What’s Happening at Lake Tahoe

Below is an interesting article about what is going on at Lake Tahoe. There have recently been some capital investments in the area that have led to some positive changes for the Lake Tahoe region. Here are some influences of these recent investments for Lake Tahoe stated below. The article was written by the O’Dette Mortgage Group’s Ephraim Schwartz and Teresa O’Dette (800-404-2129) on May 3, 2012.

Tahoe Renaissance Presentation

Intro :  Statistics & Demographics

Population growth in 2010:  9.7%.  Ski/Winter Sports industry estimates they’re attracting new enthusiasts at 6.1%…..BUT, when breaking this down into Region – OUR number is 13.7%.  Tahoe representing the overwhelming majority of the Region is attracting new winter enthusiasts at a skyrocketing rate when compared to the rest of the country.  This is in part we are seeing lions of Colorado based resort destinations looking to grow into the Tahoe Area.

While the large sums of capital investments sparking this Tahoe Renaissance are focusing on the winter destinations, key to the Tahoe Real Estate market is the fact that unlike many winter destinations, Tahoe doesn’t go to sleep in summer….for those of you have  visited in the summer, it’s quite the opposite.  Tahoe births a whole shifted demographic of recreationalist when the snow melts.  Tahoe is the only winter destination resort in the United States where the average income per patron is higher in summer, than in winter….Tahoe has a unique appeal to potentially different vacationing demographics with both world class winter & summer attractions.We have seen perked interest in Bay Area Real Estate since the beginning of the year, nationally consumer confidence is on the rise, and locally the sentiment is that our niche Northern CA markets (Bay Area & Tahoe) have reached their “lowest cost of ownership” bottom.  Here is a look at where significant investment capital sparking this Tahoe Renaissance is being used.

SQUAW VALLEY USA

• Founded in 1949 by Alex Cushing, Squaw site of 1960 Olympics
• Been family (Cushing’s) controlled through Squaw Valley Ski Corp. until KSL purchased in late 2010.
• KSL, one of Denver’s largest Private Equity firms, is an experienced investor of luxury hotels, golf courses, spas, cruise ships, etc.
• KSL is investing $50M into Squaw over the next 5 years.  Squaw already has some of the most exhilarating in bounds ski terrain in North America.  On mountain improvements, with a focus on improving the family friendly and intermediate terrain…and the majority of this $50M will be in improving amenities, attractions, and activities for entire families.

$50M Investment Allocations:  New Food & hospitality offerings, improving family friendly & intermediate terrain, high speed chairlifts, and state of the art mountain information systems.  All enhancements are designed to better enable guests to embrace their desire for adventure, exploration, and immersive experiences, whether solo or with family & friends.

Year One:  Winter 2011- 2012 – $15 Million

• On Mountain Upgrades:  Terrain Parks – Squaw Valley has partnered with Snow Park Technologies (SPT).  SPT’s resume includes the ESPN Winter X-Games, Dew Tour, and signature Red Bull events.
• New SnoVentures Activity Zone:  mini snowmobiles for kids and snow tubing.
• Improved mountain/village navigation information.
• New Food & Dining:  Rocker at Squaw, KT Base Bar, O Lounge at Olympic House, Funi’s market & café, Full Belly Deli, Batch Cupcakery, Euro Sweets, Euro Sweets, and expanded Wildfour.
• New Skier Services:  Revamped snowsports school, new demo center, new Salomon rental fleet, new day lodge & family rec center, new reservations platform, and new sales & services center.
• New Retail:  Salomon concept store, North Face concept store, Oakley concept store, Farah Rale Jewelry Design.

Year Two:  Winter 2012 – 12013 – $20 Million

• Lift Upgrades:  Granit Chief & High Camp Chairlifts will both become hi speed detachable lifts increasing uphill capacity to 7,200 skiers per hour.  Links & High Camp chairs to be re-engineered to accmodate the natural fall lines of the slope, improving the experience for beginner terrain.

Future Plans:  Squaw Valley’s five year and $50 million capital improvement plan will continue to evolve to include further lift innovations, new experiential concept stores and new mountain adventures for kids and families.

Andy Wirth is Squaw’s newly appointed CEO.  Andy is the former marketing chief of Interwest owned – Steamboat ski area.  Andy knows the ski industry and is a marketing guy through and through.

ALPINE MEADOWS

Alpine Meadows is the only resort in North Tahoe with terrain rivaling Squaw Valley, on a slightly smaller scale.   For years the “skiers dream” has been to connect the two mountains.  In September of 2011, KSL purchased Alpine Meadows laying the foundation a physical merger.  The prize is not only the ability to access both mountains in a single day of skiing, but the terrain in between known as “White Wolf” has skiers/riders  has snow enthusiasts drueling.

NORTHSTAR

Northstar has been undergoing massive luxury improvements for the past several years; including a grand new village complete with fine dining, retail, ice skating, spa & luxury amenities, a mid-mountain Ritz Carlton, Hyatt Residences, summertime mountain bike park, and more.

• Vail Resorts purchased Northstar in fall of 2010.  Vail Resorts already owns Heavenly resort, and just recently acquired Kirkwood.
• Season passes now include access to Northstar, Heavenly, Kirkwood, Sierra at Tahoe, and 5 resorts in Colorado.
• Residential ski in & ski out developments:
• The Glades:  25 custom on mountain home sites above the Village at Northstar & near the Ritz Carlton.  Avg lot size just under 1 acre.
• Home Run:  16 paired on mountain luxury townhomes between 2 ski runs just below the Ritz Carlton.

MARTIS CAMP  Top tier luxury home sites in North Tahoe.

·         90 property purchases in 2011, totaling $90.2 Million in sales.·         2011 transactions represent a 68% increase in sales from 2010, greatest increase of any private community in the United Sales.

• Since 2006 Martis Camp has sold more than 360 properties for over $300 million in revenue, with 50 homes completed, 82 homes under construction, and 68 in the active design process.  Significant buyer representation from tech companies such as Google, Facebook, VMware, and Apple.
• Developer DMB/Highlands Group has completed approximately $90 million in Club amenities to date.

Closing Notes: 

Tahoe has historically been a drive-to destination of Bay Area enthusiasts.  This will continue to grow as the Bay Area is an active affluent area with an educated & innovative populous that has at the very least persevered through the recent economic slow down.   Significant is a shift in competitive mindset of Tahoe resorts from simply competing with one another, to as a collective group, marketing the virtues of a Tahoe destination against those of Colorado & Utah.  For example, Colorado resorts are a major destination from vacationers around the country.  Whether traveling from Texas or Europe, flights into Reno offer a 40 minute drive to ski in/ski out amenities in Tahoe, as compared to the I70 corridor from Denver to the mountains, which is some of the heaviest weekend traffic in the country.  Tahoe is booming; continuing to attract “drive-to” enthusiasts from all California, and we expect a significant increase in “fly-to” vacationers from all over the country, as well as internationally.  Real Estate in Tahoe is a finite resource, and just like what we have seen in SF since the beginning of this year, buyers are heating up on the current opportunities.