Laserfiche WebLink
With regard to Vail Resorts, Inc., the financial statements indicate net income of$3.3 million and <br /> $4.7 million in 1995 and 1996, respectively. Income was higher in 1994, a year in which Vail <br /> Resorts sold off assets of Gillett Holdings, Inc. <br /> While the information provided is quite limited it does tend to indicate that, at the very least, both <br /> Vail Associates and Vail Resorts are solvent as of the dates of the information provided and <br /> would probably not be unduly burdened by the amount of debt they would incur from <br /> participation in the project. This information does not, however, reflect the financial impact of the <br /> acquisition of the Breckenridge and Copper Mountain ski areas. <br /> (3) Alternative Sources of Financing <br /> Glenn Porzak, the attorney for the applicants, has indicated to both the staff and the Board that <br /> the applicants do not believe that other sources of financing are viable because of the <br /> public/private sector mix of the reservoir company membership. We do not know if the applicants <br /> have actually attempted to obtain financing from other sources only that they are probably not <br /> eligible for funding from most public agencies. <br /> (4) Analysis of Collateral <br /> The Helton& Williamsen feasibility study provided a detailed analysis of both the firm yield of <br /> the reservoir as well as a market-based analysis of the value of water rights in the project area. <br /> The study concludes that the firm (dry-year) yield of the reservoir would be about 2,000 acre-feet <br /> and that the average value of the water rights would be about $2,000 per acre-foot. Staff concurs <br /> in these estimates based on the information provided. <br /> Helton&Williamsen further estimated the total value of the project by adding the cost of the <br /> reservoir to the estimated value of the water rights. Multiplying this amount by 75 percent, the <br /> equity in the project to be pledged by the applicants,results in an estimated value_of the.collateral <br /> (reservoir plus water rights)of about $11.6 million as outlined in Table 2. This indicates that the <br /> value of the collateral (to be offered in the form of shares of stock) exceeds the amount of the <br /> loan by more than $3.0 million. <br /> Table 2. Estimated Values for Eagle Park Reservoir Project <br /> Water Rights Total Value Value of CWCB Residual <br /> Reservoir $2,000 per Ac-Ft Entire Project 75 % of Pr j� Loan Value <br /> $11,500,000 $4,000,000 $15,500,000 $11,625,000 $8;500,000 $3,125,000 <br /> The $11.5 million purchase price for the 3,000 acre-foot reservoir implies a cost of about $3,800 <br /> per acre-foot of storage capacity. Staff has reviewed the cost versus capacity relationships for <br /> several other constructed or planned reservoir projects in Colorado and has found that the $3,800 <br /> per acre-foot is quite high for a rehabilitation project but relates well to the cost curve for new <br /> projects. <br /> 3 <br />