A 40-year-old Donner Summit ski resort has defaulted on a $16.7 million loan, leaving a controversial housing proposal in considerable doubt.
Royal Gorge LLC, owner of Royal Gorge Cross Country Ski Resort near Soda Springs, was hit with the default notice in late June. The resort owes Irvine's Armed Forces Bank more than $16.7 million, according to Nevada County records.
The resort bills itself as "North America's largest" cross country ski area. It takes in more than 2,900 acres and about 200 miles of trails. It includes the historic Rainbow Lodge.
Royal Gorge's managing partner Kirk Syme, a Bay Area developer, said in a prepared statement he's "confident we will resolve this matter with our lender."
Syme said operations at Royal Gorge aren't affected by the default. He added that the resort's Ice Lakes Lodge is under separate ownership and isn't involved in the default.
A default notice typically is the first step toward foreclosure, but often a commercial property will remain in business. Another marquee destination in the vicinity, the Ritz-Carlton luxury hotel at Northstar, has remained open while going through foreclosure.
The troubles at Royal Gorge and the Ritz highlight the troubles afflicting the mountain economy the past few years. Experts say Royal Gorge is typical of ski resorts that have struggled lately.
"I knew they were having a rough winter," said Bob Roberts, executive director of the California Ski Industry Association.
Syme and two partners, cousins Todd and Mark Foster, paid a reported $35 million for the resort in 2005, at around the peak of the property bubble. They quickly charted a plan for 900 residential units on the property.
"People have dreams, and sometimes dreams happen at the wrong time," Roberts said.
The project was immediately unpopular among some environmentalists.
"This is Donner Summit. A lot of people don't want to see it carved up and paved over," said Tom Mooers of the conservation group Sierra Watch. He said the project would have doubled the amount of development in the immediate area around the summit.
Even before the default, the developers weren't making much headway with regulators, Mooers said.
"They really didn't get anywhere," he said.
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