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PARK CITY — Park City Mountain Resort filed a lawsuit Friday against the company that owns much of the land where the popular ski resort operates.
PCMR has used land owned by Talisker Land Holdings LLC since 1971. PCMR reported that its lease with Talisker was set to expire in April, and it intended to extend for an additional 20 years. PCMR said it informed Talisker of its intentions multiple times since 2009, and made improvements believing the extension would be granted.
In December, however, Talisker informed the resort that the agreement would end in April.
We need to protect the future of the company and our more than 1,200 employees, who bear a tremendous burden of uncertainty in this matter.
–Jenni Smith, Park City Mountain Resort
“After extensive and, sadly, unsuccessful negotiations, we reluctantly took the initiative to file this lawsuit,” said Jenni Smith, president and general manager of Park City Mountain Resort. “We need to protect the future of the company and our more than 1,200 employees, who bear a tremendous burden of uncertainty in this matter, and the many local businesses and homeowners in the greater Park City area. We are seeking relief through the court, the only option left at our disposal.”
For more than 40 years, the resort has leased much of the land on which the resort operates, including the Town Lift, the base area and all of the lifts near the base. The resort's rent was due in April, which officials paid on time and in full, said Krista Parry, director of communications for the resort.
In doing so, resort officials believed the lease would be renewed until 2031.
Over the summer, PCMR officials spent about $7 million on capital improvements at the resort. It wasn't until Dec. 27, 2011, that Talisker sent a notice stating that the lease had expired and owners needed to negotiate a new lease agreement.
"We could not come to an agreement," said Parry. "So we had to ask a judge to help us settle this quickly and fairly so we can move forward."
A statement issued Friday from Talisker said PCMR's lease of its land expired in 2011 and both parties have been unable to reach an agreement about new lease terms.
We had hoped to reach terms on the new lease that would be fair to both parties. Unfortunately, it appears that PCMR is attempting to use litigation to better its position, and avoid reaching a mutually fair outcome.
"We had hoped to reach terms on the new lease that would be fair to both parties. Unfortunately, it appears that PCMR is attempting to use litigation to better its position, and avoid reaching a mutually fair outcome," the statement said.
Talisker said it never contemplated or threatened to close the resort. "We believed the negotiations were continuing and we are disappointed by PCMR's action today."
It is an unusual situation for a ski resort, and the lawsuit is an uncommon step, but PCMR owners and managers felt compelled to do so to protect the viability of the resort.
"It's a very unique situation," said Parry. "We basically did it to protect our company and to protect our employees."
It is a complicated agreement, but one that has benefited both sides for decades. Parry said resort officials met multiple times in the past three years to discuss property transactions, business opportunities and infrastructure investments, including the lift connection between Park City Mountain Resort and Canyons Resort, which is also a Talisker property.
The lawsuit asks a judge to declare that the agreement between the two parties has not expired, but instead has been renewed with the payment last April. PCMR also asked for an injunction to prevent Talisker from shutting down the resort.
Resort officials assert employees are responsible for building what is a world-class resort recognized yearly for its terrain parks and family friendly atmosphere.
"We truly are the only ones who could operate (the resort)," Parry said. "We own the parking lots, lifts and water rights, which are extremely important. Especially in a year like this when man-made snow is so important."
Parry said the resort will remain open this year as the two sides work to try and resolve the leasing issues.
Contributing: Hunter Schwarz