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February 09. 2012 11:43PM

Privatization plan for Cannon Mountain brings out passions

CONCORD — Supporters and opponents of leasing state-owned and operated Cannon Mountain ski area in Franconia Notch State Park spoke before the Senate Energy and Natural Resources Committee Thursday.

Setting the groundwork to lease the mountain to a private business is unnecessary and would strip away parts of the state's flagship park for private operation, said opponents of Senate Bill 217-FN.

But supporters of the bill said it could reduce the state's financial risk during bad snow years, eliminate reinvestment costs and give millions in revenue to parks.

“I understand there is a lot of passion in this room today,” said state Sen. Jeb Bradley, R-Wolfeboro, who sponsored the bill. “It's a gorgeous mountain. We all love it. It is the jewel of our state park system.”

Opponents of the lease portion of the bill outnumbered supporters at least 5 to 1.

Bradley said that while the state operations are now profitable, the weather can change that and when debt is entered into the equation, the mountain is not profitable. With looming capital expenditures and upcoming investment costs, he said the idea of looking to the private sector to see if there is interest is worthy of consideration.

He argued in favoring of setting up a two-step process to first seek private requests for information on leasing interest and then if interest on both the private and legislative side existed to look to developing a lease. The bill would also ask the state put out the Cannon requests for information every two years.

The bill also seeks to rename Franconia Notch to Veterans Memorial State Park, to establish a summer hiking trail and clean up recent clearing work on abutting trails at Mittersill.

Kelly Weiser of Campton, who opposes the lease and appeared on behalf of 32 mountain pass holders, said she found it offensive that the bill was comingled with the issue of a veterans memorial. She called it a “blatant attempt to combine … our veterans' sacrifice and service to our state and this nation” with a ski operations bill.

In 1998, the state agreed to lease Mount Sunapee. A base payment and 3 percent of gross goes to pay down Cannon's improvement debt, plus a base fee.

With future snowmaking costs, new lodges and lift upgrades on the horizon, “I think it is high time we have this discussion on who is going to assume all these costs,” Bradley said. He said a lease would not include development of condos.

Among those providing written testimony opposing the bill was Gov. John Lynch, who has opposed condo development on adjacent land at Mount Sunapee.

Pete Stevens of Franconia said leasing Sunapee has at least cost the state thousands of dollars in legal fees.

He said he called the Attorney General's Office about the suit between the governor and Sunapee and found 3,500 legal hours have been spent on the case, and at $125 an hour that amounts to $437,500.

Dan Harmon of Hollis said he is a Sunapee season pass holder and a frugal taxpayer and supports the lease concept for Cannon.

“I have seen quantum improvements,” at Sunapee since the lease “and have sadly not seen the same at Cannon,” he said.

He showed data that indicated ski area visits at Sunapee have soared from about 100,000 to almost 300,000 skiers a year since the lease, and Cannon has maintained at just over 125,000 annual visits.

He said if Sunapee's lease arrangement was the same at Cannon, the state would have received about $8 million more over the past 11 years.

But Karen Irwin said the state has actually lost money on the Sunapee lease, and research will show it is not financially advantageous when bonding is considered.

She said this was her ninth time testifying against leasing. None of the past attempts has succeeded.

She presented a petition with 420 names opposing the lease.

Jeremy Clark of Ashland, who supports the bill, noted a $2.6 million double chair for Mittersill, installed last year, has not been opened a single day this year because of a lack of snowmaking.

He said if debt payments and depreciation were included, Cannon is losing money.

“Depreciation is tracked at a state level,” he said, so those numbers are not included in the Cannon flow charts.

Profit and loss information for July 2010 through June 2011 show a net income of $1.2 million.

Commissioner of Resources and Economic Development George Bald, who would be directed to send out requests for information if the bill succeeds, said renaming the park would add to confusion and costs.

He said he would be willing to write a letter of agreement to take care of the other concerns in the bill, including the hiking trail in summer and cleaning up demolition debris, but the leasing was something he did not feel was in the state's best interest.

“This is a different situation than Sunapee. That was a stand alone operation completely separate...in the case of Cannon Mountain, it is an integral part of Franconia Notch State Park and it doesn't easily pull itself away.”

He said the staff has done a fabulous job providing a quality product and customer service and that the repeat issue of leasing “hangs over the employees at Cannon.”


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