Catskill Heritage Assn. claims resort dollar figures are wrong

in

By Jay Braman Jr.
According to the Catskill Heritage Alliance (CHA), the proposed Belleayre Resort at Catskill Park is doomed to failure unless made much smaller, a conclusion based on the results of a study commissioned by the anti-resort group and released to the public Tuesday.
Undaunted, a spokesman for the resort scoffed at the findings, suggesting that the study reached conclusions that are exactly what those who paid for it wanted to see, and that if the public knew who those benefactors are, it would dilute the claims made.
As currently proposed, the resort, a $365 million project, consists of 739 acres adjacent to the existing New York State-owned Belleayre Mountain Ski Center. Information supplied by the developer Crossroads Ventures LLC, states that of that amount, 218 acres will be developed. The overall resort centers around two distinct hotels: Wildacres Resort with an 18-hole championship golf course designed by Davis Love III, and Highmount Spa Resort, both with an extensive program designed to give visitors access to the many specialized outdoor experiences unique to the Catskill Region.
The proposed resort has been under review since 1998 and was downsized significantly in 2007 when the developers agreed to shrink the project’s footprint and sold 1,200 acres of their land to New York State.
But, as that review reaches an end next month, the CHA says that it must be downsized even more.
“If permitted to be built at the excessive size and high-elevation location the developer has insisted on, the proposed resort would not be feasible, could not meet its economic projections and would cause economic as well as environmental damage to the region,” according to a new economic analysis conducted by Public and Environmental Finance Associates (PEFA),” states a press release circulated by CHA last week.
That analysis critiques the recent economic analysis conducted by Crossroads’ consult- ­ing firm HVS.  The CHA report finds the HVS analysis “critically flawed, erroneous, and unreliable for decision-making purposes,” “reflect[ing] yield optimization and goal-seeking” rather than objective evaluation.  
Among other problems, CHA says, the HVS analysis grossly underestimates costs and gross­ly overestimates revenue. 
“PEFA found HVS underestimated construction costs by hundreds of millions of dollars,” according to CHA. “HVS assumed construction costs well below those of other similar base-area resorts, failed to cite for comparison any actual construction costs of similar resorts and failed to show that its construction-cost estimate met the criteria of being within reason or supported by similar projects.”
They also believe that HVS estimated other expenses to be unreasonably low with respect to comparable resorts, low-balled room expenses, administrative and general costs, marketing costs, operations and maintenance, and the cost of a planned golf course.
On the flip side, CHA says that Crossroads overestimates revenues by claiming their project will command the same revenue as top-tier, world-class five-star ski resorts such as those seen in Aspen, Vail, Telluride, Deer Valley and Jackson Hole.
The CHA study suggests that the resort could succeed if it dropped its room count from the 629 rooms currently proposed to only 250.
“At this size, the project would [still] rank among the largest base-area developments in the Northeastern region,” the CHA study states. “It would maintain the viability of the existing lodging sector in the Route 28 corridor along with the character of its existing communities, hamlets and villages that are dependent thereon.”
On Tuesday, Crossroads spokesman Gary Gailes distributed his reaction to the CHA report.
“In response to the so-called economic analysis contracted by the Catskill Heritage Alliance to support their longstanding opposition to the Belleayre Resort project, I would only ask readers of this report to compare the credentials of the internationally renowned consulting firms of HVS, Inc and Ragatz Associates, employed by Crossroads to evaluate the economic viability of the project, versus the firm of PEFA (an anti-development consultant) hired by the financial backers of the Catskill Heritage Alliance,” Gailes said.
“Perhaps if the Catskill Heritage Alliance revealed the source of their funding to hire PEFA, one might better understand the conclusions reached by PEFA,” he added.