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Saturday, March 05, 2011

Will strong season ease debt issues at Peek'n Peak?

    The Willis kids have been waiting for this.

    Their membership in the Meadville Snow Leopards group allows them to ski at Peek'n Peak Resort and Spa every Sunday. They haven't missed a week.
    Beginning Monday, the girls' passes are valid every day. It's one way the resort, about four miles south of Findley Lake, N.Y., acknowledges that spring is coming.
    "We're hoping for another storm," said their mother, Chris Norwood. "We're snow people. And this has been a fabulous winter."
    The Peak's managers think so, too.
    "The snow has been great," said Robert Swenson, the resort's president. He's hoping for cold weather through March 27, when the resort hosts the East Coast Snocross finals.
    "After that," he said, "we'll have to play it day by day."
    The Peak needed a big winter. The resort's owner, Ohio-based Kiebler Recreation LLC, filed for bankruptcy protection in May, claiming debts of $28 million.
    The bulk of that money -- $15.6 million -- was owed to Huntingdon National Bank. The bank attempted to foreclose on the property, only to back off in December, giving the Peak another ski season to generate income.
    The arrangement requires monthly payments over a period of 25 years, with a balloon payment at the end of the fifth year.
    Swenson would not discuss the specifics.
    "There is nothing to report at this time," he said. "It's moving forward. And it really has not affected us at all."
    New York state regulators added another hurdle in December. A court motion by the state's Department of Environmental Conservation noted violations at the Peak's sewage-treatment facility, and at three gas wells owned by the resort.
    The wells had been abandoned but not plugged, the department alleged. The sites were not marked.
    State regulators say those problems have been corrected. They have not alleged that any pollution occurred.
    "The facility has been extremely cooperative and responsive," said Lori Severino, a spokeswoman for the Department of Environmental Conservation. "That's worth noting."
    The sewage issue has not yet been settled. A state permit issued in 2007 required the resort to design improvements to its on-site treatment plant, which discharges into French Creek, according to the court filing.
    The permit was modified in 2009. The resort's operators had decided not to expand -- a move that would have stressed the existing sewage system, according to the court records.
    The records were filed in Ohio, where Kiebler Recreation is based.
    The state still required design improvements to the sewage plant. The Peak's operators said the bankruptcy filing had delayed that.
    "Our resort has experienced a couple of devastating financial years, due to many factors," General Manager Brad Gravink wrote in an undated letter to the Department of Environmental Conservation. "Once we emerge from this, we will be in a position to engineer, seek approval and install the required improvements."
    A hearing on the matter has been scheduled for March 15.
    The financial issues at the 1,150-acre resort could have an effect on all of Chautauqua County. No company brings more business to the county in winter, said Andrew Nixon, the executive director of the Chautauqua County Visitors Bureau.
    "They've had three good ski seasons in a row," Nixon said. "This year probably has been the best because of the consistency of the snowfall.
    "If they didn't have that debt," he said, "they'd have been wildly profitable in the last couple years."
    Swenson, the resort's president, said his focus is on the future. When the seasons change, the Peak's income will shift from lift tickets to greens fees.
    "Everybody's still thinking 'ski'," he said. "But we're pretty much in golf mode right now."

    ROBB FREDERICK can be reached at 870-1733 or by e-mail.
     For more information on Chautauqua Lake Real Estate & Living visit:

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