Mammoth Real Estate Q&A — Mammoth Goes With The Flow!

This Mammoth Real Estate Q&A appears in the Memorial Day Weekend 2025  issue of The Sheet.

Q: In your newsletters you often mention the concept of “the flow of capital” into Mammoth like it is unique or something new. Can you give some historical perspective on this concept and what specifically you see today that seems especially relevant? 

A: The recent “flow of capital” into Mammoth is indeed profound in the historical perspective. Relative newcomers to the community probably won’t see it, and certainly don’t appreciate it, but there are some of us left who are almost amazed at the current state of affairs. This flow of capital is a gift to the community, it should be appreciated, and is an opportunity not to be wasted. It is a classic “nothing good lasts forever” moment in time.

What do I mean by the “flow of capital?” After decades of being involved with real estate, planning, development, taxation, etc. in the region, it is just something that is naturally on my radar. But for many it is probably just some obscure concept. What it really comes down to is the level of new investment dollars being pumped into the community. Some of it is real cash, some of it is borrowed (debt), and some of it is hoped to be “refinanced” by purchasers or new investors at some time in the future. One of the keys is that while some of the investment dollars are static, there is the creation of what is known as the “velocity of money”, and it flows around-and-around in town and the region.

One thing that also makes this recent trend so profound is that the rest of the world is competing for these investment dollars, and that for many decades Mammoth simply wasn’t competitive at attracting or capturing these investment dollars. And even worse, when the big investors (aka whales) came, we weren’t able to keep them interested compared to what the rest of the world had to offer.

The “velocity” aspect is also one that is greatly under appreciated. This recent flow of capital includes many new projects, major redevelopment projects, and the new purchases of residential properties, both individual single-family homes and condominiums. It also includes the subsequent flow of capital (via taxation) to the public side for major new projects and substantial maintenance. This includes the confidence for the public side to take on new, long-term debt. All of this creates tremendous velocity, or the repeated expenditure of dollars through the community and region. It trickles over and around to almost every business and person.

Most residents working in the community have their heads down and have busy lives. Second homeowners come and go. They might not have noticed all of the impacts and nuances. There has been tremendous investment by Alterra into the Ski Area enterprise. This capital investment alone is especially consequential because it is the psychological leader that inspires the rest of the investment. In simple terms, money follows money. We saw this in the Intrawest era. 

In hindsight we can see that Intrawest was primarily here for the real estate development opportunities. They improved lifts and the ski runs, and they understood the longer-term cash flow concept of the “front desk” and hospitality business. But they had an insatiable appetite to build and sell real estate units. They inevitably found their profit margins squeezed by the high cost of development in Mammoth. And ironically, all of the assets they left behind (retained ownership of) are now part of Alterra ownership and umbrella.

The Starwood/Sternlicht ownership era brought great, initial enthusiasm but then turned into a floundering mess. The financial conditions of the times didn’t help, but today there is no real good understanding in what they saw here in Mammoth. They really weren’t ski industry people. And they definitely didn’t influence any flow of capital into the community. They certainly did bail Intrawest out of their ownership position. And ultimately (and almost oddly) they helped do a major (downward) reset of the land values in the Village, which has helped “the numbers” in this new cycle. 

Ultimately, the Intrawest and Starwood eras brought no real sustained prosperity to Mammoth. The Alterra ownership structure appears to have a much longer-term vision. And the financial mojo to keep it going. The Limelight is the most obvious example of this. The downstream investors, both large and small, clearly see this. It is evident throughout the region.

What most of today’s Mammoth enthusiasts don’t realize is that Mammoth had this flow of capital back in the 1970’s. Historically, it seems like an odd time for such prosperity—high interest rates and high inflation (and the dreaded stagflation). But look around Mammoth and you will see all sorts of evidence from that era. Thousands of condominiums were built and they evolved from weekend ski crash pads to “resort” properties in a place called Snowcreek. Many of the commercial centers we frequent today were built in the twilight of that era. Dave McCoy and the major developers in town were championing gondolas to move people all around town. The Lodestar master plan (the Sierra Star golf course and surrounds) was in process to have a narrow gauge railroad servicing the entire property, much like a Disney property. Celebrities actually came to Mammoth back then. And the local real estate values were as high as any ski resort in North America. 

That prosperity and flow of capital crashed, the result of the early 1980’s recessions, earthquakes, volcano scares (thanks Mt. St Helens) and more. The first twenty years I lived in Mammoth the “USGS” was a dirty word. They were the enemy. Back then, many of the remaining local residents blamed the government agency for the economic destruction of Mammoth’s success from that era. There was tremendous bitterness. Any significant flow of capital dried up for almost two decades.

Today, the advent of pre-sale season passes is a godsend for the industry’s cash flow. But back in the 1980’s is was quite different. It was a big deal around town if “Dave got the bank loan” to build a new lift. The drought years of the late 1980’s destroyed all of that. There was no snowmaking and people didn’t buy a season pass until the conditions warranted it (the cost for a ski pass back then was basically the same as today, except it was in 1990 dollars). Cheap ski passes have been great for the flow of capital.

Local real estate development was almost non-existent for years during the subsequent post-boom period. Tom Dempsey felt compelled to start construction on Snowcreek Phase IV to keep the development momentum going and keep his crew together. Some of it had to be framed twice because someone took a match to it. That was persistence. John Hooper risked building new, small homes that local residents might be able to afford and maybe a second-homeowner or two might like. He also risked building fourplexes and various multi-unit properties to house local residents (and still do today). The buyer pool was small and skittish. At least he knew he could probably service the debt with rents until he found a buyer. But the level of cash flow in the community through that era was dismal. That’s why today’s conditions are so profound.                   

This flow of capital into Mammoth (and Mono County) highlights another discussion that is the ire of many in the community. It is a common complaint from members of the public that the Mammoth Town Council has been too easy on major real estate developers for workforce housing mitigations. The planners call them exactions. The developers call them extractions. These are the up front, agreed upon contributions to housing made as part of the development approvals. They can be in the form of cash or actual units (or land or anything really). While the the requirements are part of the municipal code, they are always subject to negotiation. And the developers always negotiate far less than what is “required.” It just goes with the territory. 

The decision makers ultimately have to bend the rules to incentivize the development. Members of the public make it an issue for years. They point out that projects like the Limelight will employ X amount of people and their housing mitigations costs will cover, maybe, a half dozen of these employees. This has been a hot topic in Mammoth for years. The older, indignant members of the public claim the Council “sold out.” Those without adequate housing claim it is the root of their hardship. There are always the graphs and spreadsheets to substantiate their claims.

So here is where we are today. The available workforce housing grant dollars and tax incentives continue to diminish. Meanwhile the flow of capital is at an all-time high, and this includes incredible government revenues from all of the taxes, from property tax, bed tax (TOT), TBID, sales tax, and even the taxes everyone pays on their electric bill so the Town can justify buying faux climbing walls. 

These excess tax revenues, because of this community prosperity, need to be increasingly allocated to workforce housing. They have been recently, and this needs to continue. And maybe even more so. And this includes the County. The property tax from the Limelight alone should be able to purchase or develop several units every year (assuming it is done prudently). The members of the public who complain about the inadequate housing mitigations on the front end now need to be proactive to make sure the housing is funded here on the back end. This is one of the beauties of this new flow of capital. 

And now the timing is even more important. The proposed “missing middle” housing, the middle income housing for which there has never really been any subsidies, is coming in the near future at The Parcel (and maybe other locations). The Town needs to be a substantial financial partner in its development. Some of the pet projects may need to go by the wayside. The demand for the missing middle workforce housing has been neglected for decades. And the demand has never been higher. The strong flow of capital and sound decision making from our leaders can now make it happen. That is, if the public pays attention.

Thanks to those who we remember this Memorial Day.