All Sections
Welcome guest, you have 3 views left.  Register| Sign In

Home | Business

Balsams Resort developer says patience is key to success

By MARK HAYWARD
New Hampshire Union Leader

July 18. 2015 9:47PM
Les Otten hopes his plan to resurrect The Balsams Resort in Dixville Notch will eventually bring 1,800 jobs to the region. (Courtesy)

Les Otten didn't waste much time getting back to business after departing American Skiing Company.

In the fall of 2000 - as he was losing control of American Skiing - Otten started assembling a financial team, Longball LLC. He lured John Henry and Tom Werner, the two top investors in the purchase of the Boston Red Sox in 2002. It helped that Otten himself owned a share of the Sox when the team won the World Series in 2004 and 2007.

Through the 2000s, he acquired stakes in companies that market equipment to analyze a golf swing, manage loyalty systems for airlines and credit card companies, consult on renewable energy, market vacation real estate in Maine and install wood pellet-fired boilers through Maine Energy Systems.

Maine Energy Systems is the No. 1 seller of renewable energy boilers in New Hampshire, Otten said recently.

And he is affluent enough that he lent $2.6 million to his campaign for Maine governor, where he placed second in the Republican primary, behind current Gov. Paul LePage.

But Otten is best known for Sunday River and the rise and fall of American Skiing Company.

"He had a $244 million education," said John Vogel, a professor of real estate at the Tuck School of Business at Dartmouth College. "Too often, we think we want to hire people who have only succeeded. I kind of like to hire people who have had a few failures who learned from them."

Otten said if he could redo one decision, it was to take American Skiing public. In the late 1990s, Wall Street had fallen in love with the idea of packaging ski areas together, he said.

But stockholders wanted quick profits. Otten said it took him 17 years to build a ski resort company, and stockholders wanted out after three.

"I don't believe the ski industry at that time was mature enough to be publicly traded," he said.

In 1980, Otten and a few investors bought out Sunday River, where he worked as general manager for eight years, according to the Ski Museum of Maine website. He grew the resort from 30,000 annual skier visits to one of the largest resorts in New England, accommodating 600,000 annual skier visits by the mid-1990s.

His company acquired three other ski areas, and a merger with SKI Ltd. in 1996 put five other New England ski areas under his control.

The new company, American Skiing Company, was so dominant that the U.S. Department of Justice forced the sale of two New Hampshire ski areas - Cranmore and Waterville Valley, according to NewEnglandSkiHistory.com.

Otten created a great ski experience, Vogel said. He cut new trails, added high-speed lifts, and the mountains were never crowded, Vogel said. He built slopeside hotels and pioneered quarter-shares. Otten said he offered learn-to-ski programs and pushed parabolic skis, which made skiing easier for thousands.

The company went public in late 1997, raising $244 million in the intial stock sale. It celebrated by acquiring three ski areas in the western United States.

The stock reached $18.25 in value shortly after its issue, but soon fell dramatically. In 1999, the company took on equity investors. In March 2001, Otten left as board chairman and chief executive, departing with two years of his $400,000 base salary and a company car valued at $20,000.

By 2003, the stock was trading at 8 cents. The company went out of business in 2008 after selling off the ski areas.

Vogel said American Skiing ended up with too much debt, which proved unwieldy once a couple of bad snow years hit along with the recession.

Otten stressed that the company never went bankrupt.

"All of the debt was paid, all of the employees were paid. Not one creditor, bank or bondholder lost a penny," he said. Of course the stock, which was Otten's main investment in the company, became worthless.

Had American Skiing held on to the resorts longer, the ownership could have gotten a better price, Otten said.

"I wasn't involved in anything that happened after March 2001," he said.

Otten said his equity investors in the Balsams redevelopment realize there won't be a quick turnaround investment.

"We have a very, very solid financial plan," he said.

Vogel said it shouldn't be hard for Otten to attract investors. Returns on the bond market are virtually zero, and the stock market is at record highs, so there is a lot of capital looking for investment opportunity. And the Balsams has an intangible allure.

"It's a fun investment," Vogel said. "It's a whole lot more fun to own a world-class resort than stock in Campbell Soup."

mhayward@unionleader.com


Business General News Manchester


More Headlines

GOP tax plan: What's in, what's out

Aggregation