Louis Bacon Tries to Turn Around Taos Ski Valley
Sales at the resort are rising ahead of the hedge fund founder’s planned purchase of the area
Louis Bacon’s purchase and planned renovation of Taos Ski Valley have resulted in a property sales boost. The Trevisanis paid $750,000 for a three-bedroom condo below the ski area’s highest peak.
By CECILIE ROHWEDDER, Wall Street Journal
The season at Taos Ski Valley ended earlier this month, but its real estate is heating up.
Local real-estate agents call it the “Bacon bounce”: Property sales at Taos Ski Valley, a rugged resort with European flair in the mountains of New Mexico, have multiplied since December, when New York hedge fund founder Louis Bacon said he was buying the ski area from a family that has owned it for decades. The deal is raising expectations that long-planned improvements will now happen.
“The announcement gave us the final push,” said Peter Trevisani, who spent weekends at Taos Ski Valley for years before he and his wife Wendy bought a contemporary condominium in a Bavarian-style chalet in February. Now the couple uses the condo for weekends with the children, all avid skiers. They are also hoping the modernization of the resort will make it a good investment.
Louis Bacon Getty Images
The Trevisanis, both managing directors at Thornburg Investment Management in Santa Fe, paid $750,000 for the 1,951-square-foot, three-bedroom condo, which is nestled between fir trees at 10,200 feet. It combines wood, earth tones and vintage ski advertisements with stainless steel and contemporary furniture.
In addition to the condo purchased by the Trevisanis, two more condos in the same development have changed hands since Dec. 13, when Mr. Bacon’s intended purchase was disclosed. All three sold at asking price, one for $765,000—higher than most properties on offer at Taos Ski Valley, although still below the original, pre-downturn price of $1.2 million in 2008, when they were built. In all, 11 homes and eight plots of land have changed hands since Dec. 13, compared with two homes and one piece of land in the same period a year earlier.
“For two weeks after the deal was announced, the phone rang off the hook,” said Keith Dowell, owner of Taos Ski Valley Realty. “It’s quite unusual, especially at this time of the year,” added Jolie Jones, a real-estate agent with Piñon Investments of Taos who sold the units.
The activity comes after a long period of stagnation in the small ski town known for steep chutes, dizzying altitude and grand views across the high desert of northern New Mexico. At the same time, overall vacation home sales have been surging: Earlier this month, the National Association of Realtors said the number of second homes bought for part-time personal use jumped 30% in 2013, the biggest gain in 10 years. The West accounted for 28% of the purchases.
Peter and Wendy Trevisani bought a condo after it was announced Louis Bacon was buying Taos Ski Valley. Ms. Trevisani is pictured with the children. Rick Scibelli, Jr. for The Wall Street Journal
In an email, Mr. Bacon said his investment in the resort would be “substantial.” “I knew it was a once-in-a-lifetime opportunity,” he said. “Taos Ski Valley is one of the top ski areas in the country.” Mr. Bacon, 57, is the founder and Chief Executive of New York-based Moore Capital Management, one of the biggest hedge funds in the U.S. with $14.9 billion under management. In 1992, he founded the Moore Charitable Foundation to support nonprofit organizations with a focus on land and water conservation. Mr. Bacon said he owns around 61.5 acres of land in Taos. He said he is an enthusiastic outdoorsman and has skied almost every run at Taos Ski Valley last winter.
Mr. Bacon wouldn’t say how much he is paying for the resort, which he will own through a private entity. The deal is under contract, with its closing still subject to the transfer of a Forest Service permit.
The couple’s condo Rick Scibelli, Jr. for The Wall Street Journal
Mr. Bacon’s acquisition ends a family ownership that goes back to 1954, when Ernie Blake, a German immigrant who served as a U.S. military intelligence officer during World War II, flew his plane across the southern Rocky Mountains and spotted an old mining town near a big snow basin. Living in an 11-foot camper with his family, Mr. Blake built a resort that soon found a following for its expert terrain, bone-dry powder and plentiful sunshine. On the way up, skiers pass through the town of Taos, with its adobe houses, Native American Pueblo and a history of eclectic visitors, ranging from Georgia O’Keeffe to D.H. Lawrence.
“It is a place that has so much more spirit than a purpose-built resort,” said Chris Stagg, the late Mr. Blake’s son-in-law, ski school director and Vice President of Taos Ski Valley, which locals call TSV.
As other resorts were acquired by corporations and modernized, TSV didn’t make major improvements. Its lift network was built in 1973. Skiers reach Kachina Peak, the highest point of the Ski Valley, only by hiking up a ridge, carrying their skis. The village looks dated, with a number of buildings from the 1960s and 1970s, and it lacks modern accommodations, spa services and restaurants.
Skier numbers have fallen. This winter, TSV sold 215,000 lift tickets, said Mr. Stagg, down from 220,000 last year and well below the 365,000 tickets sold at the peak in the 1994-95 ski season. Meanwhile, U.S. ski areas reported an 11% year-over-year increase in visitors in the 2012-13 ski season from the year before, the latest figure available from the National Ski Areas Association, a Colorado-based trade association.
In 2010, the Blake family drew up a Mountain Development Plan and a Village Master Plan for improvements to the resort. They were approved by the U.S. Forest Service and the town, but putting them into action, the Blakes estimated, would require $20 million. Last summer, they contacted Mr. Bacon about a sale.
The resort’s renovation, Mr. Bacon said, will adhere to the plans, which include two new lifts, one of them to Kachina Peak, mountain bike trails for the summer and a more welcoming base area. Under the plans, the village will keep its European feel and family atmosphere, but offer better access for pedestrians, with a reconfigured parking system and skier drop-off area. The plans also aim to give guests an immediate view of the main lift, now partly obscured by stairs, and a “sense of arrival” that the village now lacks. In addition, there will be new condominiums, as well as restaurants and retail space.
The Blake family won’t retain any stake in Taos Ski Valley, but Mr. Blake’s son, Mickey, will retain a seat on the board of directors, while Mr. Stagg will remain Vice President. Chief Operating Officer Gordon Briner will become Chief Executive Officer.
“I see this as a unique opportunity to build a sustainable business over the long-term, and do so by revitalizing the base area and facilities in a way that is consistent with the Blakes’ vision, while preserving and protecting a vital natural resource,” Mr. Bacon said.
There are limits to how hot the market can get. The town of Taos is planning to build a new, longer airport runway, but for now, the nearest major airport is a three-hour drive south in Albuquerque. Some visitors are deterred by altitude of the resort, where the base is at 9,207 feet. In addition, the Ski Valley is small and has little room for expansion because most of the land is owned by the U.S. Forest Service. Some home buyers prefer to buy in Taos itself, 20 miles south, where it is warmer and sunnier, with more dining and shopping options.
“Now that so many good things are happening at Taos Ski Valley, the challenge is to convince people to buy here, as opposed to the town of Taos,” said Jerome de Bontin. A French-born business man who until recently was general manager of the New York Red Bulls soccer team, Mr. de Bontin helped fund the Village Master Plan. With several partners, he plans to redevelop three parcels of land in the base area, including adding a “parking club” where day-use members have showers and valet services. He also plans to develop an upscale hotel and condominiums.