Well, this will warm the hearts of Vermont’s big ski resort owners and perhaps mollify budget-cutting legislators. A deal is now under consideration by the Shumlin administration to “sell” state land which is currently under long-term lease to ski resorts. This potential deal was uncovered by the investigative team at the Burlington Free Press.
The FreeP reports that the plan is the brainchild of former Douglas administration official Mike Smith (current interim dean for land sales and divestment at Burlington College). The plan, as outlined by Smith for Governor Shumlin, would, they say, raise hundreds of millions of dollars (one-time only) for Vermont.
Earlier, Smith had meetings with Vermont Ski Area Association’s Vin Bogataj to gain input and ensure their enthusiastic “buy-in.” At the time Smith pitched his approach, the Governor had just received the State Auditor’s report on antiquated ski-resort leases of state-owned land.
Currently 8,500 acres of public land are under a variety of long-term leases to ski resorts. Payment arrangements are based on a percentage of lift ticket sales. In recent years other sources of income beside ticket sales have been added to the resorts and remain untapped by the state.
The feasibility of renegotiating the terms has been considered to take into account the increased worth of the state lands to the resorts. Revisiting the decades-old agreements as a new revenue source was roundly panned by the Vermont Ski Area Association (VSAA) and then quietly abandoned by the Shumlin administration as politically impractical. The abandoned health care initiative and his resulting popularity decline may have contibuted to the Governor's choice, or as some observers speculate, he may just always have been like this.
According to leaked terms of the new plan, Vermont will “sell” the state forest land for a fixed one-time cash payment and permanently void the old leases. The Pree Fress retorts:
A source in the Shumlin administration said the ski resort purchaser will ‘own’ the land as a kind of trust hybrid known as a Reverse Trust, similar to corporate legally non-binding contracts and common non-legal binding misunderstandings. Said the source “It’s a win, win, the state gets a onetime payment and the resorts get ownership of thousands of acres of public land to use as their own. It’s a common sense decision … the Vermont way.” [added emphasis]
State officials note tough limits on land uses will be part of the deal, and forest development will be strictly limited with eye on preservation. Restaurants, water parks, hotels/condominiums, casinos and road building (on a case by case basis) will be confined to areas less than 6,000 ft in elevation.
A Reverse Trust (ARGAL /BARGL): the Vermont Way.
Significantly, Vermont will retain an element of legal involvement -ownership can revert back to the state. The provision included at the insistence of the VSAA is a complicated legal arrangement called a Reverse Trust.
The Reverse Trust procedure occurs in the event a calamitous event or catastrophic liability is suffered by a ski resort. It automatically triggers the land (and any associated liability) “reverting” through a buy-back mechanism the State of Vermont is responsible for. This buy back feature “fixes” a guaranteed return to the resorts of their initial investment plus 10 perecnt.If any event (natural or economic) significantly degrades or otherwise permanently debilitates the property’s worth then the “fix” kicks in.
This agreement is similar in structure to A Retained Guaranteed Agreement of Liability (ARGAL) and the more familiar Business Agreement on Retained Guaranteed Liability (BARGL)
The VSAA ‘s Vin Bogataj is very please by the plan
“The proposed state forest sale will not only provide a welcome level of certainty to the ski industry but, free up a portion of yearly lift ticket sales now paid to the state, which now acts as little more than an unnecessary tax burden. The resulting boost in revenue will help VSAA member resorts continue to provide the kind of seasonal minimum wage service jobs Vermonters expect from us.”[ italics added to attract eyes]
In addition one ski resort owner reported he received informal assurances from high level state office holders that a portion of the forest land sale money will be used to improve winter time highway plowing and expand overall road capacity to several remote mountain locations
A tenative target date for enacting this is currently agreed to be by April 1st 2016!