Wintergreen, VA – Wintergreen Resort is Nelson County, Virginia’s largest employer. Lean snowfall this ski season, however, has forced the resort to tighten its belt and one of its first cost-cutting measures is to reduce the size of its work force this week.
“Of all the steps we’ve considered in dealing with our current situation, there is nothing nearly as difficult as informing associates who have made contributions to Wintergreen that they no longer have a job,” said Hank Thiess, general manager of Wintergreen Partners, Inc., said of the company’s restructuring effort to eliminate 12 positions and save $600,000 in annual labor and benefit costs. “It affects them, their families, and ripples through the community. It is a very painful process to go through.”
Wintergreen’s workforce includes approximately 350 year-round position, and the number swells to roughly 1,000 people during the winter months. Details regarding the ski area’s layoffs, including which positions are to be eliminated, have not yet been announced. They arise from an exceptionally warm winter and the resulting termination of a $3 million line of credit by Bank of America, and are part of the company’s redoubled efforts to generate revenue and save approximately $1.5 million in annual operating expense.
On Tuesday, Wintergreen began mailing dues renewal notices to its 1,700 member-owners for 2013. These bills would ordinarily be sent around June 1. This measure is expected to generate approximately $3.0 million to $3.5 million in cash receipts over the next thirty days and will be used to help cover a projected $4 million to $4.5 million revenue shortfall due to the warm winter and reduced skier traffic. In addition, the early dues payments will provide liquidity to Wintergreen in light of Bank of America’s decision last week to terminate the company’s line of credit.
Other cost-saving measures under consideration include modifications in operating hours for some resort amenities, reductions in the use of consultants and contractors, potential consolidation of some resort operations, and increased cross-utilization of Wintergreen associates in different areas of the resort. Thiess expects these changes to be introduced in the coming weeks, with the net effect of saving the Company approximately $1.5 million per year beginning July 1.
In addition to these operational changes, Wintergreen is pursuing a $6 million private debt offering to its members. Expected to commence on March 1 and close by April 30, proceeds from the offering would be used to replace the terminated line of credit and provide potential funding for any settlement related to the Virginia Department of Taxation’s audit of the company’s 2008 conservation easement on a 1,422-acre parcel owned by the resort. The Department of Taxation has questioned the 2008 valuation of the easement, and the Department and Wintergreen are currently engaged in discussions to resolve the matter.
In the meantime, the resort’s facilities and amenities continue to operate on a normal business schedule. With colder temperatures forecast for the next several days, snowmaking operations are proceeding at maximum capacity, and Wintergreen officials say that they anticipate the best trail conditions of the season for the upcoming weekend.