Whistler Auction? Olympic Ski Resort Could Be Sold During Games
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VANCOUVER, British Columbia — The Whistler ski resort, home to next month's Olympic downhill, could be auctioned off in the middle of the Games after creditors moved to auction off the assets of Intrawest LLC.
A public notice of foreclosure has been posted in newspapers by the company's lenders, which include Lehman Brothers and Davidson Kempner Capital Management, saying that an auction to sell the assets will be held Feb. 19, right in the midst of the Olympics.
The Intrawest properties also include the Whistler Sliding Centre which is the site of the bobsleigh and luge.
Intrawest spokesman Ian Galbraith said no company assets have been seized, and it's business as usual for the Games. Galbraith called the notice of auction in the New York Times and Toronto's Globe and Mail newspaper a standard practice by lenders during refinancing discussions.
"No foreclosure has happened," he said. "We're looking forward to the success of the Games."
Intrawest said its parent, Fortress Investment Group, continues to own and control Intrawest and all of its properties, but the group of lenders said they hope for a speedy sale of Intrawest in one transaction.
"Each qualified bidder must be a financial institution or other entity that has the financial wherewithal to purchase the membership interests in immediately available funds on the closing date," the public auction notice said.
Fortress could potentially forestall a sale by coming up with money. Intrawest reportedly missed payments last month that were due on a $1.4 billion loan.
Dan Doyle, the Vancouver organizing committee's executive vice president of construction, dismissed concerns about whether the Games could still be held on the property.
"It doesn't make very good business sense for people to put them out of business at the time of the year when they're making their most earnings," Doyle said following the local organizing committee board's final meeting before the Games.
Doyle said bankruptcy doesn't happen overnight.
"It's a long process, it's a process that takes months. Given all of that, we're very confident that the Games will go on at those two venues in Whistler, and they'll go on with the co-operation of the people that are running the mountain," he said, noting that Games organizers have sought legal advice on the situation.
Organizing committee chair Rusty Goepel said the rush to auction makes no sense. He said it makes more sense to hold off and find potential buyers.
Vancouver-based Intrawest is owned by New York private equity firm Fortress Investment Group LLC. Intrawest has been struggling with financial problems since it was bought by Fortress in 2006 for $2.8 billion in cash and debt.
The deal was a leveraged buyout with a $1.7 billion loan which came due in late 2008, around the time when the financial crisis hit.
Intrawest has sold several assets in order to meet the payments, including a resort at Copper Mountain, Colo., and two resorts in France.
It's not the first time Fortress has caused concern around the Games.
The City Vancouver had to take over financing for the 1,100-unit athletes village after Fortress stopped payment on its construction loan in fall 2008. The city said Fortress backed out due to cost overruns, and a crashing real-estate market that meant contractor Millennium Development might not be able to pay them back.
Vancouver taxpayers are on the hook for for the village. It meant the city became the lender to Millennium.
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JEREMY HAINSWORTH 01/21/10 08:45 AM ET Associated Press