Refunds could liquidate ski area's cash reserves, manager says

Eaglecrest GM says refunds come with 'serious implications'

Eaglecrest pass holders are asking why they won’t receive refunds after a failed winter season, and the ski resort has a response.

 

This year was the “worst snow year in the history of Eaglecrest,” said General Manager Matt Lillard, and based on the last time the ski area offered refunds, the option just isn’t there.

“We’ve been in this general vicinity before,” he said. “It comes with some pretty serious implications.”

Lillard said the ski area took in about $750,000 in pass holder revenue this season. When the ski area offered refunds in the past, those refunds regurgitated between 40 and 75 percent of sales.

“That could be a loss of about $500,000,” he said.

Since Eaglecrest opened in 1976, Juneau has rarely seen a winter quite so warm and with so little white.

Lillard said Eaglecrest last offered refunds after a bad year in 2003. The refunds doled out to customers depleted the ski area’s positive fund balance of $157,000, leaving it about $20,000 in the hole. The negative balance ballooned over the next few years, to almost $900,000 in 2006.

Over the following years, Eaglecrest gained a new general manager, Kirk Duncan (now director of Parks and Recreation), and began a process of building new infrastructure and improving the terrain. Between 2007 and 2010, a new road to the summit was installed, as were the Black Bear and Porcupine chair lifts.

In 2007, Eaglecrest was able to start putting away money for savings again, but it wasn’t until 2014 that the ski area finally saw a positive fund balance.

Juneau had a record snow year in 2012 with about 600 inches of snow at the summit. That year, the visitor population peaked at 56,000. In the 2014-2015 season, only 7,000 skiers visited the slopes.

With about $86,000 in lost revenue this year, the positive fund balance of $92,000 has been nearly depleted. The ski area stayed open as long as possible, but on March 22, the Porcupine Chair was officially closed for the season.

Lillard said although Eaglecrest was only in operation for 40 days on the Porcupine Slope and five days on the upper slopes, about 85 percent of staffing needs were maintained for maintenance and lifts.

“We can’t be waiting for snow and then not be ready when it comes,” he said.

It was not feasible to get rid of seasonal employees and be left without help if the snow forecasts changed, he said.

Even during summer months, Eaglecrest employs about six employees to maintain the trails and ski area in preparation for the winter season. This summer, staff will begin a large-scale trail building program with grant funding. About eight trails will be rejuvenated or built within the next five years.

“The No. 1 desire from residents is more hiking trails,” Lillard said.

Eaglecrest also completed its new Porcupine Lodge this year after securing funding in 2012 through a 1 percent sales tax increase and bond revenue. Lillard expects more snow next year.

If the ski area has to dip into its fund balance again, it could lead to the beginning of another era of debt. Because of that financial history, Lillard said discounts and incentives will be offered to pass holders next year, but refunds are out of the question.

“We fully expect winter to return in 2015-2016,” Lillard told a local Rotary club last week.

• Contact reportr Stephanie Shor at 523-2279 or at stephanie.shor@juneauempire.com.

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