Cypress Mountain lease to be sold for second time in two years

Cypress Mountain owner Och-Ziff Capital Management Group LLC bought the mountain's lease as part of a package of 14 ski resorts last year | Cypress Mountain

Michigan’s Boyne Resorts plans to buy a lease for B.C.’s Cypress Mountain as part of a deal that includes purchases of five other North American ski resorts and a chairlift attraction for an undisclosed amount from a branch of hedge fund Och-Ziff Capital Management Group LLC known as Ski Resort Holdings LLC.

Boyne has operated Cypress’ business for years as part of a sublease agreement and it expects its new transaction to close later this year.

If the deal closes, it will be the second time in two years that the B.C. government lease for Cypress Mountain has changed hands.

Business in Vancouver reported last year that CNL Financial Group sold all 14 of its ski resorts, including a lease from the B.C. government for most of the 240 hectares of skiable terrain at Cypress Mountain, to Och-Ziff for US$374.5 million.

That transaction came after CNL divested many other assets and was driven by CNL wanting to provide liquidity for shareholders.

Bobby Swain, who was president and general manager at Cypress for 33 years before retiring last year, told BIV at the time that the sublease that Boyne Resorts uses to operate Cypress Mountain simply changed hands and Boyne’s rent cheques would be sent to Och-Ziff instead of CNL.

The latest transaction, if it completes, would mean that Boyne would no longer have to send those cheques to any lease holder.

“Our intention all along has been to regain and acquire ownership of these resorts,” said Stephen Kircher, president and CEO of Boyne Resorts.

“This transaction therefore poses no business interruption or integration risk. This opportunity now at hand will enable us to accelerate and fine tune the execution of our reinvestment plans for these spectacular properties, which will boost our competitive advantages and support our focus on continuous enhancement of the guest experience.”

In late 2016, when Vail Resorts Inc. (NYSE:MTN) spent US$1.4 billion to buy Whistler Blackcomb Holdings Inc., the prize asset was also a lease, not privately held land. 

Vail owns a lease from the B.C. government for more than 8,000 acres of skiable terrain at Whistler and Blackcomb mountains.

In contrast to those two leasehold transactions for skiable terrain at B.C. ski resorts, the $200 million pact to buy Grouse Mountain Resort in July 2017 was for 1,200 acres of privately held land.

In that transaction, a Vancouver-based firm that is more than 60% Canadian-owned purchased the mountain from the McLaughlin family, which had owned the mountain for decades. Some investment in the new ownership group for the mountain, known as GM Resorts LP, came from China Minsheng Investment Group, although the consortium did not reveal how much.

The other resorts where Boyne, the third-largest resort operator in North America, purchased either leases or land last week were:

•Brighton Resort in Big Cottonwood Canyon near Salt Lake City, Utah;

•Gatlinburg Sky Lift in Gatlinburg, Tennessee;

•Loon Mountain in New Hampshire;

•Sugarloaf and Sunday River resorts in Maine; and

•The Summit at Snoqualmie near Seattle, Washington. •