A system of justice is valuable for the many, many conflicts that are resolved out of court. And — for those disputes that cannot be settled without litigation — courts work best when they rely on clear principles of law and precedent.
In a blockbuster case involving the fate of Park City Mountain Resort, Judge Ryan Harris of Utah’s 3rd Judicial District said last week that the ski resort simply missed its 2011 deadline for renewing its lease. In failing to renew, the property on the mountain reverted to landowner Talisker Corp.
Talisker also owns the adjacent Canyons Resort and last year brought Vail Resorts in to operate Canyons and — potentially — the Park City resort as well.
Harris’ 82-page ruling lays out the facts of the 2011 blunder and well-established Utah property law in such a way that his conclusion is inescapable: by failing to renew its lease, Park City Mountain Resort forfeited the right to an unusually attractive deal. It paid annual rent of just $150,000 a year. By contrast, Vail Resorts paid Talisker $25 million, plus a percentage of revenue, to lease Canyons.
The lease on the land operated by Park City Mountain Resort began in 1971 and was renewed in 1991. Both landlord and tenant Powdr Corp., which runs the ski area, expected that the lease would be renewed in 2011 — and likely until 2051. Yet no one at Powdr actually took the necessary step to renew that lease.
Powdr Corp. counters that the company has invested more than $100 million into the facilities that make Park City Mountain Resorts. Many of those investments were made after its lease officially expired. Plus, Powdr still owns the land on which the base operations and best access to the resort reside.
It can seem deeply dissatisfying when ostensibly big decisions, like the fate of a mountain, depend on “technicalities” like providing notice of intent to renew.
But to make an exception from the clear rules of property law would do vast damage to principles of justice.
“Creation of an exception in cases involving large, complex, multi-party transactions would relieve sophisticated parties — precisely the ones who have at their disposal top-flight legal advice — from the consequences of their own negligence in failing to adhere to their own carefully negotiated documents, while leaving apartment lessees and small storefront businesses without a similar avenue for relief,” Judge Harris wrote. “Viewed from a long-term perspective, creation of this sort of exception, in the name of equity, would be decidedly inequitable.”
After the decision, Powdr’s CEO John Cumming said that Vail Resorts “cannot possibly operate a resort on the leased property. They do not own the adjacent lands and facilities that are essential for ski operations to take place. And they are not for sale.”
Such a position is well within the rights of Powdr Corp. The loss its negligence has wrought is profound. But the justness and comprehensiveness of Harris’ well-reasoned decision should now prod the parties out of the courtroom and into serious and productive business conversations that will meet the best interests of Park City residents, and of those who come to Utah to ski.
Utah’s skiers, Utah’s tourists, the town of Park City and those who work in the ski industry all deserve better than the further continuation of a scorched-earth, three-year legal battle. The next stage in the future of the mountain needs to be done around a well-mediated negotiating table. Now that the legal rights are clear, we believe that the parties should now work to accommodate the best interest of the skiers, snowboarders and ancillary Park City businesses in a way that will help bring as early an opening and as late a closing as possible to the 2014-2015 season at Park City Mountain Resort.