A Royal Opportunity

What is the future of Royal Gorge, America’s largest cross-country ski area, after bankruptcy?

By Tim Hauserman

At Royal Gorge Cross-Country on Donner Summit, you can wind your way past the Snow Mountain hut to the jaw-dropping views from Point Mariah, ski along the edge of the ridge on Stage Coach, or catch the prevailing winds and fl y across the flats of Van Norden.

For 40 years, Royal Gorge has given Nordic aficionados something to smile about. But in August, after the owners of Royal Gorge defaulted on a $16.7 million dollar loan, a receiver was appointed to maintain Royal Gorge’s assets and prepare the 3000-acre property for sale.

What does this mean for the future of one of America’s largest cross-country ski areas?

David Achey, general manager of Royal Gorge, is optimistic. “We are definitely open this winter, six days a week, seven on holidays,” he says. “We haven’t withered away. The receivership has made it quite clear that the importance of keeping the ski area they will give Royal Gorge the resources necessary to make this a great season. It has been very positive. We’ve had guys painting, doing maintenance, summer trail work, looking into signage and maintaining the grooming fleet.”

Royal Gorge is also announcing that for the first time this year you will be allowed to take your dog out onto some of the trails. The Wells-Fargo-Emigrant trail loop near Summit Station will be available for dogs on Monday, Tuesday and Thursday. If the program is successful, Achey says they may expand the network of dog-friendly trails.

Tom Olson, managing director of brokerage services for the receiver of the property, Douglas Wilson, confirms Achey’s assessment. “(We’re) working to keep all the operations in place. We will try to do it in a way that maintains the value of the property. We want the community to be happy with the way it is run.”

But what is the long-term prognosis for Royal Gorge?

Olson says that the receiver’s task is to intercede while the lender and borrower are working things out. The receiver is a neutral party whose task is to maintain the asset and market it for sale.

“We are going ahead to market the properties with a price of $24 million, all cash at close of escrow,” Olson says. “In addition to Royal Gorge Ski Area, which includes some 3000 acres of land, the Summit Station and other buildings, the offer includes 300 residential acres above Donner Lake in Negro Canyon, and Rainbow Lodge, which includes 114 acres on the Yuba River.”

“The properties need to be sold as a group,” Olson adds. Ice Lakes Lodge, sitting on the edge of the Serene Lakes and adjacent to Royal Gorge trails, was also part of Royal Gorge until fairly recently, but it is not included in the sale.

Olson said the property will be marketed internationally. Cross-country and downhill ski resorts throughout the world, as well as potential buyers who may be interested in the conservation potential of the property, will be contacted.

“The judge wants to know that every rock has been turned over looking for a buyer that will pay the most for the property,” said Olson.

One group that has expressed interest in the property is the Truckee-based Truckee Donner Land Trust. “We have been interested in the property since our founding in 1990,” says Trust Executive Director Perry Norris. “The Royal Gorge property as a whole would be a perfect fi t for our organization — it has high natural resource values, recreational values, scenic and historic values.”

If the Trust acquired the land, Norris says, the plan would be to continue to operate it as a XC ski area through a operating partnership with the neighboring Sugar Bowl downhill ski resort.

“The ski area is an international destination for Nordic skiing and it needs to continue. Keeping the ski area thriving is an extremely high priority for us for both conservation and economic reasons. Sugar Bowl is interested in operating the ski area. We would really look at a partnership with them to run the area. They have the equipment and the expertise. They don’t do things for the short term. They have the right mindset that a conservation organization would want to work with.”

An additional potential public benefit is that the Donner Lake Rim Trail, built by the Truckee Donner Land Trust, goes through Negro Canyon, and the land trust owns 280 acres in Negro Canyon which border the 300 acres owned by Royal Gorge.
How did we get here?

In 1971, John Slouber started Royal Gorge Cross-Country Ski Area. Over the years he slowly expanded it to several thousand acres, built surface lifts and purchased Rainbow Lodge. His efforts turned a humble idea into North America’s largest cross-country ski area. He created a place with a tremendous variety of awesome cross-country ski terrain and ample snow within easy reach of the Bay Area and Sacramento metro areas.

While during Slouber’s reign Royal Gorge developed a reputation among Tahoe locals as being less friendly than the competing cross-country ski areas in Truckee and Tahoe City, no one could dismiss the great skiing at Royal Gorge.

In 2005, Slouber sold Royal Gorge to Kirk Syme and Todd and Mark Foster for a reported $35 million dollars.

Given the economics of cross-country skiing, $35 million is a lot to pay if you are just selling trail passes. The Fosters and Syme bought the property with the intention of creating a unique cross-country ski resort development, with approximately 900 homes and condos in several “camps,” as well as commercial development.

Before they could get the concept off the ground, the developers ran smack into a freight train full of problems:

First, there were difficult to solve questions about whether there was enough water or sewage capacity for all that development.

Secondly, since the Serene Lakes/Royal Gorge area is only accessible via one two-lane road, which happens to go over a busy railroad crossing, an expensive second road into the development would be required for emergency access.

Then, there was a hostile Donner Summit community that was fiercely against the project.

But probably the biggest kicker was the downturn in the economy. By 2008, real estate prices were declining and existing luxury resort developments in Truckee couldn’t unload their inventory, even at significantly reduced prices. There was no longer the market for almost 1000 new homes in an area as remote as Donner Summit.

Throughout, the developers understood the importance of keeping the ski area running to maintain the value of the property. Although there were some cutbacks in service and the number of kilometers groomed declined, it remains a wonderful place to skate away the day.

However, this past summer the developers couldn’t take the economic bleeding anymore and they defaulted on the loan.

This chapter of Royal Gorge is complete. The next one is yet to be written. By the time this hits print, Royal Gorge will be on the market and the receiver looking for a buyer. The Truckee Donner Land Trust hopes they will be that buyer, but certainly not at the current price of $24 million dollars.

Whoever buys Royal Gorge, hopefully they will see its value and continue to run it as a cross-country skiers’ haven. A place that in less than an hour’s ski you can stand and look to the south and east and see the Sierra Nevada crest unfolding before you, or look to the west and gaze into the 4000-foot deep gorge from which it gets its name.

Tim Hauserman is the author of “Cross-Country Skiing in the Sierra Nevada” and teaches at Tahoe Cross-Country in Tahoe City.