Mike Satre (left), chair of Eaglecrest Ski Area’s board of directors, talks about the resort’s plans with Mayor Beth Weldon and Juneau Assembly Member Neil Steininger following an Assembly Committee of the Whole meeting on Monday night at City Hall. (Mark Sabbatini / Juneau Empire)

Mike Satre (left), chair of Eaglecrest Ski Area’s board of directors, talks about the resort’s plans with Mayor Beth Weldon and Juneau Assembly Member Neil Steininger following an Assembly Committee of the Whole meeting on Monday night at City Hall. (Mark Sabbatini / Juneau Empire)

Assembly members say they’re willing to loan Eaglecrest money until gondola is ready

Report criticizing ski area’s finances and maintenance also contains enough promise for city leaders.

Juneau Assembly members said they’re willing to lend money to Eaglecrest Ski Area until a gondola will supposedly allow the resort to operate at a profit, following the presentation of a controversial financial report by an analyst and rebuttal from Eaglecrest’s board chair Monday night.

The report, in a sense, didn’t alter the big-picture outlook for Assembly members in regards to the 50-year-old city-owned ski area that is suffering major problems with aging equipment and hiring staff. The Assembly over the long term has subsidized about 30% of Eaglecrest’s budget, but that cost has been increasing in recent years as operational problems have worsened and city leaders now have other accelerating costs such as glacial flood prevention to worry about.

However, Mayor Beth Weldon said there might be some willingness to provide grants for some quick key items — referring specifically to the Black Bear chairlift, one of two primary lifts to the top of the mountain, which is closed this season due to mechanical problems.

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“I wouldn’t mind doing something for Black Bear to get that up and running as fast as you can, just because I know season passes are tied to Black Bear,” she said. “A lot of people got season passes after Black Bear opened up and I think you have more ability to make snow on that one.”

“You might consider asking for some things,” Weldon added. “The worst thing we can do is say no, which we will on certain items.”

In turn, Assembly members were presented with a wide range of existing realities and possible scenarios for Eaglecrest’s future by Kirk Duncan, the resort’s general manager for seven years beginning in 2004, who prepared the financial analysis at the request of City and Borough of Juneau leaders. Among the many nuances he referred to were season passes and how sales of them are being affected by more than just lift availability.

“There’s been comments from the Assembly that Eaglecrest should raise prices,” he said. “And I just want to point out that as prices have gone up the number of season passes have gone down. One of the things that’s going to be needed at some point in time is to find out what the users think what the pricing should be. And one of the recommendations could be to do a survey of users.”

Eaglecrest currently has a negative bank balance of about $160,000 and that shortfall could rise to about $900,000 by the end of the fiscal year on June 30, Duncan said. Eaglecrest can legally keep operating even when it is broke since the city will end paying bills that are due from its bank account.

That reality was cited by Assembly Member Neil Steininger, a former state budget analyst, in joining other Assembly members in stating he supports providing additional loans to Eaglecrest, based on findings in Duncan’s report that show the ski area could begin operating at a profit as early as 2028 if the gondola opens in the summer of 2027.

“The negative fund balance is effectively us giving Eaglecrest a loan anyway, so we might as well formalize it and have a little more say in how that money is spent,” he said.

Duncan’s report also states maintenance of lifts and other equipment hasn’t been at an acceptable standard, and may be facing millions of dollars in repairs during the next couple of years, wages aren’t at a competitive level for the industry, and raises questions about the board’s leadership. He also notes Eaglecrest’s future as a winter ski area is facing further duress as warming climates will likely mean shorter seasons.

Salvation, in the eyes of Eaglecrest and many other local officials, is the installation of the used gondola that will make large-scale tourism operations possible during the six-month cruise ship season. Goldbelt Inc., which has provided $10 million for installation costs in exchange for a share of the revenues for at least the first 25 years of operation, is forecasting 150,000 people a year will eventually take tours that include a gondola ride, according to Duncan.

His report — based on 40,000 tourists starting in 2027 and increasing to 125,000 by 2034— includes projections of when the resort could begin operating profitably based on gondola ticket prices of $85 (“aggressive”), $65 (“moderate”) and $45 (“conservative”) per passenger (which Duncan estimates would be $171.50, $145 and $118, respectively, when $35 bus transport cruise line commission fees are added). Goldbelt has stated it expects to charge $85 per ticket, according to Duncan.

If the gondola begins operating in the summer of 2027 Eaglecrest could see a net profit beginning the following year with either $85 or $65 tickets — but the resort’s bank balance would remain in debt two years at the lower price — while it would take until 2036 to operate at a profit with $45 tickets, according to the report.

A joint meeting of Assembly and Eaglecrest leaders is scheduled in early March to further review budget requests for the ski area. Among the details Assembly members said they want to know by then are more exact projections for how much the installing and operating the gondola is expected to cost, as well as additional details about expenses such as employee pay and expected revenues.

“What I’m also interested in seeing, in addition with that request for a loan, is something of a plan that can carry us the rest of the way there (to a gondola) with as few surprises as possible,” Assembly Member Paul Kelly said.

• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.

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