Squaw Valley USA used to be known as the place that hosted the 1960 Winter Olympics. It's now on its way to becoming North America's largest mountain resort – a place that could transform Lake Tahoe into an international tourism draw.

On Tuesday, officials said Squaw would take over a nearby competitor, Alpine Meadows. The deal combines two of Tahoe's oldest resorts. Customers will buy a single ticket to ski both venues. A shuttle service will ferry guests between the two locations at first; eventually other transportation could be worked out.

The merger is aimed at realizing Squaw's vision of competing against world-renowned ski resorts in Colorado and Utah, said industry consultant Ralf Garrison. That would make Tahoe less dependent on day-trippers and weekend guests from Sacramento and the Bay Area, and more of a destination for well-heeled visitors from around the world.

"It needs to attract guests who come farther and stay longer," said Garrison, who follows the mountain tourism industry for Advisory Group Inc. of Denver. "Tahoe's challenge is to build a big enough magnet."

Garrison said the Squaw-Alpine merger could be just the ticket, particularly with the high-end lodging already in place at Squaw. The two resorts combined would control 6,000 acres, making it the largest mountain resort on the continent, he said.

"The bigger the resort, the more skiing, the bigger the magnet," he said. "It gives you the kind of buzz that shows up on the radar screens nationally and internationally."

Combining Squaw and Alpine has been talked about for decades. What brought it about is a flow of big development dollars into the Tahoe basin from Colorado in the past decade.

Heavenly and Northstar-at-Tahoe have been taken over by Vail Resorts Inc.

Last year, Squaw was purchased by KSL Capital Partners. The Denver development firm, bankrolled by Wall Street financier Henry Kravis, owns a portfolio that includes the Hotel del Coronado in San Diego. The firm just raised $2 billion from developers for new projects.

Another Colorado developer, East West Resort Development, has struggled at Tahoe. It lost the Ritz-Carlton hotel at Northstar to foreclosure and put nearly $1 billion worth of property into bankruptcy.

Despite East West's troubles, much of the Tahoe ski industry is being transformed by Colorado money. It's becoming less about skiing and snowboarding, and more about developing full-service resorts with shopping, restaurants, high-end lodging and other amenities.

"It's substantially more than just running uphill (ski) lifts," said Andy Wirth, who runs Squaw and will be chief executive of the merged operation. "We have to be focused on the entire experience 24 hours a day."

Wirth said Squaw is beginning to sketch out a development vision for the next 10 years. "We will continue to pursue more opportunities," he said. "We're not done."

The merger could enhance Tahoe's possible run at hosting the 2022 Winter Olympics. But Wirth said it wasn't done with the Olympics in mind.

Squaw and Alpine are far different places. Squaw is more built up and upscale. Alpine is quieter, more like the Tahoe of old.

It's unlikely that will change. Much of Alpine, owned by the public and controlled by the U.S. Forest Service, faces development constraints. Indeed, the merger needs approval from the Forest Service and the California Tahoe Conservancy, a state agency.

So why the merger? The sheer size will create needed economies of scale, said Bob Roberts of the California Sky Industry Association.

There will be cross-marketing opportunities, too. Already Squaw is offering a season pass at $799 that provides access to both resorts.

And guests who spend, say, a week at Squaw could hop over to Alpine for a day to explore the "traditional family feel" of the place, said Todd Chapman, president of Alpine's owner JMA Ventures.

Combining the two could create some logistical issues. While they're only 10 minutes apart, the two resorts are separated by a 460-acre private ski run owned by Troy Caldwell, a former pro freestyle skier.

For years, Caldwell has talked with Squaw and Alpine about installing a lift or some other connector between the three properties. The merger between Squaw and Alpine creates fresh momentum in that effort.

"We're chatting," Caldwell said. "We're not to the point where we physically know what's going to take place."

Financial terms of the Squaw-Alpine deal weren't disclosed. JMA, which also owns Homewood Mountain ski resort at Tahoe, will be a minority partner in the combined resort.

Squaw has been trying for years to up the ante in the Tahoe resort business. It spent tens of millions of dollars in the 1990s building an Alpine-themed village with shops, condos and a hotel.

Even so, "Squaw has long been thought of as a resort that had more potential than was being achieved," Garrison said.

That began to change last year, when KSL bought Squaw from the family of the resort's legendary founder, Alex Cushing, for an undisclosed sum. KSL is spending $50 million upgrading Squaw's facilities.

"KSL has tremendous resources," Roberts said. "They'll be able to take Alpine's experience to a higher level."

KCRA: Squaw Valley Alpine Meadows join operations - Sept. 27, 2011

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