NEWS WITH LONG-TERM IMPACT

By Jim Lewis

Feb 27, 2018

After what seemed like a never ending Fall, we finally started seeing snowflakes and I am amazed at how well the season is turning out. Although Park City may not break records this year, we are holding our own. Coleen Reardon, director of marketing at Deer Valley, was quoted in the Park Record as saying that because of the resort's snow making abilities, business is pacing even with last winter. Deer Valley and Park City get well-deserved kudos from recent visitors about the quantity and quality of snow and retail, entertainment and restaurants do an amazing job of providing a quality product. Sundance was once again a huge success with over 70,000 visitors and Utah was again the number one viewer market for the 2018 Olympic Winter Games. I'm sure Park City more than held its own as a small part of the Utah market and it was great to see local winter athletes participate and do well. Salt Lake City/Park City will compete for the 2030 Winter Games and as the only past Winter Olympics location that has maintained facilities and training capability, it is hard to see us not winning that bid. I believe Park City and Salt Lake City's history of welcoming athletes and visitors from around the world will help the media remember that the Olympics are all about the pursuit of excellence in individual/team competition, not about competition among nations. Park City will always be as proud of participants who never make an Olympic podium as it is of Ted, Lindsey, Bode and Stein. This season has also brought us the "battle of the passes". Now Alterra, who recently purchased Deer Valley, is launching the new Ikon Pass to compete with Vail's Epic Pass. The new pass includes Deer Valley, Alta & Snowbird and 23 other North American resorts and goes on sale March 6 at http://www.ikonpass.com . Meanwhile, Vail's 10 year old Epic Pass, which gives its 700,000+ buyers access to four dozen resorts around the world including Park City Mountain Resort, will be tough competition for the Ikon Pass. I expect many of our locals and frequent visitors who are devotees of Deer Valley will continue purchasing Deer Valley season passes since the Ikon Pass includes only 7 days at Deer Valley. The Epic Pass and the new Ikon Pass are having a huge impact on the ski industry. We are seeing more evidence each season that "ski nomads" are becoming the new normal. In the past, "every-year-to-the-same-resort" created a market for larger family gathering ski properties. These homes and condominiums were furnished by the buyer (with the help of top decorators) and managed by professional property managers including nightly rentals when not in owner use. Now we are seeing new projects designed and managed more like luxury hotels and sold furnished with more emphasis on rental returns for owners. Recently Re-Play has launched a full ownership, fully furnished "YOTELPAD" product at Canyons Village with prices starting at $275,000. Sizes of this "first in the world" offering will range from 338 SF - 1,013 SF with services and amenities focused on nightly rental performance. There is a good reason that the company who created YOTEL and YOTELAIR has selected Park City to be its first foray into the resort market. It will be joined by 5 similar projects already confirmed in North America, Europe, and the Middle East. Hubert Viriot, YOTEL CEO was quoted in London as saying " Following the successful roll out of YOTELAIR and YOTEL, we saw a natural opportunity to rethink the traditional extended stay segment in the same fashion we disrupted conventional hotel models." Based on the enthusiastic acceptance so far by the Park City Realtor community, the IPO style offering should be an exciting event. Construction is scheduled to begin July 2018 and estimated completion is early 2020. If all of the above isn't enough real estate related news, last week it was announced that Storied Development, LLC, a Georgia real estate firm has purchased the 450 member Talisker Club in Empire Pass, 533 residential lots in the Tuhaye Golf Community development and 4 Empire Pass sites with development approvals for a combined 75 condominiums. You can expect major news in the near future concerning the rebirth of one of the premier golf/ski communities in the Park City market.

Tags: Successful Sundance, Salt Lake City/Park City to bid for 2030 Olympic Winter Games, Alterra's Ikon Pass to compete with Vail's Epic Pass, New real estate product for ski nomads - YOTELPAD, Storied Development LLC purchases Talisker Club and related real estate development product
Posted in Uncategorized, Project News, Vail News, Deer Valley News, Heber Valley News | 0 Responses to "NEWS WITH LONG-TERM IMPACT"

FINALLY AN ANSWER TO THE $64 MILLION QUESTION

By Jim Lewis

Jan 27, 2018

Park City Treasure deal announced.

In a front page story in the January 27-30 edition of the Park Record entitled "Deal reached for all of the Treasure land" reporter Jay Hamburger wrote that City Hall and the Treasure partnership said that a 1/24/18 deal had been reached calling for the city to acquire a long disputed hillside property in Old Town for $64 million. This acquisition would require voter approval of Park City's biggest-ever bond next November. http://www.parkrecord.com/news/park-city-says-late-hour-talks-underway-to-acquire-all-of-treasure/ . That article was followed by two additional articles adding details and clarifying what had happened and what would happen next. https://www.parkrecord.com/news/park-city-treasure-deal-holy-smokes-that-was-fast/ , talked about events the day the deal was agreed to, and an article entitled "Treasure price falls sharply" tried to summarize the last seven years of the 30+ years of negotiations leading to last Wednesday. https://www.parkrecord.com/news/park-city-treasure-deal-fell-by-millions-of-dollars-since-2011/ . A final article entitled "Treasure deal is a "dream" outlined the importance of this deal and the benefits the citizens of Park City would receive. http://www.parkrecord.com/news/park-city-treasure-opposition-sees-deal-as-our-dream/ . Although this article was largely written from the viewpoint of the Treasure Hill Impact Neighborhood Coalition who have long argued for this outcome, it only goes a little way in communicating how important this step is in the history of Park City. Failure to reach this agreement and finalize it with a yes vote in November 2018 would be a devastating blow to what Park City has become and has the potential to achieve going forward. Everyone involved should be proud.

Tags: Park City/Treasure Partnership deal, $64 million property acquisition by Park City
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WINTER WONDERLAND

By Jim Lewis

Jan 13, 2018

Although we all wonder where the snow is, it seems to be a surprisingly normal year for visitors. The magicians who make snow have outdone themselves this year and have taken us to the time that never fails to bring real snow - the Sundance Film Festival. Sundance is 10 days (Jan 18-28) of maxing out every resource Park City has to offer (except ski hill capacity). The new Community Guide To The 2018 Sundance Film Festival is helpful for parking and logistics - http://parkcity.org/home/showdocument?id=48708 . My only advise is to bring lots of cash and comfortable snow boots and don't ask the question "Don't you know who I am?" or you'll wind up in the amnesia ward of our world class hospital. One piece of recent news you can use to prove that you're up to speed on Park City news is the announcement that the joint venture between KSL Capital Partners and Henry Crown and Co that acquired Deer Valley Resort has finally come up with a name - Alterra Mountain Co. - http://www.tinyurl.com/ybtlhcuf . For additional background refer to my 8/26/17 uncategorized post - "The Battle of 800 lb Gorillas Begins With the Sale of Deer Valley" and my 4/15/17 uncategorized post entitled "Lets Get Ready To Rumble!". Project news is proceeding at warp speed and I have identified 3 projects now under construction in Deer Valley and 7 projects underway in Canyons Village that will be the real estate focus this season. Detailed analysis of these projects will be the subject of my posts in the near future. There were 41 pended sales reported by the Park City Multiple Listing Service in the week ended 1/5/18. 20 closings and 41 new listings were reported during that week. In the week ended 1/12/18, there were 58 pended sales, 29 closings and 48 new listings.

Tags: 2018 Sundance Film Festival, Alterra Mountain Co.
Posted in Uncategorized, Deer Valley News | 0 Responses to "WINTER WONDERLAND"

DISASTER AVERTED . . . . FOR NOW

By Jim Lewis

Dec 16, 2017

Since the 1980's, a cloud has hung over Park City in the form of development rights granted to the Sweeney family to develop a large commercial project on 120 acres overlooking Old Town. Back in the 80's when the prosperity of today was only a hope for the future, the idea was to create a bed base that would fill main street businesses with customers. As time went by, residents realized the mass and scale of the Treasure Development did not fit into the overall community development that moved forward in unexpected ways. As visitor traffic increased and the bed base materialized in a variety of locations, the impact of 1,000,000 SF of lodging and commercial space including 200 hotel rooms, 100 condos plus conference space, with some buildings 100 feet high, was eventually recognized as a toxic mix of construction chaos, traffic congestion and unneeded capacity and competition for a prospering Old Town. Owners of restored miners homes imagined being in the shadow of tall hotel structures after years of intense construction activity and a traffic nightmare on narrow Old Town roads. All or those issues and the growing resident alarm resulted in what seemed like endless and very contentious planning commission meetings focusing on the project components and impact issues. By 2010, the Planning Commission and the Treasure partnership had reached an impasse and an attempt was made to buy out or produce a smaller reworked project. After a $93,000,000 buyout proposal from the Treasure partnership was rejected by the City, discussion on the original development plan continued with ever increasing intensity and community angst, with a deadline for a final planning commission decision at the end of 2017. At the 11th hour (as in last week), closed-door discussions between all parties have produced a possible buyout of 50% of the Treasure Partnership (the total interest of the Sweeney family) for $30,000,000 and a reduced project scope to include 18 single family homes and a small boutique hotel for the remaining partner - a firm called Park City II, LLC. That solution would be contingent on residents passing a $24,000,000 ballot measure in November of 2018 and an immediate $6,000,000 payment from the City to the Sweeney family. It is estimated that a $24,000,000 bond would cost the owner of a primary home with a taxable value of $1,000,000 approximately $90.75/yr for 15 years. The owner of a vacation home or commercial property with the same taxable value would pay $165/yr for 15 years. In hindsight it's easy to say that Park City should have stepped up years ago and purchased 100% of the development rights for less money, but even if that was possible, it didn't happen and residents should see this as the last chance to avert a true disaster. The cost of the bond and the probable suspension of plans to build Main Street Plaza and the possible re-evaluation of other conservation purchases are a small price to avoid the effects of allowing the original Treasure development to go forward or to deny project approval, enter into costly and doomed litigation only to see the project go forward eventually.

Tags: Treasure development planning commission decision delayed - possible buyout deal, Treasure Development history
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NEW YORK, NEW YORK, WHAT A WONDERFUL TOWN!

By Jim Lewis

Nov 04, 2017

The big Park City headline of the week was " New York City firm acquires Mayflower land next to Deer Valley" http://www.parkrecord.com/news/firm-acquires-mayflower-parcel-near-deer-valley-resort/.#.Wfzfi1ke2VI.email . To get the full impact of this news you have to consider it as it relates to other development now underway and the news discussed in my 4/15/17 and 8/26/17 uncategorized posts concerning the acquisition of Deer Valley Resort by the as yet unnamed alliance between KSL Capital Partners and Aspen Skiing Company. The New York firm referenced is Extell Development Company, a privately held development company - https://extell.com . Extell president Gary Barnett, one of the biggest names in New York City real estate quietly purchased 40 acres adjacent to Deer Valley ski resort back in 2015 from an investor who had secured approvals to develop a hotel and roughly 200 condos on the site. Back in May 2016, the rumor was that Extell was looking to buy another 1,000 acres from the consortium of Dutch investors who have owned a large holding there since the 1980's. Now the acquisition of 2,300 acres announced yesterday combined with Extell's 40 acre Blue Ledge parcel opens up the opportunity for a year-round master-planned luxury resort in what could be a 30 year project. That development would add over 1,000 acres of ski terrain, lifts and parking in support of luxury residential and commercial development. One look at Extells New York property portfolio will give you some idea of how much the pool of prospects for Park City luxury property has expanded with this acquisition.

Tags: Extell Development Company acquires 2300 acres next to Deer Valley
Posted in Uncategorized, Project News | 0 Responses to "NEW YORK, NEW YORK, WHAT A WONDERFUL TOWN!"

SUTTER'S MILL WAS NOT "SELECTED" AS THE SITE OF THE CALIFORNIA GOLD RUSH

By Jim Lewis

Sep 09, 2017

In an August 7th post - "A low tech solution to high tech recruiting" I discussed the growing competition for high tech talent by financial and tech companies. Talent fleeing the high cost of living in coastal areas are now prime targets for Utah firms and Utah's much lower housing costs are one of our prime attractions. A very interesting article in today's WSJ entitled "Why Amazons Growth Ambitions Don't Fit In Seattle" by Laura Stevens sheds new light on that discussion. https://www.wsj.com/articles/why-amazons-growth-ambitions-dont-fit-in-seattle1504954806 . Amazon is now seeking a site to construct a second corporate headquarters in North America that would cost an estimated $5 billion and eventually house an additional 50,000 workers. The company is looking for proposals by October 19, 2017 and Utah is interested in that opportunity and will have lots of competition. What was interesting to me was some of Amazons location preferences:

Metro areas with more than 1 million people
A stable and friendly business environment
The ability to attract and retain strong technical talent
Within 30 miles of a major population center
Within 45 minutes of an international airport.
1-2 minutes from major highways and arteries.
Utah's Wasatch Front and Wasatch back meet these general requirements and in fact Salt Lake City has already been selected for an Amazon distribution center with construction underway. That facility is located not far from the new $2 billion Salt Lake International Airport expansion. Amazon states that jobs created would exceed $100,000 in annual compensation so competition will be fierce. Real estate site selection experts are putting forth locations like Boston, Chicago, Dallas, Atlanta & Minneapolis and no one is mentioning Utah, but I think this search should be a warning to movers and shakers in Silicon Slopes. Odds are that Utah won't be selected, but if not, our perfect fit will eventually attact one of the major players in Amazons league. If our emerging tech industry "home boys" think recruiting is a challenge now, just wait until an Amazon-like event comes to town.

Tags: Will Utah compete for Amazons second corporate headquarters?
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THE BATTLE OF 800 LB GORILLAS BEGINS WITH THE SALE OF DEER VALLEY

By Jim Lewis

Aug 26, 2017

My April 15, 2017 post discussed the news that a new alliance between KSL Capital Partners and Aspen Skiing Company had entered into an agreement to purchase Intrawest Resort Holdings ski areas for $1.5 Billion, followed several days later with the purchase of Mammoth Resorts. At that time Eric Resnick, CEO of KSL Capital Partners said that the new partnership was not about real estate development, but was focused on operations with seasons pass revenues the financial engine. This was a direct challenge to Vail's industry changing Epic Pass program. http://blogs.realcove.com/jimlewisblog/lets-get-ready-to-rumble/ . On August 21st Park City awoke to the news that the Aspen Skiing Company/KSL Capital Partners alliance have entered into a definitive agreement to acquire Deer Valley Resort. http://blog.deervalley.com/deer-valley-resort-to-be-acquired-by-newly-formed-resort-company-and-joined-with-intrawest-mammoth-resorts-and-squaw-valley-ski-holdings/ . The sale is expected to close prior to the upcoming 2017-18 ski season with no change in the existing Deer Valley pass product already on the market. Deer Valley has also announced that it has no plans to change the operations and standards that have made it the premier ski resort in North America, with management and staff unchanged. Although the four Aspen Snowmass resorts privately owned by the Crown family of Chicago will not be included in this transaction, they may participate in a joint pass program or other opportunities to work together in the future.

So what does this recent development mean for Park City?

I believe it will be easy to underestimate the impact of this good news on Park City's future. Park City now becomes the center of North American skiing. Park City will be the only town where dueling resorts are on the same bus route and within walking distance of each other. Both contenders will share the benefits of our huge transportation advantages, "greatest snow on earth", proximity to the booming Salt Lake metropolitan area, and our $2 Billion International Airport renovation, but I'm sure these two brands will compete to be recognized as the best providers of ski and other vacation experiences. Any fears of becoming a Vail "company town" disappear and both contenders have top reputations as philanthropists and community builders. With access to some of the best minds in architecture, construction & planning and hospitality, the future development of the Deer Valley Resort and other areas already on the drawing boards can only be improved. I do believe we can cut back on efforts to generate visitor traffic from everywhere all the time and concentrate on the quality of what we provide for visitors and residents.

Significant Sales - week ended 8/25/17

Park City real estate activity returned to normal last week. There were 68 pended sales reported by the Park City Multiple Listing Service in the week ended 8/25/17. 41 closings and 73 new listings were reported during that week.

Single Family Homes: Testing, testing - prices that is - new luxury listings continue to be priced aggressively with pended sales supporting that trend in most cases. In locations where that support does not materialize, we are seeing downward adjustments. Two new luxury single family home listings in Old Town demonstrate aggressive pricing, but the greatly diminished supply of top level Old Town homes has made such homes rare opportunities. 527 Park Ave in Old Town is a 2,000 SF, 3 bedroom, 3 bath home built in 1888 and remodeled in 2010. This is the architectural romance that every Old Town buyer is looking for. The location couldn't be better - close to Main Street and the Town Lift. Priced at $2,495,000 ($1,248/SF), this home is a jewel box. http://www.spotlighthometours.com/tours/tour.php?mls=11703537&state=UT . A home at 621 Woodside Ave in Old Town built in 2006 has been considered one of the prime reasons that this location is considered Park City's "Gold Coast". This 3,770 SF, 4 bedroom, 5 bath home features unparalleled craftsmanship, ski-in/ski-out access, an over-sized 2 car garage and many unique historic architectural elements. Priced at $5,500,000 ($1,459/SF) this is as much luxury as Old Town can offer. http://www.spotlighthometours.com/tours/video-player-hls.php?id=2388015&autoPlay=true. A notable new listing in another very popular location is a home at 2490 Silver Cloud Drive in the Fairway Hills neighborhood in Park Meadows. This 6,783 SF, 5 bedroom, 6 bath home built in 1999 is priced at $2,995,000 ($442/SF) http://www.tourbuzz.net/public/vtour/display/857334?idx=1#!/ . If you've always wanted to live on the top of the mountain, check out a new listing at 147 White Pine Canyon Road at The Colony. This 7,420 SF, 8 bedroom, 10 bath home including a main house and a guest house is priced at $5,750,000 ($775/SF) with ski access on Winters Way. http://www.tourbuzz.net/public/vtour/display?idx=1&mlsId=257&mlsNumber=1476071 . My vote for single family sale of the week goes to 4275 Quarry Mountain Road in the Quarry Mountain Ranch subdivision in the Old Ranch Road area. This 7,377 SF, 6 bedroom, 7 bath home on 2.31 acres was listed at $5,250,000 ($712/SF) after a recent reduction from an original listing price of $5,848,000. http://www.tourbuzz.net/public/vtour/display/583731?idx=1#!/ .

Condominiums: A rare new listing at the Racquet Club condominiums in Park Meadows sets a hew high for that townhouse project. 177 Racquet Club Drive is a 1430 SF, 2 bedroom, 2 bath property built in 1976 and recently remodeled. Priced at $645,000 ($451/SF), this should attract major interest. http://www.spotlighthometours.com/tours/tour.php?mls=11703501&state=UT . After a recent $191,600 price reduction and 277 DOM, Unit E at the 205 Main St Condominiums went under contract last week. At the new price of $2,995,000 ($922/SF), this 3,249SF, 3 bedroom, 4 bath property is the second closing in this project and should help new townhouse construction on Main Street to find the right price levels. http://www.tourbuzz.net/public/vtour/display?idx=1&mlsId=257&mlsNumber=1445773 .

Vacant Land: The only notable sale in this segment of the market was a sale at 195 White Pine Canyon Road in The Colony. This 4.00 acre site was listed at $1,800,000 with ski access on Trace and easy access to the Quicksilver Gondola. http://www.spotlighthometours.com/tours/tour.php?mls=11504647&state=UT .

Tags: Recent homes sold in Park City Utah, Recent homes listed in Park City Utah, Deer Valley sold
Posted in Uncategorized, Recent Significant Sales and Listings, Project News, Vail News, Deer Valley News | 0 Responses to "THE BATTLE OF 800 LB GORILLAS BEGINS WITH THE SALE OF DEER VALLEY"

A LOW TECH SOLUTION TO HIGH TECH RECRUITING

By Jim Lewis

Aug 07, 2017

An article in the July 27th edition of the Wall Street Journal entitled - " Wall Street's New Frontier" by Asjylyn Loder caught my attention. The sub-heading of this short article was "Denver and other inland locations draw financial firms and jobs fleeing costly coastal cities". Although the article focused on Denver as the prime example of an inland city welcoming a tide of financial professionals from coastal areas afflicted with skyrocketing home costs, Salt Lake City, Phoenix, and Dallas received "honorable mention". A major factor not considered in the article is the world wide recruiting war now underway between the financial industry and the tech industry. Salt Lake City/Provo is now the home of many firms competing for tech talent, but the day-to-day recruiting battles are taking place in the coastal areas mentioned in Asjylyn Loder's article. I believe that if you consider the competition between Tech and Finance for fresh tech talent, it makes sense to move the Salt Lake/Provo area (increasingly being identified as "Silicon Slopes") up to #1 and include Denver in the runner-up column. If the financial industry thinks the companies with the most ping-pong tables, foosball, free food, and casual clothes will win the recruiting battle, they should look closely at what is happening in Utah. Both cultures rely on speed, all-in attitudes, and hard work and recruiting material focusing on the attractions that succeed in luring tourists and portraying work days in gleaming high tech offices won't work. Millennials, who want work-life balance, and Gen Z, who are looking for work-life integration, are not about to sacrifice work success by settling for work-at-home or small outpost location solutions. They would prefer to be in an office close to the people who matter and say hello to those people every day. Goldman Sachs opened an office in Salt Lake City in 2000 which has become its second largest office in the America's and forth largest globally. A quote from their recruiting material reads: "Considered one of the best places to live in the United States, the Salt Lake City area offers great outdoor recreation, all the amenities of a large metropolitan city, affordable living and a growing economy". This statement is then further supported by a number of bullet points relating to why Utah/Salt Lake City/Goldman Sachs have been recognized as exceptional by everyone from Forbes, Working Mother Magazine to Skiing Magazine. Goldman Sachs CEO Lloyd Blankfein has said "we are a tech company" on a number of occasions and his firm has gone from 600 equity traders in 2000 when the Salt Lake office opened to 2 equity traders today. Currently 9,000 of Goldman Sachs 33,000 employees are engineers.

It is unclear whether the financial industry's tech transition will come from building its tech capability one recruit at a time or buying it through acquisitions, but in either case, successful recruiting is the key to a bright future. Financial firms are realizing that just paying more money doesn't do it anymore and Utah tech firms are realizing that University of Utah, BYU and other local ties along with funky local culture have their limits. Why should the best and brightest join any of the companies locked in this rapidly expanding recruiting war? There is a low tech solution to this high tech recruiting problem. As the WSJ article correctly points out, talent is fleeing high cost areas for low cost alternatives. Housing costs and availability are by far the dominant contributor to the cost problem that gives an opportunity to recruiters from low cost locations to convince individuals to make the painful decision to relocate. A growing share of recruiting targets are making those decisions based on family happiness, not on office perks or even commutes. The answer is simple - help them buy a house, or better still, buy a house they like and that fits their family needs, and rent it to them at an attractive price. Many financial firms have discovered that buying single family homes and renting them to desirable tenants makes sense. Tech and Fintech companies offering a solution to people faced with this affordable housing problem on both coasts could attract and retain the loyalty of the all-in, willing to work hard talent they require while building a portfolio of assets with a bright future.

Tags: Salt Lake as part of Wall Streets New Frontier, How can Utahs Silicon Slopes compete with Silicon Valley for talent?, Utahs Finance & Technology companies compete for coastal tech talent.
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TAKING IT OUTSIDE

By Jim Lewis

Jul 31, 2017

A farewell to the Outdoor Retailers Trade Shows:

After two decades in Utah, the final Outdoor Retailer Summer Trade Show being held in Salt Lake City is leaving for Denver, Colorado. The change was a result of the strong opposition of the Outdoor Industry Association and the shows owner to the states backing of efforts to transfer control of public lands from federal to state control and to overturn or shrink the Bears Ears and Grand Staircase-Escalante national monuments. The trade shows have had a major economic impact in Utah and will be missed, but a protest march on the capital by members of the association and an article in the Salt Lake Tribune reminding citizens that the Outdoor Industry meant $12 Billion for Utah last year and supported 110,000 Utah jobs seems to confuse trade show impacts with the impacts of the industry itself. The future of skiing, camping, fishing, hunting and visitation to Utah's national and state parks will be little affected by this trade show relocating to Colorado. It is unfortunate that the outdoor retailers decided to take their marbles and go home after Utah did not agree to their "do what we say or we'll shoot your dog" message. I don't remember voting for any of these people and unlike the people who hunt and fish and participate in many forms of outdoor recreation, I am not aware of any willingness from these businesses to help pay for the facilities and services that make their products so profitable - beyond obeying the tax laws. Many of the record number of visitors that are over running our national and state parks are wearing Pategonia products and buy and use many other trade show products, but those products do not contribute to the large and growing deferred maintenance problem the parks are dealing with. It's unfortunate that the Outdoor Retailers have withdrawn from the discussion of Utah's recreation future and the many Utah citizens who share their feelings could have used their support and contributions in discussions to come, but I haven't seen any sign that the beautiful Pategonia store on Park City's Main Street is planning to relocate. In any case - "thanks for not shooting my dog".

Tags: Outdoor Retailers Trade Show leaves Utah for Colorado
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PARK CITY MARKET STATISTICS - July 2016-June 2017 / July 2015-June 2016

By Jim Lewis

Jul 29, 2017

A strong first half of the year for the Park City area real estate market:

All major segments of the Park City area market show a steady increase in quantity and volume sold along with increases in both average and median sale prices. Drilling deeper, different trends are apparent. Within the Park City limits, the median price of single family homes has moved up 20% to $1,900,000 while the median condo price has increased by 6.2% to $701,000. The lack of affordable housing is a growing problem and as more affordable housing moves further beyond Park City limits, increased traffic and parking problems also increase. The Snyderville Basin shows a similar pattern with the median single family home price up 4.75% to $970,000 and the median condo price up 13.4% to $487,500. Moving further out, the gated golf communities maintain steady volume and luxury prices, but small outlying communities like Kamas, Oakley and Woodland show increased sales, but the median price of single family homes is still under $400,000. Going all the way to the Heber Valley, activity and volume are up, but the median price of single family homes is under $400,000 and new construction activity is strong.

The latest statistics support a message delivered in my past 2017 blog posts that a large majority of buyers are looking for full-time or second homes vs. vacation or investment properties. Park City is seeing many older nightly rental condos being remodeled and sold to full-time or second home residents who do not enter into nightly rental agreements. Many of these purchases are as more affordable alternatives to single family homes within the city limits. We are also seeing owners of large, older upper-end homes downsizing, but choosing to stay in Park City in smaller upgraded properties. (see the 7/17/2017 post "How did Park City, Utah become a top retirement choice"). A related trend lurking behind the numbers is the rise of a new generation of luxury condominium residences built for nightly rental performance. These new projects are being pre-sold well before the completion of construction. This is also a major reason for significant unsold resale inventory in Empire Pass - product that is now aging and club oriented. Todays buyers seem to be increasingly allergic to high carrying costs in the form of club dues and high HOA expense unless they are confident that rentals can pay those bills. Last week a significant project was announced by the owners of the Goldener Hirsch Inn to be located on the last remaining parcel in Silver Lake Village. This luxury hotel will be the first new project in over a decade in Silver Lake Village and will join St. Regis, the Stein Eriksen Lodge, Stein Eriksen Residences and Montage as full service luxury properties. These 39 contemporary residences will be connected to the iconic Goldener Hirsch Inn by a sky bridge and are being sold fully furnished with completion scheduled for the summer of 2019. Visit http://www.goldenerhirschbrochure.com for details. This offering is well priced and yes, I do have strong opinions on best location values. I expect strong interest when reservations commence on August 4, 2017.

There were 53 pended sales reported by the Park City Multiple Listing Service in the week ended 7/28/17. 35 closings and 70 new listings were reported during that week.

Tags: Park City real estate statistics - Q2 update, Park City real estate trends, Goldener Hirsch project release in Deer Valley
Posted in Uncategorized, Project News, Deer Valley News | 0 Responses to "PARK CITY MARKET STATISTICS - July 2016-June 2017 / July 2015-June 2016"

HOW DID PARK CITY, UTAH BECOME A TOP RETIREMENT CHOICE?

By Jim Lewis

Jul 17, 2017

Retirement for those that don't believe in retiring.

I never thought of Park City as a "retirement community" - that term has always brought to mind silver haired people relaxing in lawn chairs with palm trees in the background. Recently I've realized what a strong trend retirement or more accurately "active retirement" is in shaping the Park City real estate market. How could a ski resort high in the mountains in a state with the youngest demographic in the country be a magnet for people contemplating retirement?

First of all, the definition of "retirement" is way dated. What used to mean living on a pension after a long career with a big company, is now moving to the financial independence gained from business or asset ownership or high level business management that makes possible the pursuit of goals other than more money at any age.
Pre-retirees are generally identified as 50-64 year old's, but increasingly successful entrepreneurs, professional athletes, or other professionals who can choose to end their active careers at a much earlier age expand that definition. These people fit the profile of visitors who have been recreating in Park City in increasing numbers for the past 50 years.

So guess what? In the early days a small percentage of visitors fell in love with this old mining town despite its many shortcomings. A few even became permanent residents, but most became vacation home owners. In 1973 when you could buy a Park Avenue 2 bedroom condo for $46,500 on a bank foreclosure sale or a lot in Holiday Ranch for $10,000, this was an easy decision. As the years went bye, prices increased and new second home owners paid prices considered crazy by first buyers. Park City shortcomings of the 60's and 70's faded and by the early 80's Deer Valley put Park City on the luxury map and lot prices approaching $500,000 seemed unbelievable to the second wave of buyers. In 1998 The Colony was able to sell its first 20 lots for $745,000 - $1,150 in one day. Many of those early early Deer Valley and Colony lot owners proceeded to build luxury ski homes which they enjoyed as vacation homes. My guess is that any retirement planner working with those brave pioneers would have been horrified by the expected effects on any sane retirement plan of building a luxury vacation home on the side of a mountain in Park City, Utah. As Park City continued to develop recreation, culture, services, and effective government (see "The Richest Small Town in America" uncategorized post dtd 10/1/15), many of Park City's second home owners decided that there was no better place to live and are now identified as "retirees". Now some are downsizing, but most stay within the community they helped to build and today's prices give them many options. On the other end of the price scale, people who purchased new production homes in neighborhoods like Snyders Mill, Ranch Place and Park Meadows in the mid 90's for $150,000 - $250,000 can now realize prices ranging from $700,000 - $1,000,000+. They can choose to relocate to nearby communities like the Heber Valley where comparable homes sell at roughly half of Park City prices, or they can just enjoy living in their home waiting for the final mortgage payment.

Relatively few of past Park City newcomers were investors - full-time residents were mainly looking to enjoy their life and raise their families. Investors who did purchase nightly rental condominiums experienced a variety of results. The 2008 recession was a difficult time for luxury nightly rental condominiums, but after years of seeing little new construction, today's market see's new nightly rental product which has many advantages over older projects (see "That New Car Smell" uncategorized post dtd 5/9/17 & part 2 dtd 5/12/17). It is notable that many of the original nightly rental condominiums are being remodeled and converted to full time residences, but few of these situations result in being retirement homes for the former landlords.

There are so many reasons why people wanting to live here and own primary or second single family homes are dominating the current Park City real estate market, that I have decided to focus future posts on those benefits that are unique to Park City. The real estate choices facing potential new residents are much different for the pre-retiree than for the young family or the investor.

Tags: Park City Utah as a retirement community, Single family homes dominate Park City Utah real estate market
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THE ART OF THE DEAL - PARK CITY STYLE

By Jim Lewis

Jul 08, 2017

More good news:

At a press conference on Friday, Park City Major Jack Thomas and the Park City Council announced a major initiative to purchase 5.25 acres in the City's Bonanza Park neighborhood for $19.5 million to form the city's first-ever Arts & Culture District, with Sundance Institute and Kimball Art Center as anchor partners. Property owners Mark J. Fisher and John Paul DeJoria after spending many years trying to craft development plans acceptable to the community that would also be economically viable, have agreed to step aside to make the new project possible. Now a collaborative planning & design process in 2017 - 2018 will lead to a projected groundbreaking in 2019.

Two years ago the news was all about Vail's new resort and Replay Resorts was being introduced as the master developer (see uncategorized post dated 7/6/2015). At that time Replay made a point that has proven key to understanding the recent Park City real estate market and now applies to the announcement of the new Arts& Culture District. Developments that provide exclusive amenities for their owners find that the price tag for the construction and maintenance of those amenities (golf courses, tennis courts, swimming pools, etc) are becoming less popular with owners. Replay de-emphasizes on-site amenities in favor of natural beauty and attractions of the area. They expressed the belief that becoming an extension of the surrounding community and vice versa is a far more cost effective way of establishing a destination than building attractions inside the gates. They encourage guests to see the ways of a place through the eyes of the locals. In that light, real estate owners should look at the establishment of a dedicated Arts & Culture District (funded by a 1% transient room tax) to include the Sundance Institute and Kimball Art Center, as amenities that improve their properties free of added property taxes, club dues or higher HOA fees. Of course the recent $38 million acquisition of the 1,350 acre Bonanza Flats parcel does involve extra taxes, but provides a perpetual benefit to residents whose cost was accepted through donations and a major up-front vote for the $25 million bond.

Major credit should be given to Robert Redford for rejecting advice to solve the Film Festival's growth problems by moving out of Park City and instead making a commitment to Park City as the permanent home of the Sundance Institute and the Sundance Film Festival. Park City residents and second home owners should realize the loss that would be suffered by losing what has developed over the past 30+ years. Last month it was announced that the 2017 Sundance Film Festival generated a total economic impact of $151.5 million and that number is in addition to the economic impact of the Sundance Institute's year round Utah-based programs, such as the Filmmaker Labs and Summer Film Series. There is no doubt that Sundance, the Kimball Art's Center and the arts community they have helped to build are an important component of the Park City brand. As discussed in my 6/24/17 post, Park City finished a close second for Art's Vibrancy for towns under 100,000 people in a recent study of 900 communities by Southern Methodist University.

The economic benefits and the world wide recognition are important, but as Mayor Thomas said at the Friday announcement, "Artists help preserve the soul of their communities" and this project should go a long way towards establishing Park City as a cultural hub of the West.

Tags: Park city's first dedicated Arts & Culture District, Sundance Institute news, Sundance Film Festival news, Kimball Art Center news
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GOOD KARMA STRIKES AGAIN

By Jim Lewis

Jun 17, 2017

Significant News:

Another boatload of good news arrived in Park City last week. The Bonanza Flats deal, which once seemed impossible, closed on the June 15th deadline with hours to spare. The acquisition covers 1,350 acres popular with recreation lovers who hike and bike there in summer and cross country ski and snowshoe there in winter. A $25 million dollar bond was passed in Park City last fall and it was announced in January that an additional $13 million would be needed to meet the purchase price of $38 million. It would take a long time to name the estimated 3,500 donors who stepped up to raise the additional funds required, but it included participation from Summit County, Wasatch County, Salt Lake City, Salt Lake County and second home owners from all over the country. Long expected to be a luxury golf/ski development site, citizens decided conservation and protecting the watershed were more important.

It was also announced last week that 2016-17 was a record-setting ski season for Utah's 14 ski resorts attracting 4,584,658 skier days even though a late start limited the Thanksgiving traffic. Deer Valley and Park City Mountain resort had banner years with the Vail Resorts Epic Pass program being credited for pulling in more skiers. The Utah Tourism Office reported that Utah's resorts generated $8.2 billion in spending in their winter and summer seasons and $1.15 billion in total state and local taxes. This years snow total winner was Brighton Resort with 632 inches of snowfall.

A new economic impact study by Y2 Analytics released last week shows that an estimated 71,638 people attended some part of the 11 day January Sundance Film Festival in Park City, Salt Lake City and the Sundance Resort. Y2 estimated that this years festival generated an estimated $151.5 million in economic impact in Utah. It supported 2,778 jobs and generated $14 million in state and local tax revenue, up from $8 million in 2016. It is interesting to note that attendance was nearly evenly split between Utahns and non-residents and only 14.5% of attendees work in the entertainment industry. The top five states for out-of-state attendees were California, Illinois, Nevada, New York and Pennsylvania.

Tags: Bonanza Flats news, $38 million Bonanza Flats purchase closes, Record skier days for Utah in 2016-17, Sundance Film Festival's economic impact at record leves in 2017
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THAT NEW CAR SMELL, PART 2

By Jim Lewis

May 12, 2017

In this post I would like to continue my analogy that luxury car sales demonstrate why new luxury condo product coming to market now in Park City deserves a premium to the luxury product constructed 10-12 years ago.

Why did last seasons visitors seem to prefer the product offered by Apex and Lift to the older product in Canyons Village and Deer Valley? Since construction is just underway at Apex and not even started at Lift, What was the game changer for buyers? First of all, the past few years have produced a huge change in the ski industry with Vail re-inventing the economics of resort operation and development. No longer does operations take a back seat to real estate development for profits. Now last years sale of 650,000 Epic passes produces reliable profits for Vail's connected array of top ski resorts with little dependence on individual resort weather conditions. Recently a new collection of 12 leading ski resorts put together by Aspen Skiing Corp and KSL Capital Partners announced plans to build a similar competitive network built around seasons pass sales. Operations are now king and resort owners seem happy to avoid loading up on development debt and happy to off-load vertical construction and sales to developers like Replay Resorts and East West Partners. As I discussed in my July 6, 2015 uncategorized post entitled "Whats going on with Vail's new resort and how does it affect The Colony" Replay Resorts, who was selected as the master developer for the Canyons Village, introduced a fundamental philosophy that departed from past development thinking in the Park City market. Replay de-emphasizes on-site amenities in favor of natural beauty and existing attractions of the area. They believe that becoming an extension of the surrounding community and vice versa is a far more cost effective way of establishing a destination than building attractions inside the gates. Now we see this philosophy at work in the new Lift project which is Replay's first individual project in Canyons Village. Lift was launched on Feb 7th and currently 54 of the 61 units have been reserved and conversions to contract are underway. So lets assume in my "new car/used car" analogy that Lift units are like next years fuel efficient product not yet available to drive, but taking orders for future delivery (think Tesla Model 3 and Elon Musk). The 2005 - 2007 Talisker Club units are like the gas hungry luxury SUV's of the past that now occupy the front row of the used car lot, and the luxury hotel condo product like St Regis and Montage along with new contemporary townhouses on Main Street like Parkite and 205 Main can be seen as whats on the floor in the showroom at the end of a model year.

In 2005, the stacked flat projects in Empire Pass were the latest thing. They had direct ski access, quality finishes and in addition to minor amenities in each project (each project has a different personality) they all shared in membership to the Talisker Club which offered members access to ski and golf facilities plus fly fishing and other club activities. They also came with monthly dues plus market prices for food and fun. When an owner added HOA dues to club dues, it was a costly annuity. Since renters could not utilize club facilities, the only rental season was ski season. Empire Pass was a beautiful but lonely place in the other seasons. With many high split property managers competing for nightly rental business, owner returns were often less than HOA dues, Club costs and taxes combined. At the same time, the product was difficult to manage efficiently by the high profile management companies and slowly VRBO and one-off competitors chipped away at the business. The Talisker Club lost big money for Talisker through its attempts to offer first class service to very demanding members. Club facilities were overcrowded at prime times or empty at slow times. The original Park City government decision to allow almost no parking in Empire Pass other than in-building owner parking hurt club business and a free shuttle service largely for the benefit of renters operated by the Empire Pass Master Association resulted in an additional annual dues bill of about $3500 for each owner. Many owners chose to resign their Talisker Club membership rather than pay dues and add the $100,000 membership fee to their closing expense (owners were paid an 80% deposit refund within 60 days after closing), but many buyers who didn't see value in the club expense made offers that excluded the membership. Since resigned members in the waiting line either by choice of by terms of their resale were only paid their deposit on the basis of 1 refund for 3 developer sales, the line grew as development slowed and many members have been in line for years.

Now contrast that with the product being offered by Apex and Lift, Together with minor, but well done amenities like pools and fitness facilities, both projects take full advantage of Replays makeover of the Canyons Village base area which will have all season restaurant locations, nightlife, shopping and a connection to the Park City base area via the $50 Million Quicksilver Gondola completed last year by Vail Associates. At the Lift, units come fully furnished. Buyers will avoid working with individual designers who created individual decor at Empire Pass at luxury prices, product that now has little value in resales. This plan also contributes to a more standard rental product. In the last 12 years resort condo fashions have changed. Buyers seem to be looking for more windows, more light, expanded kitchens with more counter space, clean modern design and furnishings plus more emphasis on children's amenities. At Lift and Apex, the developers see their buyer profile as quite different from the Empire Pass buyer profile of 12 years ago. In 2005, the perfect buyer was someone who was rich and wanted to create their very individual second home where the owner and their friends and family could return every year to recreate the experience of previous years. Rental was an afterthought but tax write offs were important. Today developers see a new profile. They see younger buyers who want to experience different ski resorts, different communities and meet new people. These buyers want a lively, memorable all season experience and low ownership costs and rental income are important. In the last 12 years, the product and club amenities of the past have simply gotten older and a little out of date while the existing attractions of the Park City area continue to improve and expand. So now the question becomes how to compensate for these differences. The simple answer is price. The significant fact is that the "sticker price" (price/SF) of the new cars being ordered for future delivery which promise lower ownership costs, better rental potential and 4 season performance are being priced at significantly less than the used cars on the front row of the used car lot. Last season provides proof that new development prices are attractive to today's buyer and today's resale prices for the best used product are meeting heavy resistance. Even the luxury full service product offered at Montage and St. Regis whose prices are supported by far superior net rental performance than the Empire Pass stacked flat product, are quietly lowering end of ski season prices. Last month Montage lowered its remaining 17 developer units by an average of 6.6%. New contemporary town homes on Main Street are quietly lowering prices based on buyer resistance and lack of proven rental performance. Original prices at the 205 Main project were recently reduced by an average of 5.85%, but are still at substantially higher prices than the Lift and Apex units reserved to date. Second tier hotel condos like Waldorf Astoria have recently offered 3rd and 4th floor residences at prices below $650/SF with 12 months paid HOA dues.

Hopefully this message won't be misinterpreted as encouragement to raise prices of new product. Lift itself shows price resistance in prices above $1,000/SF for its Penthouse units. The message is that condo inventory in Empire Pass is substantially overpriced. At the right price Empire Pass properties will fly off the shelf, but the journey for current sellers will be painful.

Tags: Apex and Lift vs Empire Pass condos, Why new condo product is selling, Why older condo product is not selling, The new condo buyer profile, recent quiet reductions in luxury condo list prices
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THAT NEW CAR SMELL

By Jim Lewis

May 09, 2017

A short time ago the Park City Board of realtors released the 2017 Q1 statistics. Q1 is usually our slowest quarter, but not this year. Single Family Homes have been the most active segment of our market. Overall there was a 23% increase in homes sold vs Q1 2016 (231) and a 39% increase in volume ($319,871,889). The Park City limits and the Snyderville Basin both showed a 22% increase in quantity sold. Park City's volume was up 22% to $106,068,548 and the Snyderville Basin increased 29% to $123,371,655. Prices of single family homes continued to rise. The median price of single family homes sold in the first quarter increased to $2,090,000 within Park City limits, and to $987,000 in the Snyderville Basin. The Heber Valley was relatively stable with volume of $30,283,550 and a median price of $435,000. Condominiums were even more interesting than single family homes with Park City volume up 117% to $150,807,606 and quantity sold up 71%. Median price was up 26% to $929,500. That dramatic increase can be attributed to long awaited closings of Stein Eriksen Residences after several years of construction. The Snyderville Basin reported activity was relatively stable with volume of $46,145,219 and median price of $641,500. I believe the Board of Realtors Q1 numbers DO NOT reflect what is really happening in our market. Why? because the report ignores the reservations and contracts entered into by buyers for new projects. Just as the decisions made by buyers 3 years ago to enter into contracts to purchase Stein Eriksen Residence units are now affecting 2017 Q1 data, the buyers from our just completed ski season made it clear that new condo product was their choice over older condo resales. To show that effect, I looked at what was missing from the condo sales reported at the Canyons in Q1. That report showed 32 sales with an average price of $923,380 for a total volume of $29,548,145 - a 7% decline from Q1 2016 - not very impressive in terms of the "Vail Effect". But what happens if we add the dollar volume and quantity contracted for or reserved (buyer purchase decisions) for just two of the new Canyons Village projects?

Reported sales: Quantity Sold - 32 $ Volume - $29,548,145 Avg Sale Price - $943,380

Apex (contracts) 34 $75,529,000 $2,221,441 $795/SF

Lift (reservations) 54 $65,095,000 $1,205,463 $818/SF

Revised Total 120 $170,172,145 $1,418,101

I realize that treating reservations and contracts in Q1 as sales in Q1 is imprecise, and leaves out other similar but smaller projects. This broad estimate of total activity may make MLS rule makers frown, but it does better reflect what we experienced in terms of activity in the Canyons village in Q1. In fact it may be conservative since it does not count the back up offers behind current reservations. These modified numbers would have resulted in a report that said the quantity sold was +316% vs. (16%), volume sold was +535% vs. (7%), and the average sale was +139% vs. (8%).

These numbers should give owners of older resale condo's food for thought. As an example the 8 resale condos at Arrowleaf in Empire Pass built in 2007/2008 have asking prices averaging $1,052/SF, 6 resales at Silver Strike Lodge average $1,013/SF and 9 resales at Grand Lodge average $1,037/SF. The simple truth is that a new Mercedes sells for more than a 2007 Mercedes of the same model no matter how well the older vehicle has been maintained and how few miles on its odometer, The next question to be answered is why the new luxury product coming to market today deserves a premium to the luxury product of the 2005-2008 boom years. Stay tuned.

Tags: What Q 1 Park City statistics really mean, New construction premium in the Park City condo market, Strong Q 1 Park City single family home sales
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LETS GET READY TO RUMBLE!

By Jim Lewis

Apr 15, 2017

A new Aspen Skiing Company - KSL Capital Partners alliance started an eventfull week with a $1.5 Billion purchase of Intrawest Resort Holdings ski areas, including Winter Park and Steamboat in Colorado, Blue Mountain in Ontario, Mont Tremblant in Quebec, Stratton Mountain in Vermont and Snowshoe in West Virginia. That was followed a few days later with the purchase of Mammoth Resorts including Snow Summit, Bear Mountain, and June Mountain. These 4 resorts have 6,000 acres and about 2 million visits a year. No price was announced. KSL Capital Partners also owns Squaw Valley and Alpine Meadows in California. Aspen Skiing Company manages Aspen Mountain, Aspen Highlands, Snowmass and Buttermilk which will all remain privately owned by the Lester Crown family of Chicago.

So who are these masked men who choose to challenge Vail Resorts dominance in seasons pass sales? KSL Capital Partners is generally funded by a combination of public, state and corporate pension funds, private and university endowments high net worth individuals, fund of funds and other financial institutions.

What does the new partnership seem to believe? Eric Resnick, the Chief Executive of KSL Capital Partners has said that the new partnership is NOT about real estate development. They are focused on operations with seasons pass revenue the financial engine. They believe today's skiers are looking for a variety of experiences and want to see more places and try different slopes. With 12 ski resorts and about 7 million skier visits a year, they plan to compete with the industry changing Epic Pass program that Vail Resorts has built to 650,000 pass sales in the past year. It is also interesting to note that KSL Capital's portfolio also includes the Outrigger Hotels and Resorts with 6,500 rooms in Hawaii and the South Pacific and an association with East West Partners - a familiar name in Park City development.

There is no doubt that the previously undisputed dominance of Vail Resorts now has strong competition. Since Vail Resorts arrived in Park City, it has often been described as the 800 pound gorilla and undoubtedly had its eye on Mammoth, but will certainly respond to the new competition. Vail Resorts is coming off a very successful ski season in Park City and has done well in establishing good community relations here. The most recent example was last weeks announcement that Rob Katz, the CEO of Vail Resorts, and his wife made personal contributions totaling $1.6 million to eight local non-profit organizations in the communities where the Company operates. That donation includes a $250,000 contribution to the Park City Community Foundation to assist in launching the "Communities That Care" program as part of a larger initiative focusing on mental health for 4200 teens in 3 Summit County school districts, grades 6-12. Effective community engagement and a headstart in the technology that makes the Epic Pass system tick should keep Vail Resorts in the lead.

I'm reminded of the old Japanese versions of the early King Kong movies where King Kong battles Mothra ( and other opponents) with many miniture buildings trampled in the process. As spectators in the coming contest, its not so much who wins as hoping we don't get stepped on as the battle moves forward. I believe this shift in the ski industry will have major implications for the future direction of real estate development in Park City and the future value of resales of our existing resale inventory. Stay tuned.

Tags: Aspen Skiing Company, KSL Capital Partners, Intrawest Resorts acquisition, Mammoth resorts acquisition, Vail Resorts Epic Pass program
Posted in Uncategorized, Vail News | 0 Responses to "LETS GET READY TO RUMBLE!"

WHAT IS ALL THIS PROSPERITY FOR?

By Jim Lewis

Mar 11, 2017

"Having lost sight of our goal, we must redouble our efforts" is an old statement that seems to fit Park City in the Spring of 2017. Prosperity in many forms has arrived and the nations richest small town (see my Oct 1, 2015 uncategorized post entitled "THE RICHEST SMALL TOWN IN AMERICA") is only getting richer. The newest residents and the oldest residents seem to agree that what we have now is a well run city and a nice place to live. Everyone sees that traffic problems, affordable housing, and many other issues need work, but if you look closely, progress is being made. One example of such progress is the Main Street Plaza project at the southern end of Main Street that will replace the Brew Pub parking lot. This $7,000,000 project will include green space, rest rooms, kids play area and a water feature. Its purpose is to ensure (along with other small Main Street projects) that the Old Town business district remains competitive with outlying commercial areas. This project will probably start construction in the spring of 2018 and take 8 or 9 months to complete - good for business, good for Old Town residents and good for visitors. At the same time, we are facing a new challenge in the acquisition of the 1,350 acre Bonanza Flats parcel. After voting in a $25,000,000 bond, we are now raising $13,000,000 more to complete a $38,000,000 purchase. So far Summit County has pledged $5,750,000 and $1,845,000 has been raised from non profits, foundations and over 1,500 individual donors. I have no doubt the full amount will be raised by the June 15th deadline. This experience involving taking decisive action to preserve what the community values should be a guide to solve a "kick the can down the road" project that came to life in 1980. The Treasure Project which involves 1,000,000 square feet of commercial development on the hillside overlooking Old Town has been in active discussion since 2004. Endless meetings and the constant turnover of planning commissioners have created a never ending circus that gathers data and public input that is always overtaken by other events. Now after so many years and so many meetings the Treasure Partnership intends to force the Park City Planning Commission to vote on the project next October. If that happens, any decision will be appealed, but not to the Park City Council who have removed themselves from that position. Everyone knows that this project, if attempted, will ruin Old Town, and very probably bankrupt the Developer since in today's world it really has no economic viability. We should look to our recent Bonanza Flats experience and arrive at an appropriate price to purchase the Treasure Partnerships interest. That is the only way to preserve the very delicate , somewhat imperfect balance we have today. Occam's razor is a principle that can help guide our thinking on resolving this situation.

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2016 PARK CITY UTAH REAL ESTATE STATISTICS - CLUES TO NAVIGATING 2017

By Jim Lewis

Jan 28, 2017

Strange Days Indeed: After 53 inches of new snow, 50,000 Sundance visitors, and 8000 participants in the Women's March down Main Street, there was a noticeable lull in real estate activity. There were 41 pended sales reported by the Park City Multiple Listing Service in the week ended 1/27/17. 26 closings and 56 new listings were reported during that week. It took most of the day to get to the post office and stand in the Starbucks line for coffee, but the powder skiing attracted more local interest than the movies. Amnesia seemed to be a major problem - the most popular answer to the question "can you please move your car?" was "Do you know who I am?" Hopefully many of our visitors noticed the beauty and good times all around them and will return for a more leisurely look at our little community. After last week's post which was mostly devoted to bragging about what a strong real estate year we had in 2016, further examination of the details revealed some interesting situations. To show why there really is no answer to the question "Hows the Park City real estate market?", you can focus on our absorption rate by area and price. Within the city limits, condos priced less than the $685,000 median price sold in an average of 3.4 months while those priced over $685,000 sold in an average of 13.9 months. Looking at the Snyderville Basin and Jordanelle areas where the median condo price was $474,650, sales below the median took only 1.5 months and sales above the median took 6.1 months. In town single family home sales below the $1,691,600 median price took 4.7 months and sales above the median took 16.7 months. In the Snyderville and Jordanelle areas, the median price is now $970,000 and single family home sales below that figure took 3.1 months to sell and sales above the median averaged 11.6 months. Although available inventory in some key areas like Park Meadows are severally depleted, other areas seem to show increasing inventory and are meeting price resistance. The first area of note is Empire Pass in Deer Valley where condo sales were down 32% from 2015, average prices were down 12% and median prices were down 17%. If the 5 2016 sales and 20 listings at Montage Deer Valley are removed that leaves only 14 2016 sales, but 46 active listings that average only $881/SF and those listings represent some of Deer Valley's best ski access. Although I can't prove it, I believe the clouds surrounding the Takisker Club for the past few years have had a major negative impact on the units built in Empire Pass from 2005 - 2008. Several factors lead me to believe that Empire Pass resales represent some of the best opportunities now available in the Park City luxury market. First of all the clouds are lifting at Talisker Club. The club is moving forward into the final phase of receivership and launching an advertising campaign to reintroduce Talisker Club to the Park City community. The public website - http://www.taliskerclub.com - has been upgraded and contains information on the changes that will add a big plus to Empire Pass property ownership. Last season and so far this season is proving that the "Vail Effect" extends beyond the Park City Resort. After planning for an 8% skier day drop off in 2016 to account for new Epic Pass competition, Deer Valley instead experienced a 7% increase. The early success of new condominium projects in Empire Pass and Canyons Village shows that current Empire Pass resale prices are undervalued. The 27 unit One Empire Pass project now under construction already has 15 reservations at prices over $1,300/SF or about a 30% premium over Empire Pass resale inventory where no delayed gratification is required. Pre-sale prices of new projects at Canyons Village are showing only slightly less per SF numbers with construction in the very early stages or scheduled to begin later in 2017.

The second luxury property niche that seemed buried in the Old Town statistics was the contemporary new construction condominiums being built above the retail level on Main Street. After the 820 Park Ave project was completed and sold at around $900/SF, 27 other similar units in 5 separate projects have recently been finished and listed at an average of $1,118/SF (prices range from $901/SF to $1,652/SF). DOM now range from 28-322 and the first 4 sales appear to involve discounts prior to completion. The question to be answered this season is "Why does living over the store on Main Street justify prices equal to, or greater than, prime Deer Valley ski access or full service luxury hotel service and amenities at Montage, St. Regis or the new Stein Eriksen Residences?" If you figure out the answer to that question, please share it with me.

Tags: 2016 Park City real estate statistics, Empire Pass update, New contemporary condos on Main Street
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ELECTIONS MATTER!

By Jim Lewis

Nov 12, 2016

Elections matter as we noticed last week and now everyone seems to be trying to figure out "where do we go from here?". Although most of these questions are above my pay grade, I do have some thoughts about a few real estate related issues. Its been awhile, or maybe never, since we had a President whose favorite asset class is real estate.

Back in October of 2015 I wrote an uncategorized post entitled "The Richest Small Town in America" where I discussed how Park City, Utah moved from an almost ghost town to being selected by Bloomberg News as the richest small town in America. This 55 year journey started with a federal program to fight rural poverty which allowed Park City to start it's ski industry. Lots of small steps followed like our first stop light and larger steps like starting a film festival that grew to be the Sundance Film Festival and building infrastructure to host many of the 2002 Winter Olympics events. Today's news is is all about the amazing results of that journey, but forgets the process that made them possible. It's a process that Donald Trump as a developer does understand and most politicians don't based on their short term focus on reelection. I'm talking about rebuilding the crumbling infrastructure in our inner cities and rural areas. In a recent WIRED article by Alex Davies - https://www.wired.com/2016/11/trumps-plan-american-infrastructure-get-people-spend-trillion-dollars/ the author reports that the American Society of Civil Engineers gives U.S. infrastructure a D+ and estimates the country would have to invest $3.6 trillion to patch it all by 2020, The article goes on to discuss the returns possible for undertaking projects needed for roads, bridges, waterways and cites an interesting Oct 27, 2016 paper by Wilbur Ross and Peter Navarro (Trump policy advisers) entitled "Trump Versus Clinton On Infrastructure". If you are a policy wonk you might enjoy some in depth reading on the subject, but it struck me that building and rebuilding our infrastructure here in Park City and surrounding areas over many years while infrastructure in most locations was deteriorating , was what got us to where we are today. We always saw our yearly snowfall as the most important contributor to our economy, but it was really the road construction and other infrastructure work that we complained about while stuck in traffic glaring at the well paid road crew. I submit that we are a very small example of, and proof that this idea works. In addition to what we have experienced in the Park City area, we see many more examples throughout Utah where much larger road, light rail and our new $1.8 billion airport project now underway have led Utah to it's state economy being ranked number 1. Yes, I know President Obama ran into stiff resistance from a Republican Congress in his efforts to rebuild infrastructure and I know Mitch McConnell has said rebuilding the nations infrastructure is not a high priority, but maybe doubters will be in for an attitude adjustment.

Tags: Trump and rebuilding U.S. infrastructure, What made Park City Utah the richest small town in America
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CABIN FEVER IN PARK CITY, UTAH

By Jim Lewis

Nov 16, 2015

In Park City, how are "cabins" defined, who has them, and how different offerings compare.

In Park City, "cabin" was a designation first applied to developer built single family residential product at gated communities prior to the unpleasantness associated with the recession in 2008. The leader in the original cabin product was Promontory, The Ranch Club which featured Ranch Club Cabins, Golf Club Cabins, and Dye Course Cabins which were generally 3-5 bedrooms, 3,600-6,000 SF. These were basically standard floor plan luxury second homes located in clusters close to Promontory amenities. Today these units resale for $1.5-$2.4 Million or $400/SF-$550/SF and compete with single family homes in all Promontory neighborhoods. This product has now all but disappeared as new construction.

The smallest cabins pre-2008 were the Trappers Cabins, which were 2,200-2,700 SF, 3-4 bedroom units built to serve the low end of the second home market with prices below individual single family homes and were originally priced under $1 Million. Resale prices today are roughly $1.2-1.5 Million or about $450-$550/SF. http://www.tohttp://www.tourbuzz.net/public/vtour/display?idx=1&mlsId=257&mlsNumber=1252704urbuzz.net/public/vtour/display?idx=1&mlsId=257&mlsNumber=1252704 . This pended sale at 2941 Quick Draw is a 2,205 SF, 3 bedroom, 3 bath unit built in 2015. Trappers Cabins were the first of what is now known as "cabin product". At Promontory, Trappers Cabin sales were a significant share of developer sales during the recession and remain strong today. 14 Trappers Cabins have sold in the past year priced from $1,055,000 - $1,621,454. A similar product at Tuhaye did not survive the recession, but 2 other projects have recently created a cabin product and Promontory has made a big design and location change for an additional cabin product.

The most successful recent competition to Promontory has come from the reinvigorated Victory Ranch project which introduced a 2,800-3,300 SF, 4 bedroom cabin priced from $1,250,000 - $1,850,000. The new Victory Ranch product has produced 21 pended and closed sales in the past year. The $450-$550/SF price is directly competitive to Promontory prices and HOA dues are similar. Golf and fly fishing are the featured amenities. 6721 E Riparian Way #141 is an example of a 3,337 SF, 4 bedroom, 5 bath pended sale with a list price of $1,680,000 ($505/SF) which is now under construction (model unit shown in video). http://www.touhttp://www.tourbuzz.net/public/vtour/display/301323?idx=1rbuzz.net/public/vtour/display/301323?idx=1 . A smaller project - High Star Ranch - introduced an attractive cabin product at under $600,000, but now prices have moved to $775,000 - $795,000 ($352/SF - $364/SF) for 2,200 SF, 3 bedroom, 4 bath units. Amenities are focused on Equestrian activity with HOA dues at $200/month and no club membership. 4 units have been pended or closed in the past year. 937 Cabin Way listed at $775,000 is a 2,200 SF, 3 bedroom, 4 bath cabin which is currently a model unit for the project. http://www.tohttp://www.tourbuzz.net/public/vtour/display?idx=1&mlsId=257&mlsNumber=1276900urbuzz.net/public/vtour/display?idx=1&mlsId=257&mlsNumber=1276900 .

Promontory has introduced a new product in a new location coinciding with the completion of the Jack Nicklaus clubhouse. The Promontory Nicklaus West Phase 1 units are 2,500 - 2,750 SF, 3-4 bedroom units priced from $1,360,000 ($535/SF) to $1,460,000 ($529/SF). The spectacular course and clubhouse are open, but these cabins are the first vertical construction in this area. 6434 Golden Bear Loop West is a 2,543 SF, 3 bedroom, 4 bath unit listed at $1,380,000 ($543/SF) and is now under contract for completion in 2016. hppt://www.touhttp://www.tourbuzz.net/public/vtour/display/409464?idx=1rbuzz.net/public/vtour/display/409464?idx=1 . HOA dues and membership amenities are the same as other Promontory areas. The architecture is contemporary and very different from other Promontory developer product.

The new "cabin product" seems to be attracting increasing interest from buyers who could afford even higher priced product. Many of these buyers prefer to have top quality properties in multiple locations rather than a single over-sized and lightly used property in one location. They also prefer to avoid the hassle and delay of custom home construction and are surprisingly sensitive to high carrying costs. We are also seeing more younger buyers who see cabins as second homes, not vacation homes.

Tags: Promontory cabins, Trappers cabins at Promontory, Nicklaus West Phase 1 cabins at Promontory, Victory Ranch Cabins, High Star Ranch cabins, Park City cabin price comparisons
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