The most immediate benefit of Vail Resorts just-announced acquisition of Kirkwood Resort is skiers and riders looking for a less gentrified experience now have one. 

Passholders at Northstar and Heavenly, the other two Vail Resorts properties around and near Lake Tahoe, as well as those holding Vail Resorts EPIC Pass, can immediately use those passes at Kirkwood. Vail Resorts, based in  Broomfield, Colorado, reportedly acquired Kirkwood for $18 million, pending approval of the U.S. Forest Service which owns the bulk of the land. 

Vail Resorts purchased Heavenly on Lake Tahoe’s South Shore in 2001, and put together a long-term leaseback to operate Northstar-at-Tahoe, owned by CNL Lifetime Properties (a REIT owning many U.S. resorts) in 2010. It is VR’s seventh property, including Vail, Beaver Creek, Breckenridge, and Keystone in Colorado, and the Grand Teton Lodge Company in Jackson Hole, Wyo. Vail Resorts is a publicly traded company on the N.Y. Stock Exchange (NYSE:MTN). 

The major competitor at this stage is Squaw Valley and Alpine Meadows, acquired by KSL Capital (run by former Vail employees) in 2010. JMA, a San Francisco-based company, has been given a permit go-ahead to turn Homewood Resort into a major four-seasons player. It sits across the street from the Lake.

VR subsidiary, RockResorts, a luxury hotel company, manages a number of upscale hotels. VR has been on a spending binge in other directions as well, purchasing Mountain News in 2010, a company that runs the website OnTheSnow, and just recently acquired SkiInfo, a large European-based website. The company also owns a group of retail ski shops.

Different Product 

Kirkwood offers a rather different skiing product from the other two California resorts and attracts a more adventure-seeking demographic of skiers and riders. The resort is about an hour’s drive from South Lake Tahoe over two mountain passes, depending on weather. The snow is generally deeper at Kirkwood as it picked up 800 inches last season alone. 

By comparison, Kirkwood’s SnoCountry.com report (Feb. 22, 2012) lists a powder and packed powder base of 66-75 inches. Heavenly lists a packed powder/variable base of 28-40 inches, while Northstar also lists a packed powder/variable base of 25-32 inches.

Locals note the snow is more consistent and lighter because of the location, and offers one of the best high-alpine experiences in the West. Kirkwood is not known for high-end amenities or retail.

Part of the deal includes the purchase of undeveloped sites at the center of the base area (near Chairs 7 and 9) that are zoned for residential and commercial development. The seller, Mountain Springs Kirkwood, will retain a “participation interest” in the base area parcels and will continue to own the remainder of the real estate development sites. Kirkwood founder Bud Klein died of cancer in May last year.

'Like Opening Day'

Vail Resorts CEO Rob Katz said in a prepared release that the use of Heavenly, Northstar,  and EPIC passes right away makes it “like opening day of a whole new season.”

Kirkwood offers 2,000 feet of vertical drop and more than 2,300 acres of terrain. Much of that terrain is advanced with runs off cornices and cliffs, requiring high-angle grooming. There are also four terrain parks.

The company said, also in a news release, that it intended to retain a Kirkwood-only season pass and daily lift tickets, priced comparably to what it is today. Adult “Premium” season passes are currently $799, but “Midwinter” passes are $299. Adult daily tickets (non-holiday) are $79 at the window.

Vail Resorts says it hopes to close on the deal within a month. The closing will depend on certain conditions, including the transfer of the U.S. Forest Service permit.

Kirkwood has had power problems in the past, including having a plant burn down in January 2010. However, Kirkwood Mountain Public Utility District has been its own entity since last summer and new diesel generators are expected to begin operating in the next few weeks.

Current Kirkwood CEO David Likens moves to the same role at Kirkwood Mountain Deveopment. The mountain operations will be managed, at least temporarily, by Vail Resorts employees Blaise Carrig, co-president of the Mountain Division, and Casey Blann, who runs Mountain Operations at Heavenly. 

What It Means: It seems almost ho-hum these days when Vail Resorts announces another major acquisition during the nation’s economic downturn and struggling recovery, but the pick-up of Kirkwood does indeed offer a different product to Lake Tahoe area vacationers and Northern California locals. It will be interesting to watch the pace of much-needed capital improvements at Kirkwood, which was extraordinarily quick to occur at Northstar. What’s next? Anyone’s guess, and Vail Resorts isn’t telling.