RECEIVERSHIP SERIES, PART 1: A Complex Workout For Tamarack Resort

 

Part I: Equity receivership — Tamarack Resort
 
One of DWC’s areas of expertise is in resolving very complex matters relating to income-generating real estate, and few projects are as complex as Tamarack Resort, located in the Payette River Mountains near Boise, Idaho.
 
The all-season resort spans award-winning golf, a ski mountain, condos, restaurants and hotel units among its operations, and when DWC was appointed receiver following the shutdown of the resort, there were partially built condos and the mountain was just weeks away from its winter season — without any winterization efforts completed.
 
In some instances, the receiver will take on the limited role of collecting rent when the ownership entity is unavailable or unwilling to do so. But in the case of Tamarack, DWC as receiver had a much more extensive role in preserving the value of the resort.
 
Our initial receivership task was to conduct an in-depth review of all departmental operations, including construction in progress. This included a physical inventory of assets and needed repairs and winterization efforts.
 
With just two days to initiate the seasonal closing and winterization of the golf course, DWC developed a plan for the winterization of these projects with consideration for environmental, regulatory and government stakeholders.
 
“We really stepped into the business and operations to look at all aspects of the partnership,” says DWC Chairman and CEO Douglas Wilson. “When we became involved, there was an incredible sense of urgency to address a number of things immediately, as the partially completed condo building was at risk of being exposed to the weather for the entire winter and there were countless vendors involved. In order to preserve the value, we had to immediately get the asset stabilized and resolve lingering issues to stem the losses.”
 
Within a matter of weeks, the winterization was completed, and ski operations were preserved including ski patrol, ski passes, equipment rental, medical resources, restaurants, lodging, seven lifts and personnel.
 
While the Tamarack situation was unique in many ways, we anticipate the current economic climate will create this “perfect storm” for many operating companies and real estate assets in the near term.
 
“There will be projects partially built or completed with an operating component that fall off the tracks, and need a third-party steady hand to oversee the resolution. These ‘equity’ receiverships involve stepping into the shoes of the owner to achieve the best outcome for all parties involved,” Wilson says.