A new report [LINK] released yesterday by the non-profit citizens’ group Catskill Heritage Alliance (CHA) warns of the need for more due diligence, public scrutiny and transparency around a proposal to transfer the operation of the Belleayre Mountain Ski Center (BMSC) from the NYS Department of Environmental Conservation (DEC) to a quasi-public State authority. One such entity, the Olympic Regional Development Authority (ORDA), manages the Gore and Whiteface Adirondack ski resorts. BMSC, a public asset in the New York State Forest Preserve, has been managed by New York's Department of Environmental Conservation (DEC) since 1950.Members of the Spending and Government Efficiency (SAGE) Commission, appointed by Governor Cuomo last month, are considering the ORDA proposal now, and a decision is said to be imminent. A report in The Press-Republican newspaper yesterday quoted ORDA board member Serge Lussi as saying, "it is not in this year's (ORDA) budget, but there is a possibility that ORDA will be operating Belleayre this winter." Yesterday WAMC reported that State Senator John Bonacic "seemed to believe it was more than just a recommendation. He says in all likelihood, ORDA will run Belleayre this winter. He says they are working out details of legislation that would need to be approved before the end of the legislative session." CHA says such a presumptive, fast-track decision would be much too fast, lack key information, cut the public out of the process, be unwarranted by currently available facts, and could end up harming State finances and the public interest. The new report commissioned by CHA finds that placing BMSC under an authority such as ORDA will not necessarily place the ski center on a sound financial footing, but rather could create a backdoor to convey even larger State subsidies to the ski center, and to the controversial Belleayre Resort luxury real estate development project proposed by private developer Crossroads LLC.
CHA obtained a recent analysis by the Catskill Watershed Corporation (CWC) that considered restructuring options for BMSC, which in its pro forma claimed the ski center lost $1.6 million in 2010. The CWC analysis said BMSC needed "the nimbleness of private enterprise" to survive and recommended an ORDA-like authority structure.
But the CHA report, written by Michael Siegel of Public and Environmental Finance Associates, a Washington, DC consulting firm, studied the CWC analysis and concluded that the future of both BMSC and the Route 28 corridor's futures would be best secured through continued DEC management.
Siegel shows that BMSC's losses can be eliminated by administrative changes that would not require transfer to an authority. The CWC's own analysis indicates that the ski center may need only an additional $4.40 to $6 per skier to break even. These are efficiencies BMSC could easily find without restructuring, using utility-type cost-of-service principles and without further cutting wages or employment. Moreover, the CWC analysis did not take into account certain new costs that an authority would impose, such as staffing, management, insurance, marketing, audits and legal.The CHA report finds that an authority structure such as ORDA would not necessarily make Belleayre “nimble” like a private enterprise, and that its only intrinsic advantage over a State agency such as DEC was its ability to escape State pay scales to cut wages and jobs. Moreover, ORDA management would not eliminate the need for continuing State subsidies. ORDA continues to rely heavily on State appropriations to operate the Gore and Whiteface ski areas.
An authority structure such as ORDA could also pose new and costly risks to the State, the CHA report points out. An authority could form a public-private partnership with Crossroads. This would enable Crossroads to take advantage of the authority's ability to issue revenue bonds for some Resort-related capital improvements that would benefit the private developer Crossroads. Should the BMSC or the Resort underperform in the future, it could place the ski center at risk and trigger a costly State bailout.
It was announced in January 2011 that the CWC had hired attorney Dan Ruzow as outside counsel to help prepare its analysis of operational changes to the BMSC. Ruzow represents the private developer Crossroads LLC and its proposed Belleayre Resort. Yet the CWC analysis made no direct mention of the Resort project at all, nor did it mention Ruzow or his relationship with both Crossroads and the CWC.
Considering these and other gaps in the CWC analysis, CHA believes it should not be used as a basis for making decisions about the status of BMSC. Rather CHA calls for sound, independent analysis and greater transparency and public participation in deciding how this important public resource will be managed.
In particular, the SAGE Commission needs and deserves more complete information on which to base its decision. Many relevant questions remain. Is an authority structure even tenable under the Unit Management Plan for Belleayre? Would an authority’s bonding power help finance the private Belleayre Resort at State expense, at a time when DEC and other agencies are getting cut? Would infrastructure that Crossroads in its SDEIS (now under review) says it will pay for be renegotiated once an authority structure was in place?
“We don’t know, and we need to know,” said CHA chairman Roger Wall. “We have to take this idea of transferring BMSC to an authority off the fast track and subject it to rigorous examination. There are lots of considerations here, and other options that would secure the future of both the ski center and the Route 28 corridor that don't involve the costs and risks of an authority. We might do it by keeping DEC management or transferring BMSC to the Office of Parks and Recreation. But there is no reason to leap into ORDA management when Resort advocates are supporting it and the data isn’t. The issue needs much more thorough study and open public debate."
NOTE TO EDITORS AND PRODUCERS: CHA members and spokespeople are available for interviews on request. Please contact Roger Wall, email@example.com, 646-584-1690.
Public input vital to Belleayre plans
Amid the news reports and a flurry of letters about ways to “save” Belleayre Mountain Ski Center, we’d like to urge that we all remember what it is we are saving. Belleayre has a particular value to the 150,000 skiers it serves each season--probably more than that this season--to the region, and to our local community. It offers a unique culture that both sets it apart from Hunter, Plattekill , and Windham and makes it a perfect complement to those facilities.
Belleayre is the family-oriented ski center of the Catskills, the training ground for the next generation of skiers, the ski terrain that has something for everyone, the place with the friendly atmosphere and sense of community.
Above all, it is the public ski center, a part of our state Forest Preserve, mandated by our state constitution to remain “forever wild.” A recreational mecca funded by all the citizens of New York, it also serves as an engine of commerce for local and regional businesses and individuals, drawing visitors while taking care to preserve the Catskill ecosystems and viewsheds that make us a destination in the first place.
Any talk of “saving” Belleayre needs to protect these unique characteristics. And any talk of what to do with this public asset must include public input.
Chairman, Catskill Heritage Alliance
January 26, 2011, Catskill Mountain News
Belleayre Can Stand on Its Own
An Open letter to the Governor and Governor-Elect
What is the Belleayre Mountain Ski Center? A successful, family-oriented ski area, with a reputation for varied terrain and plentiful snow. On many weekends and holidays it’s so popular that you can barely get a ski tip in the door if you arrive much past the first run of the day. Local residents work there. Local businesses provide goods and services to the workers and skiers and make money as a result.
Belleayre is part of a system--personal, community, regional--that works. Plans to dismantle roughly 80% of its workforce (45-48 positions) through job eliminations, conversions to seasonal work, and offers of transfers out of the area will break this system. Extended unemployment benefits will offer scant compensation.
The depressed economy, reduced tax revenues, and lack of confidence in government at all levels has created an austerity hysteria throughout our nation. Government must be cut for the economy to recover is the slogan, even though prominent economists point out that this belief will likely lead to greater unemployment and a persistent recession.
Belleayre is a painful, local example of this trend to gut municipal workforces of skilled and seasoned employees and to put established infrastructure at risk.
The state government needs to appreciate Belleayre for what it is: a source of good local jobs and a driver of the region’s winter tourism-based economy. Free Belleayre from misguided austerity prescriptions. Give up fantasies about “improving” it through privatization or a link with prospective real estate development. Let it expand in its own Belleayre-centric way. Belleayre does, and can, stand on its own.
If the state thinks Belleayre is a losing proposition, prove it. Put the budgetary cards on the table so the public can see the hard data and participate in steps to keep it a public, sustainable ski center that’s a multiplier for business activity in the region.
Chairman, Catskill Heritage Alliance
LETTER: Put the proposal to rest
Published: Thursday, November 04, 2010 Kingston Freeman
The Belleayre Resort’s backers contend that the project isn’t dead yet, but it should be. By now it is high time for this 11-year-old resort proposal to die.
After so many years of cynical and untransparent maneuvering, continually shifting the goal posts and changing scope and design, making unsupported and wildly counterfactual claims about environmental and economic impacts, while failing to show a workable business plan, bypassing SEQRA requirements and failing to file its Environmental Impact Statement while continuing to lobby for state subsidies, the developer’s luxury resort proposal remains way too big, too high-end, and too high up the mountain.
It has already taken up too much oxygen. It has effectively blocked needed improvements to the Belleayre Ski Center by erroneously insisting the two projects - one for ordinary citizens to enjoy a public resource, the other an exclusive boondoggle for mythical millionaires -- are one and the same. The resort isn’t tied to hamlet life and adds nothing to local efforts to revitalize main streets or improve the state Route 28 scenic byway application. On the contrary, it detracts from them and from our tourism economy by threatening serious environmental and local economic harm.
It will cost municipalities more in services than it will ever pay in taxes, so would raise our taxes, and probably has already cost us federal stimulus dollars. Luxury resort economics have tanked, comparable projects are bankrupt, and there are no studies indicating the Belleayre Resort can work. Without state and local subsidies, and without competing against existing local businesses, it probably can’t even stay open, let alone create new jobs.
So why keep trying to build it after all these years? A judge has ruled that the Agreement-in-Principle the resort developer struck with then Gov. Spitzer was not a valid contract, and that should be that. Resort backers say they “expect to reintroduce the project” yet again in the next few months. We say, after 11 years, a few more months won’t overcome the fundamental flaws of this unworkable project. We’ll continue to fight it no matter how many times it comes back from the dead.
Boondoggle in the Catskills
By Richard Schaedle
Published: 01:00†a.m., Friday, June 11, 2010
After weeks of controversy, Gov. David Paterson and the state Legislature finally decided to fund the reopening a number of state parks and historic sites last month with money from the state Environmental Protection Fund. Even though the fund is supposed to be a lock box devoted to buying sensitive land, recycling and similar projects, there is precedent for doing†this.
Using the money for parks served the public interest and enhanced environmental access, so it was an acceptable compromise. But the same can't be said of another EPF proposal in the news: using the fund to buy 1,200 Catskill mountaintop acres at a premium from developer Dean Gitter.
Gitter's asking price is coincidentally the same amount that Governor Paterson originally sought to save by closing 55 parks and historic sites -- $6.3 million. The sale would be a sweetener for a contentious deal to allow Gitter to build a luxury ski resort near the Belleayre Ski Center. The price is $1.4 million above market value and state Comptroller Thomas DiNapoli rightly refuses to pay it. But negotiations continue and Gitter vows to "persevere" and complete the sale, which would give him capital he needs to finance the†resort.
It would be a supreme irony if EPF money became Gitter's war chest to build a resort accessible only to the wealthy, while there is barely enough money to let taxpayers use public parks that belong to them. Our taxes are for things like parks and preservation, not greasing speculative private real estate†deals.
The steep slope parcel in question is virtually undevelopable -- not a high priority for the state's preservation dollars, since the land will remain unbuilt in any†case.
The point of pushing for the state to buy it now is to finance building the resort, and that, the Catskill Heritage Alliance argues, could cause environmental damage -- sensitive habitat loss, steep slope erosion, runoff, flooding, blasting, a scarred viewshed and other†impacts.
It would also likely harm the regional economy. The comptroller's office recently found that Gitter had failed to provide adequate justification for his assertion that the resort was "a priority" for the Catskill environment and†economy.
In 2006, then-Comptroller Alan Hevesi wrote that Gitter's proposal "understates the potential environmental impacts and economic risks of the project" because of "faulty assumptions regarding profitability and comparable developments in other areas." Hevesi also warned it could trigger huge taxpayer costs by polluting the New York City water†supply.
In 2008, U.S. Rep. Maurice Hinchey. D-Saugerties, said the project would benefit only "the investors and a few†others."
Since then, ski resort economics have tanked. If it were built, the resort would cannibalize customers from existing local businesses, and, in the alliance's view, would likely cost more in municipal services than it paid in†taxes.
There's nothing wrong with the state eventually paying a fair price to give the public access to Gitter's mountaintop land, currently posted against trespassers. But not at a premium price, and not during the budget†crisis.
The only reason to consider putting the purchase through now is to finance the resort, which is inimical to the goals of the Environmental Protection†Fund.
It took weeks of high-profile debate and laserlike public scrutiny to resolve the parks funding†issue.
Now that that's done, let's hope that this other controversial use of EPF money doesn't fly beneath the†radar.
Richard Schaedle is chairman of the Catskill Heritage Alliance, a grassroots organization (http://www. catskillheritage.org.)
Embargoed until February 18, 2010, 12:00pm
Contact: Stephen Kent, firstname.lastname@example.org, 914-589-5988LATEST ITERATION OF BELLEAYRE RESORT PROPOSAL STILL THREATENS THE ECONOMY, ENVIRONMENT AND PUBLIC INTEREST
Kingston, New York – February 18, 2010
Members of the Catskill Heritage Alliance (CHA), www.catskillheritage.org, attended today’s Ulster County Chamber of Commerce meeting at which developer Dean Gitter of Crossroads Ventures LLC presented the latest iteration of plans for the Belleayre Resort, a proposed luxury mega-resort amidst some of the most environmentally sensitive land in the Catskills, within the NYC watershed, the Catskill Park and lands protected by the State constitution.
CHA’s position on the current proposal is that it remains too large, too exclusive and too high up.
Over the many years of the project’s history of shifting scope, Crossroads’ assertions about its economic and environmental impact have gone unsubstantiated by data, and meanwhile many large luxury ski resorts – even Whistler-Blackcombe where the Olympics are underway -- are facing foreclosure. Despite Crossroads’ assertions, the project as currently conceived would cause both economic and environmental harm to the region. CHA continues to oppose the proposal and urges the Chamber of Commerce, local and State officials to stop moving forward with the “Agreement in Principle” on the project, until such time as an appropriately scaled plan that protects the environmental and local communities and businesses and serves the public interest is put forward.Vegetative Cover A Fig Leaf for Environmental Harms
Mr. Gitter’s presentation had little new substance in it, and lacked specifics. The chief innovation of the new proposal is the design of the Highmount Spa, which would be partly in-ground with vegetative cover. But that would be no remedy for the many environmental threats the project poses, including very steep slope development, extensive blasting, erosion, runoff, flooding, sensitive habitat loss, density and stress along 49A, a scarred viewshed, light pollution and other impacts. Shifting Proposals, Delays, Lack of Details Causing Harm
“Crossroads’ proposals have been literally all over the place,” said Rich Schaedle, chairman of CHA. “First they planned three golf courses, then two resorts on both sides of Belleayre, then a Catskill style resort on Big Indian, then a tiered underground hotel, then they went to the west side adding houses, then an Adirondack style hotel. The latest one is a hotel built half underground on Highmount, plus Wildacres resort. We can’t even be sure this is the final version until we see final submissions for review.”
“Crossroads’ many iterations of the plan, without specifics, is tactical. It allows them to continually say the specifics are forthcoming, so they avoid detailed review until the last possible minute,” said former CHA chair Susanna Margolis. “That fends off transparency, and secrecy has been the hallmark of this project. It allows them to imply the project has been too long delayed by too many concessions and too much red tape. But they are responsible for the delay, and the real unfairness of it is to the local community. While the Resort process has dragged out, smaller, more appropriate developments that could have helped our region, like expanding the Belleayre Mountain Ski Center (BMSC), were put on hold.”
Belleayre Resort Still Threatens Public Interest / page 2
As CHA has pointed out, Crossroads has insisted on tying improvements to the BMSC to getting approval to the Resort. But the Resort being so inappropriately scaled and sited has complicated review prospects, effectively holding BMSC expansion hostage, which hurts the local economy. It would therefore make sense to separate the Center and the Resort proposals.
Economic Benefits Claims Unsubstantiated, Economic Harm Clearly Predictable
Mr. Gitter’s presentation today stressed job creation and economic benefits of his Resort plans, but these are unsubstantiated claims without hard data, and in fact there is more reason to believe the Resort will be a net loss for the region’s economy.
Even in the much better economic times in which the proposal was advanced, it was very doubtful the Resort could have created many permanent jobs, achieved viable occupancy rates, or attracted visitors without taking them away from other existing local businesses and causing economic damage to businesses and communities along the Route 28 corridor. In 2006, an evaluation of an earlier iteration by the State Comptroller found the Crossroads proposal “understates the potential environmental impacts and economic risks of the project” because of “faulty assumptions regarding profitability and comparable developments in other areas.” It also flagged “a real risk that New York’s taxpayers will end up bearing the cost of filtration systems for the New York City water supply and other major infrastructure improvements.” In January 2008, after the announcement of an “Agreement in Principle” to greenlight the Resort negotiated in secret at the direction of then Governor Eliot Spitzer, Rep. Maurice Hinchey called the project "much too intense," and he refuted Crossroads’ economic benefit claims, saying it would benefit only "the investors and a few others." "I see the billboards where they're talking about 525 jobs," he said. "Those are not real jobs. They're not full-time jobs."
There is even more reason to reject Crossroads’ economic benefit claims since the economic downturn. The proposed Resort’s business case and prospects for obtaining financing have been seriously degraded in the last two years. It currently has no detailed business plan, no valid market study, no commitment from a capable hotel/resort operator or time-share franchisor and no commitment for financing from a credible lender.
In the wake of the recession, second home, fractional ownership, and resort developments are failing or shutting down throughout the U.S. and internationally. Hotel vacancy rates are climbing, local vacancy rates are high, and comparable projects elsewhere are in default or out of compliance with their financing agreements. Intrawest, which owns Vancouver Whistler-Blackcombe Resort where Olympic competition is underway, as well as Stratton and Steamboat, is in financial trouble due to failure of its slope-side real estate portfolio. It must make a missed December payment of over $500 million by tomorrow or face foreclosure. On Tuesday, East West Resort Development, owner of various luxury ski resorts, filed for bankruptcy.
Credible projections call for a stagnant or slow economic recovery along with constrained credit and income growth for the next decade. Others consider such projections to be optimistic. In these conditions, the Belleayre Resort will not attract large numbers of targeted luxury market visitors from outside the region, so the project will be forced to compete with local existing businesses for market share, with potentially devastating consequences.
It would also hurt local investment and real estate values. The mega-resort would create a vast over-supply of potentially developable hotel/resort units relative to current and prospective demand. Even the potential for its many units to come onto the market (even after bankruptcy or restructuring) will tend to dissuade current property owners and others from investing in the region. The excessively large supply of permitted, but unbuilt, hotel-style lodging units would create a much higher level of market risk for others considering more appropriate-scale investments in the region's lodging and tourism sector.
In current and prospective market conditions and amid New York’s fiscal crisis, the burden is on Crossroads to present convincing evidence that it can be viable, create a net gain in jobs, avoid economic damage, and create value for the local economy that justifies the high costs of State subsidies and municipal services budgets it will take up, and which are needed for schools, hospitals and more sustainable forms of economic development.
Belleayre Resort Still Threatens Public Interest / page 3
Diversion of Public Funds
The proposal requires diversion of scarce State funds to acquire 1,200 acres of environmentally sensitive land Crossroads had previously proposed for intensive development. Protecting forestland is a good thing, but self-serving in this case. The only threat to that acreage was Crossroads’ earlier proposal, which was never realistic. There is no market for the intense development Crossroads proposed, and the acreage could not be intensively developed without discretionary local and State regulatory approvals.
For these reasons, approving the Crossroads proposal is not in the public interest. Moving forward with the review and permitting process, the Supplementary Draft Environmental Impact Statement (SDEIS), Unit Management Plan (UMP) and local zoning changes is inadvisable at this time. We believe doing so could cause a loss of jobs and tax revenue, and that unless and until Crossroads can prove otherwise, the project should be stopped and rethought.
CHA recommends that NYSDEC and other involved agencies formally discontinue taking any further action related to implementing the Agreement in Principle (AIP) until such time as the developer obtains and submits:
• a recent, valid, and verifiable market study and financial analysis consistent with its business plan that corrects the deficiencies noted in the Review prepared by the Office of the State Comptroller;
• a valid letter of commitment for financing from a credible lender specifying terms
• a valid letter of commitment from a nationally-recognized resort/hotel franchisor.
Failing that, assuming the review process does go forward, CHA recommends that the SDEIS and UMP for the project fully and specifically address, analyze and evaluate the issues raised above, as well as the many deficiencies noted by the Office of the State Comptroller's Review of 2006, and the issues that were earlier referred for further adjudication.
CHA also recommends that the State DEC move promptly with implementing proposed uncontroversial improvements to the BMSC that are not related to the proposed Resort. Those improvements will bolster the local economy while protecting the threatened Esopus Creek and Ashokan Reservoir, and supporting businesses and communities along Route 28.
As currently proposed the Resort is not in the public interest. But an appropriately scaled, environmentally sensitive resort that complements the region’s other communities and is consistent with the scale of development elsewhere in the Route 28 corridor, for example a base area development of 100-200 rooms (in addition to other proposed improvements to the BMSC) would serve the public interest and would be welcome. CHA would urge the Chamber of Commerce to join with us to encourage Crossroads, NYSDEC and other signatories to the AIP in this direction.
The Catskill Heritage Alliance (CHA), www.catskillheritage.org, is a grassroots organization dedicated to preserving the harmony between the villages of the central Catskills and the surrounding wilderness through community revitalization and open space conservation.
NOTE TO EDITORS AND PRODUCERS: CHA members and spokespeople are available for interviews on request. To arrange an interview, please contact Stephen Kent, email@example.com, 914-589-5988
To the editor:
Recent letters accusing the Catskill Heritage Alliance (CHA) of personal attacks on the Belleayre Mountain Ski Center and its employees, and accusing us of trying to torpedo stimulus funds for the Ski Center are factually wrong on all counts. Not only do we support the Ski Center and applaud the key role it plays in the community, we’re also on record that the Ski Center should be expanded to its full complement under the 2002 draft Unit Management Plan (UMP).
We did not and do not oppose stimulus funding for the Ski Center; we simply flagged suspicious entries on the list of stimulus requests asking for $62 million to expand the publicly owned Belleayre Ski Center, “and with it, the development of the privately owned Belleayre Resort.” Using stimulus funding needed for infrastructure and economic development for private luxury ski condos clearly would have been an abuse of the program.
It is not CHA’s work (as if we had such power – we can’t even get in to see DEC staff or obtain documents through our FOIL requests!) that torpedoed stimulus funding and continues to bedevil the Ski Center expansion we all want to see. It’s the inappropriate, damaging, and apparently deliberate strategy of blurring the lines between the public Ski Center and the private Resort, so that the private developer can lay claim to public aid in his bid to build a highly inappropriate project on sensitive, steep-slope forestland.
This situation came about because the 2002 UMP was never implemented, as it should have been, and was later discarded as the developer’s plans for the private Resort evolved. In 2007, an Agreement in Principle (AIP) was rammed through by then-Governor Spitzer calling for a new UMP requiring the state to purchase the old Highmount Ski Center and create ski-in ski-out capabilities for the private luxury Resort. We are still waiting for that new UMP today, but the premises for it laid out in the AIP are so confused, linking the public Ski Center and the private Resort so inextricably, that even experts have trouble telling where one ends and the other begins. That confusion is calculated to help the developer get the Resort he wants, but it hurts the rest of us.
So far, derailing the 2002 UMP and adopting the AIP have held up Ski Center expansion for seven years. The murky, joined-at-the-hip approach of expanding the Ski Center “and with it” building the Resort effectively disqualified the Center from stimulus funding it might otherwise have gotten. Those are both losses for the public interest, and more will accrue until the Center and Resort projects are de-linked.
No one disputes that the Ski Center and the people who work there are pillars of this community. The best way to support them and enhance the Center’s role as an economic engine is to cut its expansion loose from the burden of an inappropriate private project that threatens to enrich the developer at the expense of our local economy and environment.
Chairman, Catskill Heritage Alliance
24 Birch Creek Road
Pine Hill NY 12465