Chairman of American Skiing resigns

Collapse of proposed merger may have pushed Les Otten to quit

— Steamboat will have less Otten to kick around any more.

Les Otten stepped away from his ski empire on Wednesday. Otten, who built his company into the largest ski area operator in the nation from a single struggling ski area in Maine, was replaced Wednesday as chairman of the American Skiing Company.

American Skiing is the publicly held parent of the Steamboat Ski & Resort Corp.

American Skiing's board of directors named William "B.J." Fair, currently the company's chief operating officer, to replace Otten as the company's chief executive officer following Otten's resignation.

Kathy Connell, both a property manager and president pro-tem of Steamboat Springs City Council, said she saw only one choice, and that was to regard Otten's resignation as a positive sign that American Skiing Company is taking necessary steps toward fiscal recovery.

"Anything American Skiing Company can do to get themselves more fiscally solvent is just vital," Connell said.

"We wish them well, and want them well. Whatever it takes, whether it's a merger, or having Les resign. Doing business as they have is economic insanity."

Connell said that she felt strongly that under Otten, the company was overly preoccupied with real estate development in the face of increasing competition for skiing market share coming from other resorts in Colorado.

"He doesn't seem to have a lot of fear of having heavy debt and that has always concerned me," Connell said. "We've seen a push for real estate development while other ski areas are capturing market share. The driving force of our economy is our ski area."

Otten struggled with his public image in Steamboat Springs, which never quite recovered after American Skiing sought the early retirement of a number of longtime mid-level managers at the ski area here in early 1998.

The departure of the ski area employees here took place just a few months after American Skiing purchased Steamboat and Heavenly Valley, Calif. ski areas for about $325 million in late 1997.

Not long after, bumper stickers began appearing around Steamboat Springs declaring "More Steamboat, Les Otten."

Otten, at times, acknowledged the slight and said he had work to do to repair his image in Steamboat. At other times he laid a portion of the blame for the slow acceptance among buyers of a major American Skiing real estate development here, on negative talk in the community.

Sales of interval ownerships in the Steamboat Grand Hotel still have not reached 50 percent, three years after construction began. The hotel opened in October 2000.

Otten's resignation comes just five days after American Skiing and MeriStar Hotels and Resorts abandoned plans to merge their two companies by the end of this month.

Company spokesman Skip King said Wednesday the failure of the merger did not cause Otten's resignation, but it may have affected the timing.

Otten was to have become chairman of the new company, Doral International, and told Steamboat Today he had no plans to leave the company post merger.

However, Otten, said in a prepared statement on Wednesday that he had been contemplating seeking new opportunities since merger talks began last summer.

Chris Diamond, president of the Steamboat Ski Area, said he has not talked to Otten since the announcement of his resignation. He learned of it via a phone call from Fair Tuesday night. Diamond was hand-picked by Otten to become the top executive at Steamboat. He said their professional relationship in the ski industry goes back almost 30 years.

"The day I went back to work at Killington (Vermont) after Viet Nam was the same day the company sent Les to take over Sunday River (Maine)," Diamond said.

Otten would later purchase the struggling Sunday River from the Sherburne Corp., and turn its fortunes around, precipitating the beginning of what would become the biggest ski area operating company in the U.S.

Otten turned Sunday River into the second biggest ski resort in New England, taking it from 40,000 skier visits a year in 1980 to 550,000 in the mid '90s.

"He did just an absolutely extraordinary job at Sunday River," Diamond said.

Diamond speculated that when the merger with MeriStar fell through last week, Otten's vision for his future with the company changed.

"My take is he had a lot of hopes on the merger. The word I got is that he definitely had plans to be doing something else. He was going to be getting out of operations, out of the day-to-day operations (of the company). I'm speculating, but when it didn't happen," it might have been difficult to adjust to the change of plans.

King agreed. Removing himself from day-to-day operations would have afforded Otten more time to pursue other interests,

he said.

Paul Clavadetscher, president of Community First Bank in Steamboat Springs, and a former president of the Chamber Resort Association, said more than anything else, the Otten era here signaled a transition in Steamboat.

"I would say the Otten years brought on the first time in Steamboat's history that a company that is publicly traded and publicly owned was our largest employer and economic engine," Clavadetscher said.

For the first time, he said, Steamboat was no longer the "biggest piece of the action" for the company that owned the ski area.

Steve Dawes, a consultant in the property management industry, and a key player in the Chamber's marketing of Steamboat, said that given the financial challenges American Skiing Company faces, change in the company doesn't come as a surprise, yet, he was taken aback by the news of Otten's resignation.

"He kind of put his heart and soul into creating American Skiing," Dawes said.

He said he had formed an impression that the merger with MeriStar might have set the stage for a more graceful, structured exit over time, for Otten.

"Is this the right time for a guy with his passion for the sport to exit?" Dawes wondered out loud.

Dawes said he thought the local business community was working as closely with American Skiing as it ever has this last year. He cited the willingness of the broader resort community to come up with cash to help the ski corp. with airline guarantees needed to bring commercial jets into the local airport during the ski season.

The business community pledged $750,000 this year to augment the $1.4 million budgeted by the ski corp. for airline guarantees.

"That was a great step away from our complete and total dependency on the ski area," Dawes said.

Clavadetscher said he believes the community still needs to adjust to the presence of a publicly traded company that is beholden first, to its shareholders.

"I don't know that Les Otten's resignation will have a big impact on our community," Clavadetscher said. "We need to work closely with American Skiing Company and work closely with Chris Diamond to ensure our financial viability as a community."

Connell said she believes American Skiing needs to do more to adapt its corporate philosophy to Steamboat's individuality. She said Otten hasn't demonstrated that he's sensitive to the community's needs.

"This is one kid that goes out kicking and fighting if whomever owns the ski area continues that mentality," "Connell said. "What about preserving community life? He (Otten) has cared very little for what we brought to the table."

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