Originally Posted by Wall Street Journal
FORT WORTH, Texas -- When summer hits the parched, flat prairie here, temperatures can spike to 100 degrees and firefighters get busy responding to the grass fires that routinely flare. To Charlie Aaron, it's a perfect time to go snowboarding.
Mr. Aaron and several investors have ambitious plans to build a 25-story mountain with slopes for year-round, outdoor skiing and snowboarding. Surrounding the mountain will be an "Alpine Village" with chairlifts, ice rinks, a bobsled track, a winter wonder-park for children, a retail center, a 600-room hotel and a convention center. Total cost of the proposed Bearfire Resort: $696 million.
Bearfire is just the latest outdoor leisure venture to make a giant bet on defying nature in wildly improbable places. Dubai, in the Persian Gulf region, has an indoor ski dome that is part of its Mall of the Emirates. It plans to open another next year that revolves and has polar bears. A $35 million artificial whitewater-rafting center opened outside Charlotte, N.C., in September.
But even Bearfire's investors acknowledge that people are skeptical about summer skiing in Texas -- outdoors on artificial slopes that are without snow and aren't even cold. "There are some naysayers and people who can't really wrap their brain around it," says the 53-year-old Mr. Aaron, president of the investor group. Originally from San Francisco, he has spent most of his career in sales, marketing and public relations. "They have the same questions that everybody else has, because it's really incongruous, is it not?"
Saving a Trip
He insists the nearly six million people who live in metropolitan Dallas-Fort Worth, will find, in winter too, that it is easier and cheaper to ski Bearfire Mountain than to fly 700 miles to Colorado. Texans made up 6.5% of all visits to Rocky Mountain area ski resorts last year, second only to Coloradans, according to a survey by the National Ski Areas Association, a trade group in Lakewood, Colo.
Included in the group of investors is former Republican House Majority Leader Dick Armey, who says he has invested some of his own money. Mr. Armey says he likes the idea of winter sports in the sweltering Texas summer. "I'm a grandfather in Texas and there's not a summer that goes by when I'm not moaning over the fact that I can't be outside with my grandkids except neck deep in a swimming pool," says Mr. Armey, who now practices law. "Wouldn't it be great if there was a place where we could be outside and enjoy ourselves, even in August?"
The technology that makes it possible, which is known as Snowflex, uses water-misting systems to create a nonrefrigerated surface -- think of wet, white Astroturf with bristles -- that is slippery enough for skiing but with enough grip for turning. A few Snowflex slopes are operating in Europe, including one that is open year-round in Noeux-les-Mines, France. It is built on old coal-mining slag heaps in an area near Lille that isn't naturally conducive to skiing.
But this is Texas, so it must be bigger. With 650,000 square feet of skiable surface, the Bearfire slopes promise to be six times the size of the artificial slope in France. The mountain's superstructure is supposed to rise about 240 feet and require 7,000 tons of steel.
Wendell Jacobson, an investor in Bearfire and president of Management Solutions Inc. in Fountain Green, Utah, a multifamily-residence management company, says investors will ultimately put up $150 million, and the rest will be borrowed. Mr. Jacobson said the Bearfire investors are exploring several financial alternatives and are contemplating hiring advisers from UBS and Merrill Lynch, among others. The group plans to open the resort in the fall of 2009.
Mr. Aaron has never been involved in a large-scale development project. He has brought in family-entertainment industry veterans, including the Baker Leisure Group, of Orlando, Fla., to pull together the business plan and Greg Damron Design Inc., whose résumé includes the master plan of Universal Studios Japan, to design the resort.
Keeping Things Cool
Unlike existing domed ski resorts -- including the one in Dubai -- the winter activities at Bearfire will be outdoors. The polymer surface will feel cooler than the air in summer, but it won't be cold. To battle the heat (in an area that had 43 days in which the temperature topped 100 degrees in 2006), the developers plan to install misters, shades and turbo-fans, to reduce the temperature by about 20 degrees where people are lining up.
Mr. Aaron says Bearfire's consultants predict 2.4 million visits in the first year, but that the venture will still be profitable if the numbers come in 20% below that. To make a go of year-round skiing, Bearfire also will have to change the mind-set of the typical skier who is eager to hit the slopes in November but whose interest wanes with the first whiff of spring.
"I'm not convinced that people will have the desire to ski in the warm weather," says William Marks, an analyst who follows ski-resort companies for JMP Securities. "Do they want to go on a ski vacation when kids are off playing baseball or soccer?"
Bearfire will face strong competition for local leisure dollars in summer. In addition to Major League Baseball's Texas Rangers franchise and a minor-league baseball team (the Fort Worth Cats), the area has a Six Flags Over Texas amusement park and a giant water park called Hurricane Harbor. Just 10 miles away from the proposed Bearfire site, Great Wolf Resorts Inc. is building an indoor water-park resort with its own 400-suite hotel. In winter, Bearfire would have to compete with ski areas in Colorado and New Mexico that charge comparable fees but have real snow. An all-day pass for an adult will cost about $70 at Bearfire, not including rental equipment or lessons.
Mr. Aaron says he's confident the project will avoid the unanticipated costs of some large projects. Mr. Marks says most of the hotel developments expected to open between 2006 and 2008 are coming in over budget, primarily because of increased construction costs. In an extreme example, the cost of the Meadowlands Xanadu, a mammoth retail and amusement development being built in northern New Jersey that will include the first domed artificial-snow ski facility in the U.S., ballooned to $2.3 billion from $1.2 billion in just two years. Colony Capital took over the Xanadu project in November after the original developer, Mills Corp., wasn't able to finance the project's cost.
Paul Hilbig, an avid skier who attended the University of Texas at Arlington, tried out several Snowflex slopes in the United Kingdom in 2005, courtesy of Bearfire investors. At first, he was skeptical of the technology, but he found that it felt remarkably like real snow. "If you were blind, you couldn't tell if you were skiing on one or the other."
