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Sunday, December 12, 2010
Squaw Valley sale marks end of Cushing era
By Seth Masia
In November, when the Squaw Valley Development Co. was sold to KSL Capital Partners, it marked the end of 61 years of control by the Cushing family of California’s winter Olympic venue.
Squaw Valley was the brainchild of Reno's Wayne Poulsen (at right, with wife Sandy), who first skied into the valley in 1931, two years out of high school. A powerhouse athlete and coach in Sierra ski competition in the late 1930s, Poulsen became a pioneer of rope-tow skiing in the Tahoe area, then an instructor at Sun Valley and then a U.S. Army Air Force pilot flying Pan Am Clippers to supply Pacific combat zones. He invested every dime he earned in Squaw Valley real estate. In 1945, after discharge as a lieutenant colonel, Poulsen pioneered new routes for Pan Am. With his wife Sandy he built a home at Squaw, and began looking for investors.
He found Alex Cushing, a New York socialite, Wall Street attorney and Navy veteran. Cushing and his friends, including Lawrance Rockefeller, in 1948 invested about $400,000 to build a lodge and lifts; Poulsen’s contribution was the 640 acres he owned right where the lodge and lifts were to be built (he then bought another 12,000 acres on the valley floor for future development).
Cushing (left) proved to be an aggressive developer and promoter, eager to build the resort fast. Poulsen wanted to plan and build with conservative respect for the harsh alpine enivironment. A month before the resort opened in 1949, Cushing took advantage of Poulsen’s absence on a Pan Am flight to vote him off the board of directors. Thereafter Poulsen’s business was real estate development in the Valley, while Cushing ran the resort and the mountain.
Cushing envisioned a vast and varied resort on the European model. He hired Emile Allais as his first ski school director. Allais, and his successor Joe Marillac, made sure that Squaw became a magnet for world class skiers. Top skiers loved Squaw’s cliffs, and its immensely varied and often challenging snow conditions. The steep terrain drew the attention of photographers and film-makers like Warren Miller, who spent a couple of winters there in the early days and helped to popularize the resort. The extreme terrain also produced powerful native skiers like Jimmie Heuga, the Poulsen and McKinney clans, Edie Thys Morgan, Kristin Krone and Jonny Moseley. Meanwhile, the resort became one of the incubators for the craft of extreme skiing, famous for producing talents like Rick Sylvester, Robbie Huntoon and Scot Schmidt.
Characteristically, Cushing.threw lifts up every peak within reach, opening super-steep terrain that would have been considered prohibitively dangerous anywhere else. Lift towers were built in avalanche zones, and some were swept away. Squaw employees habitually hooked an arm around the chairlift hanger in anticipation of a catastrophic stop.
In 1954, with backing from Lawrance Rockefeller and the governor of California, Cushing submitted a bid to host the 1960 Winter Olympics – and after dogged lobbying of the IOC, scored one of the great sports marketing coups of all time. The ’60 games were the first ever to be televised, the first with an Olympic Village to house the athletes, and the first to be electronically timed. Television made Squaw Valley a household name, and helped the heady growth of the ski industry through the following decade. In the course of development Poulsen staged a successful fight to keep the Meadow from being paved over for Olympic parking.
Cushing’s aggressive growth policy drew the ire of state bureaucrats and environmentalists. He was a great believer in “build it first, then get permission.” He was an early investor in every ski lift innovation proposed, and the result, for some decades, was the most efficient uphill transport network in North America. At one point some 33 lifts served 4,000 acres of patrolled terrain, hauling 49,000 skiers per hour. Cushing paid a price: Squaw was repeatedly fined for cutting trees and building before permits were final. The low point of Squaw’s lift operation history was the 1978 disaster when a cable derailed in a wind storm and fell onto a tram car, killing four passengers.
Cushing acquired a reputation as a difficult man to do business with. Over the course of decades, a number of projects to build lodging at the base area collapsed amidst recriminations. With an inadequate bed base, most Squaw Valley skiers had to drive in from lodging in Truckee and Tahoe City. Despite clearing snow from a vast parking lot, Squaw never seemed to have enough parking. The lot gained a few more acres when Blyth Arena, the historic Olympic hockey venue, collapsed under the weight of uncleared snow in 1983. Eventually, Intrawest Corp. was successful in negotiating a deal to build a village with about 285 rooms in the parking lot, beginning in 2001. Ironically, the village reduced the available parking and actually cut the number of lift tickets sold thereafter. Intrawest, crippled by the 2009 recession and facing foreclosure, sold the village to Squaw in January 2010 for an undisclosed sum that probably represented a small fraction of its cost to build. KSL is thus acquiring a viable resort at well below its original value.
Poulsen was elected to the U.S. National Ski Hall of Fame in 1980, and died in 1995. Cushing was inducted into the Ski Industry Hall of Fame in 1999 and into the U.S. National Ski Hall of Fame in 2003. He died, at 92, in 2006.
The new corporate owner, KSL Capital Partners, owns dozens of golf resorts and a cruise line. It’s part of the Kohlberg Kravis Roberts & Co. complex headed by financier Henry Kravis. Its managing directors are two former Vail Resorts executives: Michael S. Shannon was president and CEO of VR from 1986 to 1992, and Eric C. Resnick was treasurer, and then VP of strategic planning and investor relations from 1996 to 2001. Another executive, Marla Steele, was Vail’s director of strategic planning from 1998 to 2007. The company is pledged to invest $50 million in capital improvements.