Whitetail Ski Resort sale blocked by rivals' lawsuit Pa. county as tax-free owner called unfair


September 15, 1998|By Kristine Henry | Kristine Henry,SUN STAFF

Accusations of unfair business practices have temporarily halted the Whitetail Ski Resort's plan to be acquired by the bond-issuing arm of a nearby county.

The Mercersburg, Pa., resort -- which receives nearly 50 percent of its business from Marylanders -- is seven miles north of the Maryland border in Franklin County and was on the verge of being sold to the Dauphin County General Authority for $20 million.

That deal is on hold now that two nearby ski resorts, both owned by Delaware's Snow Time Inc., claimed in a suit filed Thursday that the authority's tax-exempt status would give an unfair advantage to Whitetail.

"We're not opposed to the sale of Whitetail, we're opposed to the sale to a government-related entity with an unfair competitive advantage," said Scott Romberger, corporate controller of Ski Liberty and Ski Roundtop resorts.

"They are competing with private enterprise, and I'm not sure they have any right to do that," Romberger said.

Neither is Dauphin County Commission Chairwoman Sally S. Klein.

She has asked the authority to put all projects on hold until it meets with the commission at an open hearing Sept. 22. Klein said the authority was created in 1984 to sell bonds for a county human service building and garage, and since then the autonomous authority has "overreached" its mission.

"The Dauphin County General Authority should be pursuing projects that benefit the citizens of Dauphin County, and if you can find a way that [the ski resort] benefits those citizens -- I don't think I can find a way," Klein said.

Gregory Ricci, General Authority board chairman, declined to comment on specifics of the deal, citing the pending litigation.

"Typically in arrangements such as this, the organization such as ours enters into a payment-in-lieu-of-taxes arrangement," he said, "but I can not comment on if that occurred in this case."

Under the proposed deal, the general authority would sell 15-year bonds to raise revenue for the purchase. The current Whitetail management team would be retained to run the resort, which employs about 800 people during ski season. The resort offers fly fishing and mountain biking in the off season, when it employs about 40.

Chip Vicary, chief financial officer and acting general manager of Whitetail, said last winter's warm weather caused the resort's number of visitors to drop from its typical 210,000 to about 100,000. That meant projects that had been in the works, such as a new snow tubing park and enhanced snow boarding area, would be harder to financed, so the resort turned to the general authority.

"Everybody ends up benefiting from this one," Vicary said. "It really helps the local area here in terms of continuing Whitetail's success and growth. We bring a lot of money into the local economy -- hotels, restaurants, gas stations benefit by the 200,000-plus skiers we bring to the area."

The suit, filed in Dauphin County, asks the court to either dissolve the authority or restrain it from purchasing Whitetail. No court date has been set.

Calls to the Franklin County Commissioner's office and Treasurer's office were not returned yesterday.

Rachel Nichols, a spokeswoman for Whitetail, said the resort is exploring other funding options in the private sector, although she declined to specify them.

"Basically, our take on it," Nichols explained, "is that we plan to go full steam ahead for the '98-'99 season no matter what happens."

Pub Date: 9/15/98

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