Greetings from Wintergreen
My newsletters are intended to be limited to quarterly updates per year but the following news is so important that I wanted everyone to know what we have recently learned. Many of you may already have this information, especially those attending yesterday’s special meeting. Others may not be aware of everything which follows so perhaps this special newsletter email is justified.
The big news is simply: The owner members of W.P.I. voted yesterday to accept the merger with the Justice Companies of West Virginia. Wintergreen will be sold at the end of this month.
This was the memo to resort staff on yesterday’s vote:
“Hantzmon Wiebel, LLP, the independent certified public accounting firm serving as the Inspector of Election, have canvassed the votes and makes this Preliminary Report:
- Proposal #1, To Adopt the Plan of Merger: 1,219 votes for, 21 votes against. The Proposal passes.
- Proposal #2, To Amend and Restate the Articles of Incorporation of the Company: 1,219 votes for, 21 votes against. The Proposal passes.
- Proposal #3, To Terminate the Declaration Subjecting Resort Properties at Wintergreen, Nelson and Augusta Counties, Virginia, to Terms, Conditions and Easements, Make November 26, 1994: 1,217 votes for, 23 votes against. The Proposal passes.
As the result of the successful passing of all three proposals, the Justice Merger plan is allowed to proceed to closing. Please remember that these are preliminary results. The final certified results will be announced via email and posted to the Members’ website in the near future.
From Hank Thiess, the G.M. of Wintergreen: “Once the transaction closes, we will officially be owned and controlled by the Justice organization. In the event of a successful merger, we will no longer be a member-owned organization. However, the current members of WPI will continue to enjoy their membership status, discounts, facility access and other entitlements through November 30, 2013. To that end, our duties and responsibilities toward the members will not change, and we should continue to strive to continually deliver the best possible experience for the members after closing.”
A great debt is owed to the Justice Family from West Virginia. Their timing and commitment to Wintergreen was critical. It is said there were five other investor groups who expressed an interest in buying the resort but none had the commitment or vision of the Justice Family to the continuation of Wintergreen as a premier mountain resort community. At WREC, we are delighted and very excited and we are looking forward to working with the new owner. As I said in the last newsletter, if you have not witnessed the transformation that Jim Justice has created at the famous Greenbrier, you should visit. . It is only two hours from Wintergreen, so it would behoove you to see the transformation first-hand. The Greenbrier Classic (www.greenbrierclassic.com) starts in two weeks and I think tickets are still available, although you may have to pick them up at WILL CALL booth at this late date. It is a great PGA tournament with all the top golf pros, and will be nationally televised
Mr. Justice certainly has the financial ability and the commitment and the panache to create another “5-STAR resort at Wintergreen”. What is going to happen, no one can say at this point, it is too early; but Justice spent a great deal of money to acquire the failing famous West Virginia hotel and then supported it for many months, losing a tremendous amount of money before he got it turned around. Since his acquisition, he has created a fierce loyalty among his employees and he is just as loyal to them and he has invested millions more to restore the grandeur of “America’s Resort”. What does this mean for Wintergreen? It was mentioned that the first investment will be a water tower, so we are ready with adequate and cooler water for snow making this ski season. The goal is to get our resort on firm financial footing as quickly as possible as one would expect. Major and logical investments could follow but what the order of investments will be, it is too early to tell. However, communication in the future will be far more forthcoming and will go to all owners. The membership structure will probably change but to what form, I don’t think anyone knows at this point, but having met Mr. Justice a while back and spoken with friends who know him well, I believe it will be fair and equitable. He understands the long standing commitments of the equity members and the importance of the inclusion of the non-members, as well as local and surrounding residents and neighbors. I have been asked many other questions. For example, how will Wintergreen be incorporated with The Resort at Glade Springs www.gladesprings.com and the Greenbrier. www.greenbrier.com? I am sure the management folks in West Virginia are giving this a great deal of thought and any association with these spectacular communities can only be advantageous to every owner at Wintergreen.
Here is the today’s press release in the area papers:
Wintergreen owners OK sale to Jim Justice
Credit: NATE DELESLINE III/THE DAILY PROGRESS
Jim Justice attended Sunday’s meeting of Wintergreen Partners Inc.
Published: June 24, 2012
WINTERGREEN — Members of Wintergreen Partners Inc. on Sunday voted overwhelmingly in favor of a proposal to accept an agreement that will allow the owners of the Greenbrier resort in West Virginia to acquire Wintergreen Resort in Nelson County.
For Wintergreen, Jim Justice has agreed to pay $2.5 million in member consideration, along with $14 million due at closing, making the total deal worth $16.5 million.
The leadership of WPI announced the deal, subject to member approval, last month. Justice bought the Greenbrier in 2009.
Wintergreen Resort retained Hantzmon Wiebel, a public accounting firm, to conduct the voting process. According to unofficial results emailed to The Daily Progress by Dion Hayes, Wintergreen’s attorney, 1,219 voted in favor of the merger plan and 21 against.
Speaking after the meeting but before the votes were in, Hayes hailed the proposal as a positive turn for the resort.
“I think it’s a fantastic result for Wintergreen and a fantastic result for Nelson County, and it’s good for the economy of Central Virginia,” Hayes said.
Hayes reported that the members also voted in favor of two rider clauses regarding the acquisition — amending WPI’s articles of incorporation and terminating a clause that required all owners of residential properties in Wintergreen to be members of WPI.
WPI dates back to 1984, when former Wintergreen president L.F. Payne, who eventually went on to serve in Congress, asked the resort’s then-2,800 owners and some investors to buy initial memberships in the newly created company, which was legally run similar to a country club.
On Sunday afternoon, members met for about two hours in two large meeting rooms that were filled to capacity. By 1:30, a half-hour before the meeting was set to begin, the main meeting room, the Skyline Pavilion, was full and members were redirected to a ballroom in the Mountain Inn, where the group watched the proceedings by video.
However, some members, apparently satisfied with everything they heard, began to trickle out of the meeting rooms by 3:30 p.m.
Kathy Gunner and her husband, Lee Gunner, also departed before the meeting officially adjourned, but stayed to hear Justice speak and take questions.
“I think it’s bittersweet,” Kathy Gunner said of the change in ownership. “We have been [property] owners, and we have an investment here and we know the board personally. But I think after hearing [Justice], it’s clear that he’s going to make this a sustainable resort that we’ll all continue to enjoy and be very proud of.”
“Everything looks good,” said another man who left early but declined to give his name.
“We’re just thrilled that [Justice is] going to buy Wintergreen,” Judy Winnenberg said after the meeting. Her husband, John Winnenberg, agreed. “I think he’ll do a good job here,” he said.
This year, Wintergreen faced a series of unexpected setbacks that put the resort’s long-term operations and stability in jeopardy. They included significant ski revenue shortfalls due to an unseasonably warm winter; a now settled state tax dispute over a conservation easement; and Bank of America’s decision to cancel Wintergreen’s $3 million line of credit. The resort also laid off about a dozen staffers.
Under Justice’s tenure, the Greenbrier also faced similar challenges, including the layoff last winter of about 100 employees to help offset a $13 million loss during the first quarter of 2011. However, business observes say Justice likely saved the long struggling Greenbrier from certain bankruptcy.
Located in White Sulphur Springs, W.Va., about two hours from Charlottesville, the Greenbrier has 700 guestrooms, a spa, a 103,000-square-foot casino and a golf course that’s hosted a PGA tournament under Justice’s tenure.
Also speaking after the members-only meeting but before the votes were tallied; Justice said the feedback from the group made it clear that everyone at Wintergreen cares about their neighborhood, their community and the mountain.
Justice also said he hoped that an overwhelming majority of people will support the deal, a wish that ultimately came to fruition.
“I don’t want the vote to be close,” he said. “In fact, I wouldn’t want to be the winner at the buzzer … The only way this place is going to survive is with my best efforts, along with the support and best efforts of all those that have a vested interest here.”
Justice said one of the first things he’d like to pursue is an expansion of Wintergreen’s snowmaking capacity. The resort relies on manmade snow for nearly all of its outdoor winter attractions.
More snowmaking capacity, Justice explained, would allow the resort to have a longer ski season and in turn, likely boost revenues.
Told that many of the people departing from the meeting were smiling and seemed to be at ease, Justice also smiled and expressed optimism that with everyone’s support, good things are ahead for Wintergreen.
“The test of time will be if they have those same smiles on their faces a year from today,” he said. “That’s my goal.”
Finally, a quick word about the real estate markets.
The Feds decision to extend Operation Twist and their lowered forecasts for our economic growth partly came from disappointing economic reports we’ve witnessed recently. The housing market continues to muddle along the bottom with numbers showing only modest improvement on a national level. Housing Starts were a bit below expectations. Building Permits (a sign of future construction) surged 8%. And, sales were up nationally last month according to the evening radio reports. We are also seeing more new construction at Wintergreen than we have seen in the past several months and the real estate market seems more active now than it was earlier this spring. I believe our buyers are starting to understand the positive impact of the Justice acquisition and how it could affect property values at Wintergreen and the surrounding areas in the future. Home loan mortgage rates continue to benefit from the drama in Europe and the weak economic reports here at home, as investors continue to see our Bonds (including Mortgage Bonds, to which home loan rates are tied) as a safe haven for their money. Home mortgage rates are not going to be affected much through the rest of this election year. Interest rates are still the lowest we have seen in our lifetime and the selection and prices of property at Wintergreen and in the areas around Charlottesville are good and have not been affected yet by the tremendous investment of the new buyout. Let me know if you are looking for refinancing sources and I will put you in touch with my contacts in the industry. As I have mentioned before, now is the best time to recommend to a friend or family member to buy a place at Wintergreen or in the surrounding counties.
I trust you and your family will have a great summer and drop me a note or feel free to call if you have questions. This is all the news I have at this point but I will keep you posted on new developments. Come visit and stop by the mountain office when you are up. Look for the Big Black Bear.
All the best,