- The Washington Times - Friday, November 19, 2004

OLYMPIC VALLEY, Calif. — Gliding down the mountain above the ski runs in the Squaw Valley cable car, it is easy to imagine the snow-covered buildings nestled below as a tiny village under the Christmas tree.

A few miles to the south, the gondola at Heavenly Mountain Resorts overlooks perhaps the most picturesque alpine lake in America as it slips past the hotel-casinos at Lake Tahoe’s south shore.

The ski runs haven’t changed all that much, but the surroundings have. Sierra resorts don’t just want to be a place people want to go to. They intend to be a place people don’t want to leave.

“The owners of these resorts are trying to position them as not just weekend resorts, but as destination resorts where guests are more likely to stay for longer periods of time,” said Will Marks, an analyst with JMP Securities.

Heavenly, which was bought in 2002 by Vail Resorts from American Skiing Co., has teamed with Marriott International to transform the once-tawdry south shore of Tahoe into a blend of time shares and upscale shopping and dining.

About 30 miles to the north, Intrawest Corp. has joined with privately held Squaw Valley to develop a growing village of condos, shops and restaurants.

While other resorts in the Tahoe Basin are expanding their lodging and upgrading their facilities, Heavenly and Squaw have emerged as the region’s leaders, said Mr. Marks, who researches all three of the public companies.

“I think Intrawest and Vail have proven over the last several years that by investing capital in their resorts they are increasing their market share,” he said.

The developers take different approaches to achieve the same goal.

At South Lake Tahoe, Marriott had to build amid crisscrossing city streets, including U.S. 50, which bisects the town. Intrawest had the base area at Squaw to play with and developed a more European village, with pedestrian-only cobblestone streets meandering amid the shops and condos.

A study is under way to analyze the effects of redevelopment on the economy of South Lake Tahoe, but numbers are mixed. The Lake Tahoe Visitors Authority says the Tahoe basin attracts 2.2 million visitors a year, 1.3 million of them to the south shore. The South Lake Tahoe room tax collection in June was up 5 percent, while rooms rented were down 3.3 percent from the previous June.

Adam Aron, chairman and chief executive officer of Vail Resorts, said that two years ago, just before his company bought Heavenly, the resort sold 830,000 lift tickets. This past year, the number was 965,000.

“That’s a big growth and that’s showing that the people who visit Lake Tahoe, who live in a three- to four-hour radius of here really are responding to the quality improvements that we’re making,” he said. “What we said was we were going to bring Colorado-style skiing to Lake Tahoe, and so far we have been rewarded.”

Vail, Marriott and a coalition of local government groups have committed $250 million to replacing the T-shirt shops, tattoo parlors and mom-and-pop motels on the California side of the state line with resorts, upscale boutiques and restaurants, and a multiplex cinema. All are centered on Heavenly’s centerpiece gondola, which whisks skiers and sightseers 2.4 miles from the Marriott lodges at the base close to the 10,082-foot top of the mountain in 12 minutes.

Intrawest also plans to invest a quarter of a billion dollars in its four-phase development of condos, shops and restaurants, offering resident skiers lifts a few steps from their doors at the site of the 1960 Winter Olympics. Squaw has invested $30 million over the past decade on its lifts, restaurants and other amenities.

At Tahoe’s south shore, the gondola has replaced the dreary bus ride from the motels to Heavenly’s rustic base station, where ski boots were clumped on wooden floors and the restaurant menu was heavy on burgers, fries and chili.

If tourists at the south shore don’t choose the lodgings on the California side of the line, there are the hotel-casinos on the Nevada side, a two-block walk from the gondola.

Nineteen ski resorts surround the Lake Tahoe area, all offering attractions for skiers and riders — location, price, challenge. Heavenly and Squaw aim to appeal to more than the day-trippers from the Bay Area or Reno, Nev., by offering a second home on the hill.

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