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Park City • $17.5 million That's how much Park City Mountain Resort must post in a bond to continue operating through the coming season the ski resort at the heart of this tourist town.
It was unclear immediately whether PCMR would accept the bond amount, set Friday by 3rd District Judge Ryan Harris.
If PCMR does not post the $17.5 million bond, Talisker Land Holdings Inc. can begin evicting PCMR from2,852 acres of upper mountain ski terrain. That would mean no 2014-15 ski season at PCMR. It also would devastatethe local economy.
John Lund, an attorney for Talisker, issued a statement calling on PCMR to "do right by the Park City community" by posting the bond and ensuring the upcoming season. Any claim PCMR and its owners might make that they can't come up with the money by next week, Lund said, "is foolishness."
Alan Sullivan, lead attorney for PCMR, said he did not know whether the figure would be acceptable to his client. PCMR has one week to post the bond with the court in cash or as asurety bond.
The parties have been in a legal dispute for three years after PCMR missed an April 30, 2011, lease renewal deadline. Earlier this year, Harris ruled in favor of Talisker on key points of the multi-faceted action setting the stage for eviction.
Although PCMR missed the deadline, its attorneys have said they made known to Talisker their wish to extend the lease to at least 2031 and possibly to 2051. PCMR continued to make improvements to the resort during the summer of 2011, they said.
PCMR has vowed to appeal to the Utah Supreme Court Harris' earlier ruling in favor of Talisker. The bond that was the subject of Friday's ruling would allow PCMR to operate the resort for a single year.
Although the parties have been in court-ordered mediation talks, no agreement has been announced. The mediation talks are secret by law.
Park City businesses and residents will remain in a state of high anxiety until PCMR makes its decision on the bond.
Mary Ann Pack, who operates Snowed Inn Sleigh Co. at PCMR's base, said she thought the judge's bond amount was reasonable. "I hope PCMR will post it," she added.
Linda Jager of the Park City Chamber of Commerce and Visitors Bureau said this is the peak time for marketing and her organization is working to counter beliefs Park City won't be open. Whether it's two or three resorts, she emphasized, the town will be open for the season.
Mike Sweeney, who owns property and businesses in Old Town, said he thought the judge "did the best job he could do" setting the bond. "But it won't bring me any relief" until PCMR posts the bond, he added.
The judge said he based the bond amount on an estimated lease for the land of $5 million per year. Harris imposed treble damages that he said were required by Utah law. On top ofthat $15 million he added a 1 percent interest rate and $1 million in attorney fees.
The bond will expire on April 30, 2015. If PCMR wishes to operate the resort the following ski season, it would need to post a bond of $19.5 million, Harris said.
No damages have been established from May 1, 2011, through the present. That will be determined at trial, which may begin later this year. No date has been set.
PCMR owns the acreage and facilities at the base of the resort. Without that, its attorneys argue, the ski area cannot be operated.
Talisker leases the nearby Canyons Resort to Vail Resorts Inc. for $25 million annually. That sum includes the potential for Vail to operate PCMR, according to court filings. Vail has taken a lead role for Talisker in this litigation.
As part of setting a bond, Harris asked PCMR and Talisker/Vail for market-rate figures for an annual lease of the acreage in question.
PCMR came back with a range from $225,000 per year to $1 million.
Talisker/Vail said it was worth $14.8 million per year.
Lund said Talisker would not appeal the judge's bond ruling even though it was well below the company's request.
PCMR, he said, should be able to come up with the $17.5 million because it has "generated over tens of millions in profits over the past three years using Talisker's land without a right to do so.
"And of course, the Cummings themselves have considerable resources," he added, referring to Ian and John Cumming, the father-and-son team who own Powdr Corp., PCMR's Park City-based parent company.
Besides PCMR, Powdr owns seven other resorts around the country. This summer, Ian Cumming also became majority owner in Snowbird Ski & Summer Resort.
Lund said while Talisker and Vail will continue working on a long-term resolution to the dispute, "right now it's time for both parties and everyone else to focus on the upcoming season and making it the best one possible for everyone in Park City."
In 1975, then-Park City Ski area leased the acreage from United Park City Mines for $155,000 annually. In 1991, the lease was amended so that it would run until 2011 with options to extend the lease in 20-year periods to 2051.
Park City Mountain Resort has until Friday to post a $17.5 million bond.