoth land owner business from SoCal that did not exist ten years ago. I think SoCal air service will be Mammoth’s biggest customer. What’s new?
As an international Sales & Mktg. VP, I watched my young, well paid employees from all over the USA, Europe and Asia travel to LA and got a feeling for what western USA experiences they wanted. The Brits and Japanese knew of Mammoth and would have loved to visit Mammoth, but no flights. Some went to the effort of rental cars filled with Brits, Japanese and the occasional Frenchmen. Yes, I think internationals visiting SoCal in winter would fly to Mammoth. Not sure it will be mostly mid-week.
Texas, Chicago and points east are not going to do connecting flights via LA to Mammoth. Even direct flights from Texas or Chicago are not passing up Colorado, Utah or Reno. No way except for the one time check it out visit. So what visitors, from where is Mysterywood and TML betting on for their “MID WEEK” revenue transformation?
So, even if Mammoth had four flights, vs Reno’s Casinos and 130 flights per day, who is going to be Mammoth’s mid-week, flying cash cow? SoCal and Socal visitors with three days to get away. Is that what Mysterywood, Ritz and TML are counting on?
So, if Mammoth weekends are topped out and mid-week is the promised land of transformation associated with AIR SERVICE, what visitor butts from where are going to be warming Mammoth bound flight seats, mid-week?
Please explain the error of my perspective.
I haven’t seen any analysis on where they think the visitors will be coming from. I am assuming the flights will come from LA/SD. As a former foreigner, I knew lots of people who came to US/Canada to ski, but I don’t think overseas travelers will pay big $ and not say they went skiing at the well known Whistler, Aspen, Vail etc resorts. The rest of the US has such easy access to CO, Utah, Tahoe that to come out to Mammoth (Via LA?) is just too much extra time and $ for not enough benefit). I met lots of British at Keystone who liked the cheap skiing, but Mammoth is hardly a deal anymore. Maybe if I was in San Diego and a wealthy couple I would pay the $ and save the long drive, but coming from LA especially in the Valley the time savings is not enough to justify the $. And with a family flying is miserable. Finish the 395 to 4 lanes and it will be no contest!
Digby.
I agree. There are enough Angelenos, San Dieogans, and others in southern CA to fill up Mammoth weeks on end – even during the midweek.
The only thing that keeps me from going to Mammoth more often from LA is the taxing 2 lane divided highway. Give me a safer 4 lane divided highway, even better divided by a median, and I’llbe there 3-4x more often.
I will never use an airplane to go to Mammoth. Air travel is too expensive and too much trouble nowadays.
BBR
mm1968
When you stop arguing about if and when Mammoth air service will or should be available, and you start asking who would warm the seats on four flights a day for Mammoth, the silence is profound
Does anyone think that Dallas or Chicago will fly past Colorado/Utah for Mammoth and invest in the Werstin, Ritz or 80/50?
A previous poster suggests that international LA visitors are much more likely, once buying an air ticket, to go to one of the big name Utah/Colorado resorts.
I do not think Mammoth’s “family” base will become flying visitors. I do think, given attractive mid-week package deals, SoCal empty nesters, DINKS, and singles could support a limited number of flights per day and boost mid-week revenue.
The Mammoth Promiseport just may be an art history Phd. Beautiful for a few.
Lets see…mmmm…Fly from Texas to LA to Mammoth…Arrive, get in a taxi, go to the Village. Its late afternoon, can’t ski today. Guess I will walk around the “new” village the brochures spoke so grandly about. 10 minutes later, I have completed the the “village tour”. I am here for 5 more days. What am I gonna do after skiing?
I spent $150 at LuLu, my waiter smelled like he had been smoking all day. His fingers nails were black from working on the snowmobile.. His apron had not been washed all season. Food, well quite marginal.
Maybe I will get Sushi at REI Recreational Equipment Inc? Whah?
Anyways, I had sushi at Whistler, which is adjacent to the ocean. How fresh can REI fish be? Should I risk it? There is nobody in there, have they rotated the fish stock?
Its Sunday evening. Where did everyone go? The village is a ghost town. Its 7;30 pm and the only thing open is Starbucks.
I guess I could have gone to Vail. I might have been able to go to a concert, a hockey game, a club, a couple bookstores. Man, the Vail Village….there is still 5 blocks of stores and restaruants I havnt checked out. The town is bustling.
I guess the locals in Vail have a way of making a living. Oh and only 2 hours from Denver Airpot.
Guess I will come back to Mammoth to check out SLEDZ….NOT.
I only went to Mammoth once this season,(even spring was $64 tix x 6 people), but I noticed a lot of stuff on Main st near Minaret was boarded up. The mexican-american-italian(?) restaurant which was there for years was boarded up along with that old skanky motel next door. Was this the economy or did someone buy it to redevelop it and now is stuck with bad timing?
=Digby=
Will an airport work? Well I live on the westside of LA so to get to LAX, park check in and wait to board let’s say an easy hour and a half, probably two hours. Flight leaves on time. Figure an hour flight. Unload. Taxi into town. Total time minimum of 3 1/2 hours door to door probably 4. Drive time usually 5 hours and getting easier as more 4 lane comes on-line. So that savings in terms of time is probably an hour. My wife has talked about flying as an alternative to the drive and to stagger arrivals and departures when schedules don’t work. Ok. I get that and it makes sense ever so often — but what about the other 90% of the time? Mammoth is about families and college kids. Hence the death of 80/50, Westin and the Ritz. College kids aren’t going to fly. Families and all their stuff (and their lab/golden retriever) aren’t going to fly. Jet-setters? The only jet-setters in town are those who settled into booths at Whiskey Creek in 1982 and never left. Anyway, not to be negative and maybe the airport and regular flights will be a great success. What do I know. I thought the Village was an awful idea and look how well it’s doing…well, on second thought.
So good luck to the airport and all it is supposed to bring to Mammoth. I will continue to enjoy all that Mammoth was and is … and tip my hat to those who will spend OPM or even their own to try to make it something it never was and never will be. Oh, and for crying out loud, don’t speed between Bishop and Big Pine.
Finally, Paul I appreciate all your insight and humor. Everyone has a point of view but to have a sense of perspective is truly something of value.
Peace.
Wow, where were all of you eight months ago. I was beginning to think all californians lived in a fake reality. Yes, Mammoth went through a housing bubble like everywhere in the U.S. Yes if you bought a 2 bedroom condo in 2004 for 300k, it is going to drop more than 50% in value. And isn’t that what all of this is about anyway..why we are all reading this…People are trying to squirm out of the impending reality that they are fucked for life. They drank the coolaid and got greedy, maybe got the downpayment from their grandmother and bought when no one should have…airport, ritz, WHAT ARE YOU TALKING ABOUT. That will never happen…So stop trying to think up ways that may save your bad realestate investment that will bury you. You are the only ones that care. Mammoth real estate owner’s. You don’t think renter’s or visitor’s care, only those that are reaching for some bs event to save them from their impending doom from making a very bad real estate decision. Good luck to all of you that bought real estate in mammoth over the last 4 years. You will never bounce back from that decision. Once the investment drops 50%..give it another 13 months. It will not bounce back..Real estate is DEAD. little theory called supply and demand curve….know it…own it…peace out
The previous posts contribution, insight and perspective is such a gift.
America will never recover from the great dpression, Dresden is still in ashes, Hiroshima is a waste land and NYC closed down after 9/11 for good.
Those events pale, in the history of human disasters, to the economic troubles in today’s economy. There really is no hope.
Realestate is dead and it is never comming back.
I need to call my children and leave time capsules for my great, great, great grandchildren to inform them of this timeless truth.
Japan=18 year housing and economic depression, since 1990…Do you think individuals at your podunk ski town are smarter than the japanese. They couldn’t make things work because they are not as smart as you?
Russia…happened overnight for them..they put the first man in space.
It is all economic. When you can’t pay your bills, the world turns away..
Don’t think you are special and nothing bad can happen to you, just cause your mom and your 10th grade history teacher told you so.
“It’s ok for being an idiot, things will come back and you will a ok.” said Mom.
Start thinking about what really has happened over the last five years, and think about the effects of this on a macro, worldly scale.
Stop thinking just because you are an american that you are entitled to be an idiot and worthless.
Housing prices, if they do come back, won’t for fifty years atleast. Check some graphs out.
Gee you’ve persuaded me, particularly after I “checked those graphs out” you drew in crayola. I need to find the nearest bridge and jump.
Just as soon as I emerge from my hot tub, take a sauna, have a great meal at Skadi’s, and calculate the day’s net-net between the longs and shorts.
And yes, it is precisely because I’m an American that an “idiot” like me (how charming you must be at dinner!) can and does look forward to the future with more than dour Euro hopelessness.
I just hope you don’t own a dog.
“Own” a dog? The poster of topic is far to wise to “own”. More likely the dog owns him.
When the dogs can no longer pay there master’s mortgages and the banks all go under, never to return, the renters will tahke over the world.
Don’t consider centuries of history, because we are at a truly unique turning point in human history.
OK, enough wise guy. It may not be 50 years, but it will be a few more years on top of the last two. The next sellers market or two may not be as hot as the last irrational, buying frenzy. IMHO, that is a good thing.
Oh, Skadi’s. Are you kidding me?
What an overpriced, watercooler restaurant…”hey, I ate at Skadi last night” Who the F%^K cares?
Hold on to your potato’s. You think we have “had” the credit crunch?
The nasty wave is coming. It aint gonna be pretty. I looked at 4 loan apps this week in Orange. Each deal, “they want to down-size”. The current balance on their Neg-Am loans have gone above the original balance. Do you have any idea what that does to a credit score? Ooops…sorry, can’t downsize. Good luck meeting your fully amoritized payment.= FORECLOSURE. They have no option but to walk away. Have any idea how many NegAm deals both CFC and WaMu did in California? YIKES!
The so called “HIGH-END” Real Estate is going to take a pummelling in 2008 & 2009
Good luck to you and Mammoth. Another 35% haircut on the way.
1 million in 2005, will now sell for $650. Doubts?