RESORTS LOOK TO END SLIDE.

Byline: Sherri Buri McDonald The Register-Guard

With Thanksgiving fast approaching - the target season opener for local ski areas - ski operators are praying for snow.

But they know that it will take much more than a heavy snowfall this season to secure their long-term futures.

Like other small, independently owned, lower-elevation resorts across the country, Willamette Pass and Hoodoo, are struggling for long-term survival.

And it's unclear how they'll fare in that struggle.

Hoodoo owner Chuck Shepard and Willamette Pass owner Tim Wiper both recently spent millions of dollars to improve their resorts, only to collide last year with the worst ski season in the past decade.

Hoodoo had 19,887 skier visits last year, down 67 percent from a year earlier. Willamette Pass had 26,946 skier visits last year, down 59 percent from the previous year.

Shepard has spent $12 million to fix up his resort since he bought it in 1999. It hasn't had a profitable year yet.

Shepard, a major residential landlord, said his nonski businesses are doing well, so he's not in financial danger.

"The situation is more like, how long do you want to keep losing money" (on the ski area), he said.

Shepard said he realizes Hoodoo cannot survive solely on the winter ski business, so he's trying to build a complementary business during the other seasons managing campgrounds near the ski area.

Shepard speculates that something has to give in the next three years, and he's hoping it will be the U.S. Forest Service, allowing him to expand Hoodoo's campground business.

"I've asked the Forest Service to look at what we're doing, and it hinges on whether they feel that keeping Hoodoo around is important," Shepard said.

Shepard is in talks with the Forest Service to try to increase the number of campgrounds Hoodoo Recreation Services manages, and to lengthen management contracts. They currently run for 10 years with a five-year renewal.

"We're reassessing our recreation sites, then we'll be looking for partners to provide recreation services at those sites," said Doris Tai, recreation staff officer for the Eugene-based Willamette National Forest. "Until we get through that process, we're not even sure which campgrounds we're talking about," she said. "When we do know, we'll be talking with Chuck and others about how to turn that into a long-term partnership."

Less is known about the financial situation at Willamette Pass. Wiper did not respond to several requests by The Register-Guard to be interviewed for this story.

But last month, Willamette Pass made the unprecedented decision to operate only four days a week this season: Thursday through Sunday. In recent years, it had operated seven days a week.

In late September, Wiper sold his property on Coburg Road in Eugene that housed Ullr Sport Shop - for reportedly more than $1 million - even though that left the ski area without a sales office and rental outlet in Eugene, just months before entering its winter season.

And early last month Willamette Pass paid a big property tax bill of $180,570, including $35,610 in interest for three years of delinquent taxes, for the ski area's main property tax account, which is in Klamath County, county records show.

In an attempt to level out the peaks and valleys of the ski business, Hoodoo and Willamette Pass are following the lead of many ski resorts nationwide that are expanding their winter activities and trying to become all-season operations.

"They're doing what most ski areas are doing these days," said James Chung, head of Reach Advisors, a Boston-based strategy group that works with ski areas nationwide. "A resort that runs in the winter is cash-flow positive only about three months a year, so ski areas across the country are trying to expand winter business to new customer sets and extend their season into the summer," he said.

To attract new winter customers, many resorts have developed "tubing" areas, where people ride down the hill on inner tubes.

With modest start-up costs, "tubing has delivered a good economic payback," Chung said. "You're not selling a cheaper ticket for tubing to someone who would have bought a ski lift ticket. You're selling tubing passes to a different customer."

Willamette Pass introduced tubing in the late 1990s. Its five-lane area operates 10 a.m.-4 p.m. on weekends and holidays. Cost is $10 a person for the first two hours, and $5 for each additional hour.

"It's not a huge money maker, but it's another offering to get people on the hill," said Willamette Pass mountain manager Ray Gardner.

Hoodoo opened its Autobahn tubing area two seasons ago. After upgrading it, Hoodoo was looking forward to the Autobahn's big coming out last year. But the snow didn't show up.

"We had it open maybe one day last year," Shepard said.

This year, Hoodoo is hoping to show off what Shepard calls "one of the best tubing areas in the country." It features 16 runs when the snow is above five feet. The Autobahn is open Friday-Sunday and holidays 10 a.m.-4 p.m. Cost is $20 a day for kids 11 or younger and $25 a day for those 12 or older. Or a tuber can buy 10 runs for $10.

Shepard said tubing has long been part of Hoodoo's master plan.

"We knew the demand was high for something nonskiers could do," he said.

The more people on the hill - whether skiers or tubers - the more crowded Hoodoo's 60,000-square-foot day lodge, and the bigger the sales of cheeseburgers and hot chocolate.

"From a business point of view, either one will come up and eat and take part of the facilities," Shepard said.

Chung agreed. "A lot of these small mountains make money on lift tickets and cheeseburgers," he said. "For every $1 for a lift ticket, they collect 50 cents to $1 from other sources.

"I'm not belittling that," he added. "If you've controlled your costs and the snow is good, the profit margins are pretty good in this business."

But good snow is a big if.

Some fear that global warming may be starting to play a role.

Last year, Oregon State University issued a scientific statement on climate change in the Pacific Northwest, which found that average temperatures in the region increased in the 20th Century by 1.3 degrees. They expect the warming to continue with an increase of 2.7 degrees by the 2020s.

Snowpack in the region's peaks also is shrinking, with average water content declining 30 percent between 1950 and the 1990s, the scientists found.

Lower-elevation resorts are especially vulnerable to these trends.

"That's their Achilles heel," said Ralf Garrison, a Colorado-based expert in destination mountain travel. "It's not just a matter of precipitation, but a matter of that precipitation coming in the form of rain instead of snow," he said. "There are a few resorts that live and die based on a few degrees difference in temperature."

Some Pacific Northwest resorts have snow-making capability, but they usually make snow to allow the resort to open a minimal amount of terrain when natural snow is sparse, or to patch skiers to more reliable higher-elevation snow, said Scott Kaden, president of the Pacific Northwest Ski Areas Association.

Willamette Pass has snow-making machines; Hoodoo does not.

Controlling costs also is a challenge, as Willamette Pass and Hoodoo expand their winter offerings and try to build their summer seasons.

Three years ago, Willamette Pass spent $3 million installing a high-speed, six-seat lift to Eagle Peak summit. The lift converts to an 8-person gondola in the spring.

The Eagle Peak Accelerator was billed as the "biggest and fastest chair lift in Oregon." Willamette Pass officials unveiled it in 2002, with high hopes of breaking their 1998-99 record of 92,501 skier visits.

That hasn't happened, though. The resort had 48,738 skier visits in 2002-03; 65,883 in 2003-04 and 29,946 in 2004-05.

To help pay for the lift, Wiper took out a $1.12 million small business administration loan in May 2003, said Steve Dignam, a program manager with the Lane Council of Governments. It's a 20-year loan with a 6.1 percent interest rate. Wiper also obtained bank financing for $1.1 million, Dignam said.

Some people familiar with Willamette Pass think the chair was a good investment, while others think it was unnecessary for a small mountain and wonder whether it will ever pay off.

"I think it's wonderful that it was put in," said Dale Berg, co-owner of Berg's Ski Shop in Eugene.

A four-seat lift probably could have done the job, but this may better serve the future, he said.

"Who needs a six-seater chair at a resort like that?," asked skier Abby Gershenzon Pearce, a season pass holder at Willamette Pass for the past three years.

"Every once in a while for fun we try to fill it up," she said. "I think that was senseless to put that in."

The major resorts of Telluride in Colorado and Heavenly Valley at Lake Tahoe have successful gondola systems, said Garrison, the Colorado-based expert. But he added that he hasn't heard of any smaller resorts taking the leap.

Chung said he knows of some East Coast resorts that invested in similar lifts that now are facing financial difficulties.

"It's a stretch for a small mountain," he said.

Willamette Pass has been pleased with the lift, which converts to gondolas in the spring, said Gardner, the ski area's mountain manager. It enabled Willamette Pass to begin summer operations, and "we think it's huge to our long-term success," he said.

This past summer 5,000 people paid to ride it, including sightseers, mountain bikers and disc golfers, Gardner said.

The mountain was open in the summer Friday-Monday, and some travelers made it their highway stop, he said.

"The nice thing about summer is that everyone can participate," Gardner said.

The gondolas are wheelchair accessible and sightseers of all ages enjoy the view during the 10-minute ride to the summit, he said.

"There's a real range of summer visitors, from seniors bused in from senior centers to mountain bike riders to families with little kids," Gardner said.

"The unknown was the dynamic between them," he said. "I've been impressed; The mountain bikers will let a family that just arrived go up first, without us even having to ask."

Willamette Pass's challenge will be to make the summer business viable.

Resorts that have a thriving summer season, such as Mt. Hood Ski Bowl, tend to be near a large city or a major tourist destination.

"If you're out in the sticks alone with nothing around you, it's hard to build a summer business," Chung said. "It helps if you're near something else that draws activity."

Hoodoo also has diversified into the summer, and had hoped to diversify even more, Shepard said.

Hoodoo manages more than 70 campgrounds in the Willamette and Deschutes National Forests and owns two RV parks.

"It's not a huge moneymaker," Shepard said. "We had the best campground season we've ever had last year, but the best season doesn't nearly make up for the winter loss" at the ski area.

Hoodoo's campground and ski area businesses are so intertwined now, Shepard said, that the future of the ski area depends on the success of the campground business.

When Shepard bought Hoodoo seven years ago, he had much more ambitious plans for the summer season. Those plans factored into his decision to build a $6 million, 60,000-square-foot day-use lodge.

Shepard said he submitted an application to the U.S. Forest Service in 2001 requesting permission to add summer attractions, such as an alpine slide and zipline course. Early this year, Shepard finally got the green light on the slide.

But by that time, Shepard said the window of opportunity had passed.

While waiting for approval, the cost of the petroleum-based materials for the slide quadrupled, and "we decided that it no longer is cost effective to try it," Shepard said.

He said he also spent nearly $50,000 on required environmental and other studies to accompany the application.

Some area residents wish that Hoodoo would offer more summer activities.

"I've used an alpine slide at Jackson Hole, (Wyo.), and it's a kick," said Troy Meyer, a 26-year-old Eugene resident and systems administrator at the University of Oregon. "I could see something like that flying. I could see people camping at Hoodoo and using the slide."

Ski area operators say one of the biggest advantages to operating in the summer is being able to keep their key employees year-round.

Hoodoo has a core staff of 12 employees, and hires 125 more for the winter season, plus 50 more who volunteer for ski patrol, Shepard said.

Willamette Pass has seven or eight year-round staff, and grows to 380 employees in the winter, including some volunteer positions, such as ski patrol, Gardner said.

REGIONAL SKI AREAS

Hoodoo: 75 miles northeast of Eugene-Springfield on Highway 126; base elevation, 4,668 feet; summit, 5,703 feet.

Mt. Bachelor: 145 miles east of Eugene-Springfield; base elevation, 6,300 feet; summit, 9,065 feet.

Willamette Pass: 60 miles southeast of Eugene-Springfield on Highway 58; base elevation, 5,120 feet; summit 6,683 feet.