Whistler Blackcomb, host of next month’s Winter Olympics, is to be auctioned off following the failure of its owner Fortress to make payments on a $1.7 billion loan.
Fortress Investment Group, the New-York based private equity firm and hedge fund, paid $2.8 billion for Whistler’s resort operator Intrawest in 2006, at the height of the real estate boom.
The deal included $1.7 billion in loans from a consortium that included Lehman Brothers and Davidson Kempner Capital Management.
However the subsequent collapse of the North American real estate market coupled with weakening consumer spending due to the recession has hit ski resort operators particularly hard.
Fortress has struggled to refinance the original loan and the lending group is believed to be pushing for repayment of the final instalment worth hundreds of millions of dollars.
Lenders to Fortress have posted notices of foreclosure in several North American newspapers, including the Wall Street Journal, announcing a public auction of the assets of Intrawest, which also owns Mont Tremblant, Steamboat, Winter Park, plus six other North American ski resorts.
The lenders intend to conduct a public auction on February 19, which would mean the sale of Whistler Blackcomb in the middle of the Olympics.
Intrawest has said that it was in negotiations with its lenders and suggested that the timing of the foreclosure notice to coincide with the Games was deliberate. “This is a negotiating tactic,” a spokesman for Intrawest is quoted in The Times. “As far as we are concerned, it is business as usual at all of our resorts.”
The Canadian organising committee for the Games has dismissed concerns that a sale of the assets would affect the running of the event.