LONDONDERRY — “Save Magic,” reads the banner draped over the welcome sign to Magic Mountain Ski Area - a reminder that when the ski area opens this season, it may do so for the last time.
“It's a do-or-die year for us,” says Greg Williams, a volunteer and new Magic Mountain shareholder. Williams, a resident of Connecticut, is preparing to spend his 30th winter skiing Magic, and his first as a potential owner of the area.
Magic Partnership LLC is creating a cooperative, similar to Mad River Glen, that would gradually transfer ownership of the 700-acre Magic Mountain to at least 300 investors - presumably skiers who use the beloved mountain.
“That's too good a hill for someone to not do something with it,” says Jim Sullivan, president of Magic Mountain.
Sullivan has been running the mountain since September 2006 under a lease/purchase agreement with the property owners, Magic Mountain Management LLC.
That company understands that the area requires an influx of capital to make improvements in ski lifts and snowmaking to become financially viable, Sullivan says. Thus, he said, they have agreed to the partnership and allowing the cooperative of owner/skiers to buy Magic from them over time.
According to a prospectus for shareholders available on the ski area's Web site, the managing partner and majority shareholder of Magic Mountain Management LLC was Larry Nelson, who died April 1. His five children assumed his interest in the mountain.
In a message to supporters, Sullivan described Nelson as “a force in keeping the mountain operational since it re-opened in 1998,” citing his “extraordinary lengths to preserve and support the mountain through difficult financial times.”
At $3,000 per share, the sale of 300 shares will set Sullivan's business plan in motion. The shares would raise $900,000, which would go directly into Magic's infrastructure. Improving snowmaking falls at the top of the list.
Sullivan's full five-year business plan requires 1,000 shares to be sold over four years, ultimately raising $3 million to buy the area and upgrade it to its full potential.
According to Williams, Magic has many devoted skiers, yet revenues from their lift tickets ($129–$429) have not met the costs of operating the ailing ski area.
Sullivan, a native of Whitingham, was living and practicing law in Connecticut when he decided to take over running Magic in a decision he called his “mid-life radical move.”
Sullivan initially attempted to persuade a few investors to help him buy the mountain outright and then pump money for updates into the ski area. He leased the mountain with the option to buy it, and since September 2006 he has paid approximately $850,000 toward purchasing it and toward capital improvements.
Unable to find enough investors willing to invest huge amounts of money, Sullivan decided on a cooperative: Instead of recruiting a few investors with a lot of money, he would spread the costs more affordably among many people.
Magic Mountain Management LLC has agreed to transfer ownership to the Magic Partnership once the 300 shares are sold. At that point, Magic Mountain Management will become a partner in the Magic Partnership.
The Magic Partnership plans to buy out Magic Mountain Management in increments as more shares are sold. According to the prospectus, the mountain is valued at approximately $2 million.
Swiss-born ski instructor Hans Thorner designed Magic Mountain's trail system in 1961. Thorner chose Magic because the mountain's terrain and separate valleys were akin to valleys in Switzerland. The mountain attracted a devoted following.
The mountain was sold in 1986, but a few bad snow seasons coupled with bad real estate ventures forced the mountain to close in 1991, according to Sullivan's volunteer-run Web site, www.savemagicvermont.com.
The site reopened in 1996, when “a group of investors re-opened the mountain, and it has slowly progressed into one of the East's finest skiing hills,” the site explains.
Yet Magic Mountain Management has lacked the money to compete with the surrounding larger ski resorts. According to financial records on the ski area's Web site, www.magicmtn.com, the company has lost almost $2 million since 2004.
The new company
A five-member board, consisting of Sullivan, a representative of the Magic Mountain Management LLC, and three new shareholders would manage the ski area.
Shareholders receive an equity interest in the mountain, discounts on season passes and tickets, and the knowledge they “helped keep this way of skiing alive [at Magic],” says Sullivan.
Shares went on sale in July. About 40 percent of shares have sold, with proceeds held in escrow until sales reach 300.
Both Sullivan and Williams expressed disappointment that all the shares have not yet sold.
Sullivan acknowledges that $3,000 is out of reach for many. As a result, many have purchased season tickets, t-shirts and bumper stickers instead. All the money goes toward saving Magic.
To be successful, total attendance must reach 35,000. At its lowest point, skier attendance dropped to 5,000. Over the past three years, Sullivan and his team have raised total attendance to 16,000 skiers.
Unlike resorts like Mount Snow and Stratton which have boulevard-like trails and lightning-fast ski lifts designed to shuttle a large volume of skiers up the mountains, explains Williams, Magic has a more “traditional” trail system.
“[Magic] is a great classic Vermont mountain in terms of terrain,” says Sullivan. “Skiers are expected to take their time.” Magic's trails are narrow and wind their way down, following the contours of the mountain, according to Sullivan.
Sullivan says the local community supports Magic's cooperative concept.
“This is not an area with a lot of money, and Magic is a significant part of the economy,” he says.
It would be even more true, he adds, if the ski area becomes financially stable.