Small Colorado town eyes bond-financed purchase of ski resort

Bloomberg News

A small Colorado town wants to finance its purchase of a privately owned ski resort with revenue bonds backed only by the facility's earnings.

Nederland, which has been in negotiations for the Eldora Mountain Resort since last fall, agreed this month to a term sheet for the purchase with the expectation of finalizing a deal by Oct. 1, according to a notice on its website.

The town of nearly 1,500 in the mountains southwest of Boulder said it will issue revenue bonds "backed only by the resort's earnings, which is profitable enough to service the debt," adding that grants and private-sector funding will also be explored to help lower the amount of debt issued.  

A purchase price has not been disclosed, but the town's board of trustees will consider a bond resolution in the coming weeks that would set a maximum amount of bonds that would be sold, according to the notice. 

The town said it already created a Mountain Recreation Enterprise Fund, where revenue from lift tickets, food, rentals, and other purchases would be deposited and used to pay off the bonds.

Officials pointed to models that indicate the accumulation of a $10 million reserve in the first couple of years that would serve as a cushion for the bonds. 

Eldora's general manager announced last August that owner POWDR was selling the resort along with other properties in the U.S. and Canada. Under the deal with Nederland, the company would continue to support the facility for two years and Eldora's approximately 700 workers would become town employees.

Nederland's plan is to make Eldora a year-round community asset that would spur economic development and give the town "a long-needed, sustainable way to fund infrastructure."

With 680 skiable acres, Eldora is one of Colorado's smaller ski areas, but at 21 miles from Boulder is one of the easiest to reach from a major population center.

The town last sold general obligation bonds in 2003 with a nearly $1.5 million issue that carried a final maturity in 2022 and an Aaa rating from Moody's Ratings based on insurance, according to information posted on the Municipal Securities Rulemaking Board's EMMA website.

For fiscal 2025, Nederland has a $10.78 million all-funds budget that includes $5.83 million in general fund spending.

Another Colorado governmental entity headed to the municipal market earlier this year with a bond issue to finance the purchase of a commercial property by its nonprofit subsidiary. 

The Colorado Educational and Cultural Facilities Authority sold $301 million of unrated revenue bonds to buy and expand the Stanley Hotel in Estes Park, which inspired Stephen King's book "The Shining."