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SCRANTON, PA-In a bizarre finale to a deal that has been in the works since 2004, a just-completed Lackawanna County-commissioned appraisal of the 400-acre Montage Mountain Ski Resort shows the Scranton property valued at $4.3 million or $10,750 per acre (25 cents per sf). The county sold the financially ailing property in July to Philadelphia-based Sno Mountain LLC for $5.1 million or $12,750 per acre (29 cents per sf).
A lawsuit filed by dissident commissioner Mike Washo, scheduled for Aug. 30, could delay the deal's closing, city hall sources in a position to know tell GlobeSt.com. Neither Washo nor commissioner Robert C. Cordaro, who orchestrated the deal, could be reached by GlobeSt.com's publication deadline.
However, Scranton commercial brokerage sources familiar with the protracted transaction, tell GlobeSt.com the appraisal was dated Aug. 16 and was prepared by New Hampshire-based ResortNorth Valuation for local appraiser Nasser Real Estate. The county paid $18,500 for the appraisal that was initially commissioned in June. However, it was still in the preparation stage when Cordaro, acting for the county board of commissioners, struck a sale deal in July with Sno Mountain LLC, a group of seven investment bankers, developers and accountants.
For the county, the disposition of the ski resort ends 15 years of losses averaging $1 million a year, city hall sources confirm for GlobeSt.com. The county, under a previous administration, purchased Montage in 1991 for $14.7 million or $36,750 per acre (84 cents per sf). The county still has $8.6 million in municipal bond debt outstanding from that transaction, county sources confirm.
Commissioners placed the property on the selling block in 2004, asking $9.6 million. York-based Snow Time Inc. and another bidder submitted low offers that were rejected and the property was then taken off the market, area brokers following the asset's sale tell GlobeSt.com.
Ironically, in June of this year, Snow Time made another bid for the property, this time for $4.1 million. A month later, after a public hearing on the offer, Snow Time increased its bid to $5 million or $12,500 per acre (28.6 cents per sf). At that time, Sno Mountain LLC put in a bid for $5.1 million that Snow Time declined to top, brokerage sources who followed the bidding tell GlobeSt.com.
Besides getting Montage Mountain off its books, the deal with the Philadelphia buyers specifies the county will receive 10% of the profit from any real estate development directly related to skiing, such as mountain-side residential condominiums, and 50% of the profit from other development projects on the 400-acre tract, county sources tell GlobeSt.com.
To ensure the resort will not suffer the same lack of maintenance fate it endured for the past 20 years, the new owners have told the county they initially plan to invest $14 million in immediate upgrades to the entire property, including $8 million for a water park. That capital improvements plan could reach $20 million in the near future, the buyers have told the county. County commissioners laud the deal coming together at this time because Montage Mountain is considered an important component in an evolving tourist-based economy in the Scranton area, local development sources tell GlobeSt.com.
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