February 24th, 2010
01:35 AM GMT
As if the Olympic games weren't drama enough! Now we can mix in the potential foreclosure of a world class ski resort. The irony is almost painful: Whistler Blackcomb on the verge of foreclosure, at the height of its visibility to the world.
Chasing this story is a tough one because the parent company, Intrawest, will not confirm the reports. Financial restructuring negotiations are complex, legal affairs, so traditionally, the parties are obliged not to speak publicly until they have a resolution. But Intrawest has recently sold some of its other ski resorts including at least one in the United States.
For now, Intrawest will only say that "serious discussions with Intrawest's lenders are ongoing regarding refinancing and the Company continues to operate business as usual." That's all well and good, but the company did miss a payment last year on a 1.4 billion dollar loan. Unconfirmed reports this week suggest that a foreclosure auction could be just days away-- possibly before the games are done.
No one close to the situation expects a resort the size and caliber of Whislter Blackcomb to close down, with or without bankruptcy. Vancouver's Mayor, Gregor Robertson, told me in an interview on World Business Today, that "something is going to happen with Whistler." He won't say, or doesn't know exactly what, but everyone seems to know something disruptive is coming.
The town of Whistler itself has already wrestled with significant tax increases, necessary in part, because of the financial burden of hosting the Olympics. The Mayor there sent me a statement saying, "discussions with Intrawest lenders are ongoing and while we continue to follow the situation closely, we remain confident in the fact that Whistler Blackcomb is North America's number one ski resort and with over two million visitors a year it's not going anywhere."
In other words, even if the talks fail and the resort is sold, it won't be hard to find a buyer, and the region's largest employer will continue to provide jobs and amazing ski experiences for its visitors. It's the kind of optimism you might expect from public officials in the midst of such a grand event.
But the dollars and cents of these games may be as much a part of their legacy as the competition itself. Already dubbed "The Recession Games," organizers say sponsorship is down, and revenues have been lost because of cancelled tickets and crazy weather.
When Vancouver bid for the games more than a decade ago, the estimated cost of staging the games was less than a billion dollars. The actual cost, according to Mayor Robertson, will be "several billion," and some analysts say 8 billion would not be out of the question.
Robertson is confident there will be lasting economic benefits down the road, but admits the immediate price tag is huge. For years, people will debate the merits and the legacy of the 2010 Olympic games, but for now, the potential foreclosure of their premier venue seems to say it all.
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