Funding New York’s State-Run Ski Areas

OpEd: Funding NY State Run Ski ResortsA recent editorial in the Glens Falls Post Star asked the question: “How much longer can New York taxpayers continue to subsidize ski centers at Whiteface and Gore Mountain?”

The next paragraph yielded a vague response: “It’s time for state officials to rethink the financial and ownership model that has sustained them for the past 30 years.”

With a sluggish economy and state and local tax revenues in decline, there’s no question that public funding for everything is becoming problematic. While the editorial poses a legitimate question, it ignores some important issues, and has logical inconsistencies that make it hard to take seriously.

The piece states further that ORDA operates “vitally important tourist attractions, generating tens of millions of dollars each year in business revenue, sales tax and occupancy tax money. Their continued operation and maintenance is vital to the state and regional economies.”

The conclusion is that venues currently run by ORDA should continue to operate, but must be privatized to relieve the state of investments for infrastructure and operations. Unfortunately, it’s just not that simple.

One member of the NY Ski Forums pointed out what he called the “constitutional elephant” in the room — i.e. the editorial makes no mention of Article 14 of the NY state constitution, which clearly states that forest preserve lands “shall not be leased, sold or exchanged, or be taken by any corporation, public or private, nor shall the timber thereon be sold, removed or destroyed.”

The state constitution could be amended. During World War II, when titanium was discovered at the Tahawas iron mine, after lengthy discussion, an exception was made. But amending the constitution isn’t a simple matter and challenges would come from many directions.

All three state run ski-mountains are nearly self-sufficient in terms of operations. That is, when you look at total annual revenue compared to cost to operating those hills, the numbers are close. When compared to the income and tax revenue generated, that investment is minimal. With regard to operating budgets, based on an analysis of ORDA annual reports, most of that state funding is required to cover losses on the other (non-skiing) venues in Lake Placid.

Constitutional issues aside, leasing or privatizing the ski areas may well work. But while debates about who can better run a ski area — private enterprise or the state — are entertaining, that discussion misses the point. It’s hard to imagine how a private operator could generate enough revenue from Whiteface and Gore to cover the operations of all the venues in Lake Placid, and generate enough profit to justify the risk.

Over the last ten to fifteen years, private ski areas in the northeast have improved their infrastructure by using profits from real estate development to pay for upgrades, and grow their base of beds. Times have changed, and the real estate market will take time to recover from the current economic malaise. But the last decade of the expansion has yielded big, private ski areas that have modern lifts, energy efficient snowmaking and built-in communities that are vested in those ski areas by the very nature of their real estate investments.

We have some points of agreement with the Post-Star editorial board on this issue. Lake Placid is unique and the village and its Olympic facilities are part of an historic destination that brings in millions of tourist dollars to New York. But the idea that the state could “sell off the revenue-producing facilities” and “retain the historic Olympic venues” doesn’t add up. How does it help the state to part with revenue producing venues and retain the non-profitable sites?

We don’t have our head in the sand on this issue. We know that funding Whiteface, Gore and Belleayre is going to be a huge political challenge in the future. But selling or leasing state land is problematic, and finding a buyer or lessee for the unprofitable venues is unlikely without some kind of government subsidy or guarantee.

In our opinion, the NY state ski mountains should use whatever reduced state funds are available to focus on maintenance and a reduced schedule of critical infrastructure replacements.  Each year, one lift should be replaced to keep them running, rotating that investment between Belleayre, Whiteface and Gore.  Both ORDA and the DEC are making-do with less and bringing Belleayre into ORDA could do even more to cut costs.

Ski areas are important in the Adirondacks and Catskills. They represent a significant way to boost the economy that is compatible with Article 14. Most people seem to agree that the funds invested create jobs within the forest preserve with a significant ROI.

With the remaining venues, a cost-benefit analysis should be done. If those venues create as much tourist revenue as the Post-Star suggests, funding should continue. It’s important in this case to look at the big picture: those “unprofitable” venues contribute to Lake Placid’s status as a unique mountain destination. We hear over and over in our forums that people plan week-long family vacations in Lake Placid because they know that if the fickle eastern weather doesn’t deliver great skiing, they can still have a good time.

Finally, it’s no secret that we love NY state skiing. Our love for the Adirondacks and the Catskills isn’t because of superior snowfall or unrivaled terrain. New York offers a different kind of ski experience. Looking out from the tops of our mountains, we see primarily wilderness. In our opinion, New York should work within this unique land use model to seek a path forward that respects Article 14 while supporting jobs and vibrant communities in both parks.

12 comments on “Funding New York’s State-Run Ski Areas

  1. Thoughtful and well written. This is what should have been in the GF Post Star. You should submit this to the Post Star.

  2. I second everything already said, especially the part about submitting it to the post star.

  3. Excellent rebuttal – hope you plan to submit this to not only the GF paper but also the Albany one as well.

  4. Well written piece. There are many non-skiers across the state and they have little sympathy when it comes to funding priorities comparing ski areas, golf courses, and campgrounds to social programs and the like.

    Years ago (DEC era, 80s) I remember a public meeting held at the Inn on Gore in response to plans to operate Gore only on weekends and holiday weeks. It was of course never implemented but it was on the table even for that shot time. I keep looking for similar “cost cutting” proposals to be presented again.

    My opinion on ORDA’s poor (alright non existent) Summer programs at Gore is no secret. But I keep thinking there could be a local option to run the ski bowl – lift and trails in the Summer. Then I thought why not also in the winter – let the town run the ski bowl and fire up a $30 lift ticket just for the ski bowl – see what happens.

  5. We appreciate the critique of our editorial and your thoughtful points. I believe it would be helpful to clarify the intent of the editorial and review for your readers some of the editorial’s main points. I also encourage all your commenters to take the time to read or re-read the piece before offering their own critiques.

    The editorial simply called for a review of the existing arrangement given the significant decline in taxpayer support for ORDA facilities over the years. The existence and success of these facilities depends in large part on taxpayer support through the public authority — otherwise, there’d be no need for the authority to exist. That taxpayer support is rapidly declining, as the editorial documented. Reduced taxpayer funding will ultimately affect the viability of these facilities, and by extension the communities that are supported by them. We don’t see any lapse in logic or facts in drawing attention to real and worsening economic conditions and pointing out the various problems associated with the current funding arrangement and with possible solutions (such as how to pay for the Olympic venues).

    Like you, we do not have our heads in the sand about the difficulties of imposing viable solutions. In the editorial, we made a couple of suggestions, but in no way did we claim to have all the answers. We didn’t come out and advocate selling the facilities, for instance, nor did we say it should be ruled out. Our newspaper has long been an advocate for the state allowing more development in narrowly defined areas of the Adirondack Park to boost economic development. That certainly could apply to the ski areas when it comes to future privatization of the facilities.

    We not only welcome your organization’s input and input from others, we outright asked for it in the editorial: “We’re sure others can come up with creative ideas to ensure that these facilities remain viable without having to rely on a dwindling pool of taxpayer money.”

    There clearly is no agreement on how to deal with this situation, as evidenced by the variety of comments to the editorial on our website. To that end, the editorial accomplished its stated goal, which was to generate debate and discussion on the issue. We hope your organization keeps this issue in the forefront and continues to solicit thoughts and ideas. — Mark Mahoney, Editorial Page Editor, The Post-Star

  6. Great op-ed piece, and well thought out response from the Post Star. I hope they publish these thoughts.

    I think it all will boil down to this:

    From Mark Mahoney: “Our newspaper has long been an advocate for the state allowing more development in narrowly defined areas of the Adirondack Park to boost economic development.” It’s going to require the State Assembly to pass a constitutional amendment to allow “more development” in the Park. What is the realistic chance of that happening in the next few years? It has never even been close to passing before, but are these extraordinary times?

  7. For either ski area to be leased or sold, a constitutional amendment would have to pass both houses of the Legislature, twice each, in different years. Then the voters would have to approve it in a referendum. The chances of this happening are slim to none.

  8. Thanks for writing this piece. The original editorial omits the fact that the primary revenue driver in many privately owned alpine ski areas is real estate, i.e. condo sales. As far as I’m aware, condos cannot be built on state land next to Whiteface. Personally I’d be against any constitutional amendment allowing development there. Even if development were allowed, I don’t see where the economy will support second home construction any time soon.

    ORDA has some great properties, but they could improve their marketing. I spend way more time skiing cross-country than downhill, and as far as I’m aware there’s almost no marketing/social media leverage of the Mt van Hoevenberg as a standalone tourist destination.

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