The 24/7 Family Business
To really get the Pitchers and the strange and striking success of their Wolf Creek Ski Area in the high lonesome of Colorado's San Juan Range, you need to spend some time with a man born 170 years ago and 6,000 miles from Wolf Creek.
This, at any rate, is the belief of the 91-year-old family patriarch, Kingsbury ("Pitch") Pitcher. Before he says a word about Wolf Creek, Pitch wants to speak of his ancestry—"I can do it in about one minute."
He takes 10 minutes, but nobody's counting. The man, who skied regularly through his mid-80s, is a wonder of nonagenarian focus and vigor. And it's as if he reads from a book, a good one, about the life and deeds of his maternal grandfather, Otto Mears.
Mears, a Russian-born orphan, landed in San Francisco all on his own and penniless at age 11. Pitch waxes biblical: "He worked ever since then...and the years passed." Mears went to Colorado and remade the southwestern part of the state by building toll roads, which he upgraded to railroads networking wilderness settlements and mining towns. A stained-glass portrait of Mears, still widely known as the Pathfinder of the San Juans, adorns the rotunda of Colorado's state capitol.
Mears became a regional omnimagnate, but by the time Pitch was born, much of the great man's empire was lost or on the skids. "I had kind of a strange upbringing," says Pitch, who spent his summers in rough-tough Silverton, Colorado, a mining town in which his family still had business interests, and his school years at the family home in Pasadena, California. Pitch discovered skiing, for which he had a gift, on Mount Baldy in Los Angeles County. He ski-raced for Stanford University, where he earned a business degree, and then taught skiing at Sun Valley in Idaho, reportedly the first non-European to do so. In the U.S., skiing was then a tiny, marginal exotic; it was mainstreamed and Americanized only after World War II.
Pitch briefly operated a ski club's rope tow near Santa Fe, New Mexico—"Being brash and foolish, I said, 'Oh, I know how to splice ropes. I can run it.' " He fibbed about splicing but figured it out and found his professional path. "I learned a lot of the ins and outs of the ski business right then," says Pitch. "I had to do everything myself."
Radical self-reliance—running/fixing/building everything you possibly can—remains a Pitcher First Principle.
Why all the backstory? Well, Pitch thinks we should know it. And, though the Mears fortune vanished, there is a legacy. Pitch become one of skiing's pathfinders.
Pitch, who had learned to fly before World War II, trained fliers in the Army Air Corps. After the war, he taught skiing in Aspen, Colorado, where he also ranched and had a small ski shop. All members of his family—his wife, Jane, and six kids born over a spread of 17 years—helped out as soon as they could. Pitch and Jane's daughter Noël recalls, fondly, doing chores at age 6 and lessons learned from her father: "He taught all of us frugality and just how much you can do without a whole lot."
Moneymen harnessed Pitch's blended expertise—skiing and business—by hiring him to scout mountains that were right for building profitable ski areas. He pointed a developer toward the peaks near Aspen that became the giant area Snowmass. He also explored and backed a surprising winner, given how far south it was: Sierra Blanca (now Ski Apache), in the White Mountains near Ruidoso, New Mexico. A developer had decided to build there, and Pitch scouted to satisfy himself that he ought to accept a job offer to design and oversee construction of the new area. Pitch said yes, and Sierra Blanca opened in 1961.
Davey Pitcher, his father's successor as head of the family business and at 48 the youngest of his siblings, says all that followed depended on Pitch's eye for mountains with commercial potential: "He understood slope and aspect—it's a hard thing for someone who's not a real mountain person to understand." A successful ski mountain must have three things. One, terrain right for trails to accommodate skiers of all levels, plus off-trail steeps and bowls for new-style adventure snow sports. Two, north-facing slopes to catch and hold more snow. Three, good road access. And a mountain can meet those basic requirements but still not work. It takes both imagination and a special knowledge of skiing to perceive how a wild mountain might be cleared and graded to create a successful area. Davey likens the process to an artist seeing a sculpture in raw marble. And he says that the Colorado Rockies, which can look like skiable infinity, are pretty much built out: "If you went out and had a trunkload of money and wanted to build a new ski area, you'd be hard-pressed to find a place to put it."
In 1962, Pitch got his own operation on the same spot, more or less, where he debuted in the ski business circa 1941. He purchased, for an amount so small he can't remember it, Ski Santa Fe, a moribund business with a nonworking lift adapted from mine machinery brought down from Colorado. "I bought Santa Fe on a note, unsecured except by the property, which was junk," says Pitch. Junk as a ski area, but it had good topography and faced north, with access via a newly improved state road. Basically, the owners of the Santa Fe area had given up on it, and Pitch's effort could do as much as the cash and lines of credit he didn't have. "He did all the work, or an awful lot of it," says Davey. "He would run the bulldozer, he'd run the lift, he'd figure out how to haul the equipment up, to build the lift. He didn't rely on financing and hiring specialists." He did, however, rely on his wife and children, the oldest of whom were out of high school when he bought Ski Santa Fe. "There was no money, so if you have six kids, there's your labor force," says Noël, who began work at the Santa Fe area as a teen and later ran support businesses at the base of the lifts—rental, restaurants, children's program, and so on—at Wolf Creek, where she ended a 30-year career in her family's business.
Pitch sold his first area a quarter-century ago, but he and Jane still live in Santa Fe, in the same lovely old adobe in which they raised their youngest children. It's here that Pitch tells me his story. He shows off a daily receipts report from Wolf Creek that includes the day's count of skiers, sales from ski operations, and sales from support businesses. "I've been running this for 40 years," he says. "I invented it way back at the start of Santa Fe." According to Pitch, daily point-of-sale bookkeeping was unusual in the 1960s, when the ski business had yet to become businesslike. These days, the system also keeps the Pitchers from Millennial foolishness: "It starts with these sharp-pencils boys thinking about market share. Market share—not money share but market share." Pitch sneers out the last two words.
Money share management, as the Pitchers lay it out, means gradual, cautious, organic expansion based on broadening the existing clientele. "It's not, 'Build it, they will come,' " says Davey. "It's all about servicing the needs of the existing business clientele that you have, trying to visualize the things you can do in the future that will expand that visitorship, with an eye toward having it be financially doable."
However cautious, the Pitchers are in a risky business. The dollars they make must first fall from the sky. No snow, no money. In New Mexico, the Pitchers sometimes came up short on both. "We had periods in Santa Fe, dry spells, particularly in November and December," Pitch says.
Wanting no-snow insurance, he looked northward at a failed, hell-and-gone, but fabulously snowy little ski area in Colorado, 160 miles from Santa Fe. For years, says Pitch, "Wolf Creek was chugging along in the most primitive way...It was in constant default, because you couldn't charge enough. You couldn't deal with the heavy snow and so forth." In 1975, the owner tried to sell to Pitch, who declined but agreed to join the board. Pitch also asked his firstborn, Todd, to take a position at Wolf Creek. Thus father and son test-drove the area. "Needless to say, it had some problems," observes Todd, now 65 and decelerating toward retirement. Lifts and buildings were sketchy. The area had been open only on weekends, and the owner had no clue how to broaden the market and make weeklong operations pay. On the upside, Wolf Creek got average annual snowfall of about 465 inches, making it the snowiest ski area in Colorado. It also had highway access, though it was a lonely highway, particularly back then. Pitch looked and weighed—"I saw all the problems and the solutions, and he [the owner] said, 'Why don't you just buy it?' "
In 1978, Pitch and his clan had new junk in Colorado.
Even knowing who he is, his official position and his accomplishments at Wolf Creek, it causes perceptual strain to look at Davey Pitcher and see the CEO of an $11 million family business. Davey comes across as this tool-swingin', bulldozer-drivin' fixer and builder who makes all the big crunchy stuff happen for somebody in the corner office. But then, when he needs to, Davey taps into a white-collar self and communicates in business-speak.
Davey walks into his office in a building near the base of the lifts at Wolf Creek, wearing his morning's work in the form of a big, throbbing-blue blot of paint on his work pants. He has been painting bathroom doors.
Today's painting saves money, probably $500 or $600 versus paying a contractor. It probably will save on redos, too, because Davey does it better. "The last professional who did it, the paint failed in a matter of months. If you pay someone, you expect them to take steps to do it correctly," Davey says, freshly aggrieved even though he paid for the bad paint job four years ago.
Behind his desk, the john-door painter becomes Executive Davey. He begins a long phone meeting with an insurance agent, going point by point through the complete coverage package and costs—about $500,000 for buildings, equipment, liability, workers' comp, and all. He speaks in clear, flattish, accent-neutral tones, while his reddish, weather-worn face sparks off intensity. There's a pretty good resemblance to Christopher Lloyd's Doc Brown character in Back to the Future prime.
It's still a few weeks ahead of the first snow. Wolf Creek's base buildings, lift machinery, and trails poodle-cut into a forested mountain have the raw and derelict look of all ski areas off-season. By Colorado standards, this is a modest operation. Vertical relief, from the top of the highest lift to lowermost skiing, is about 1,600 feet, more of a Catskill-size drop than alpine West, where major areas have verticals in the 3,000s and up. On a big day during either of the seasonal peaks—Christmastime and spring break—Wolf Creek sometimes entertains upward of 6,000 skiers and snowboarders, but most days many fewer. Last season's skier days totaled about 198,000, some 10 percent less than the record 223,000 skier days in the 2006–07 season. By comparison, Colorado's mighty Breckenridge Resort once reported 1.63 million skier days in a single season.
But of course, Breckenridge and other household-name mountain resorts in the state—Vail, Aspen, Steamboat—are situated and set up to pull in mobs of skiers. You earn your Wolf Creek, pilgrim. This hits home on the drive up from Santa Fe, culminating in a climb to the Continental Divide on U.S. Route 160. Trucker bard C.W. McCall versified about coming down this same road in a 1975 talkin'-country number called "Wolf Creek Pass": "It just wasn't real purdy/ It was hairpin county and switchback city." In truth, doing the pass on dry pavement is real purdy but also devoid of roadside commercial offerings. Up on the pass, you are where God lost his shoes. And there sits Wolf Creek Ski Area, base elevation 10,300 feet above sea level.
The nearest hotel rooms are about 18 miles to the east. You drive 25 miles westward and drop 3,000 feet to get to the closest town worthy of the name, Pagosa Springs, population 1,815. You commute to ski, and you don't get exciting resort experiences.
There is only one reason such a bare-bones recreational outpost can survive, much less prosper: snow. Wolf Creek can have skiable snow weeks earlier than big-name areas to the north, and it is some of the best snow in North America. Conditions favor deep falls of powder snow. Relatively light crowds up the odds of finding untracked powder, the burgundy truffle of snow sport.
But snow isn't the whole story. The Pitchers know just what to do—and not do—with Wolf Creek. The mission, per Pitch: "Selling ski tickets...That's where the money comes from." More than 80 percent of last year's receipts came from skiing. All sub-businesses—restaurants, shops, bar—are not run as profit centers but, as Pitch says, as "amenities to the public."
Kent Sharp, a principal of SE Group (the SE stands for snow engineering), which works closely with Davey as a consultant on new projects and preparation of required government documentation, says this attitude sets his client apart. Sharp once was amazed by what Davey said about the great but cheap food (green chili stew $5.25, cheeseburger $6) at Wolf Creek. "First thing out of his mouth about the food and beverage operation is, 'We're not really doing it to make money. Our guests are hungry, and we need to find them something good to eat.'...Davey does it differently than anybody else." The difference goes straight to the bottom line. "You could do everything in the world to squeeze more money out of food," Davey says, "and you'd probably alienate a certain amount of customers and then lose the ticket revenue. We're not in the hamburger-selling business."
Given that more than 90 percent of ticket sales comes, if the snow gods smile, in a five-and-a-half-month season, with the Christmas holidays and spring break accounting for half of the total, pure skiing seems like a slender thread on which to hang a business. And Wolf Creek is relatively cheap. A one-day adult lift ticket retails for $52, weekday or weekend, about $30 down from a Rocky Mountain average of $81.69 for weekend tickets at big areas, as reported in the industry's benchmark Kottke National End of Season Survey 2009/10. The spread, however, shrinks in a comparison of yields, i.e., how much skiers really pay for lift tickets. Aggressive discounting knocks the big areas' yield down to about $39, less than half price. Davey, quickly figuring Wolf Creek's yield in his head, gives me a number in the low $30s. Wolf Creek asks skiers for less and keeps more.
Looking at the 2009–10 season's revenue, which came to just more than $11 million, Davey does more number crunching and comes up with another figure. He begins speaking mournfully about what a marginal business this is. The mood goes with the time of year, six months since last ski season ended—"No money comin' in. But money going out!" Then, having led me through some of the heavy expenditures—payroll ($4 million plus), maintenance ($2 million-ish), the half a million for insurance, $200,000 or so to lease the area's land from the U.S. Forest Service—he figures what is left, to be divided among the seven shareholders in the family-held corporation that owns Wolf Creek. "Ummm, so let me just run a number here for a minute," Davey says, then comes back seeming pleasantly surprised. "It's actually a bit more than 20 percent for this last season."
Not a bad margin for a niche business in serious boondocks that depends on people coming many miles in the wintertime to put boards on their feet and have fun. Davey declines to make broader, comparative claims about Wolf Creek's performance. "I don't know what the industry standard is," he says. "I've only got one business."
Davey, the first post-Pitch CEO of the family business, was not an obvious heir apparent. For a while, he jokes, the family must have wondered if he would survive young manhood. He got a GED, because spotty attendance disqualified him from a normal high school diploma. He worked in building trades and seasonally at Ski Santa Fe and Wolf Creek, and he amassed expertise matching the demands of the ski area, which combines elements of building and road construction, stationary machinery operation, hospitality, restaurant management, and especially—because the business is so labor intensive and dependent on weather—farming. Davey and his wife, Rosanne, now the company's marketing director, came on board permanently at Wolf Creek in 1984.
Davey says a love of skiing motivates the entire family, but he is obviously crazy about the hardhat stuff and all the big things that go with it. On a long drive across Colorado, he suddenly slows to eye a road grader on an auction lot, which also has storage units and a couple of tractors. "Mmmmm," he says. "I'm not saying I'd go back and bid on any of those, but it's always good to look." His brothers share his thing for heavy equipment, and the pleasure seems a little bit guilty. All three have bought big machines and tried to hide them from their spouses. Todd once bought an enormous front-end loader and tried to hide it in plain sight, moving it around Pagosa Springs in hopes that his wife, Jann, wouldn't notice. Davey did much the same with a used snowmaking machine that he bought and spirited from place to place around the area last ski season. "It was a twin of one that we had," he says, "And then nobody knows whether it's a new one or the same machine...It took everybody close to six months to figure out there were two of them."
But the Pitchers also wring maximal work and value out of their great big toys. "We probably purchase one new piece of equipment a decade," Davey says. Everything else comes used, to be maintained and fixed in-house. Davey, who has a particular liking for snowcats, says Wolf Creek has machines older than he is. He babies the most recent unit, a 2003 model, so it still looks new.
The Pitchers don't own their mountain. In the West, practically all the slopes on which ski areas operate are public land leased to operators. Very often, though, the mountains rise from private land held by skiing companies heavily invested in resort real estate—development, sales to developers, condos, hotels, commercial ski villages, and every other way to cash in on property in paradise. The real estate crash brought highly publicized debt crises at major winter resort companies. But even in the gravy days, when players raked in money, real estate changed the business in ways Davey did not like. "It's bed-based," he says. "They're no longer in the skiing business." With beds to fill with guests/renters/buyers, skiing isn't enough, because winter isn't enough. But skiing is all the Pitchers want.
Lately, it's what the public wants, too. The Kottke survey showed last season's skier visits to be up nationwide, to 59.8 million, a 4.2 percent annual increase in spite of the hard times and a so-so snow year. Skiing, as skiing, isn't such a bad business to be in, a point proved by Wolf Creek.
That doesn't mean the Pitchers have never been tempted by the notion of beds at their place. Twenty-five years ago, Pitch got into a business relationship with the Texas billionaire Red McCombs, who acquired land neighboring Wolf Creek Ski Area with an eye toward development. The project lay dormant for 13 years, but then McCombs's development venture moved toward building a 2,000-unit resort on its property. The Pitchers wanted no part of a scheme on that scale, and Davey spent many years and some $4 million in legal fees to bring clarity to the situation. It pains both father and son to tell the story. Pitch ruefully explains what originally beguiled him: "A lot of people say, 'Gee, if you just had accommodations up here...' " And he has words of caution about getting out of your financial league: "A billionaire is a very difficult fellow to deal with." Colorado's high, wild country, however, and regulations governing development on it, might be more difficult. The plans have been scaled back, and nothing has been built.
The son surpasses his father, does things the father would not do because he lived and worked in a different world. Davey says the high-priced lawyering and maneuvering against the McCombs enterprise, in which he took the point, was not his father's style. Men of the previous generation did deals on napkins, handshakes. They worked things out between themselves.
Davey's long and expensive preparation to expand Wolf Creek is more new-gen ski business that would not appeal. In Pitch's day, you just talked to a Fed or two to get approval to expand your area and make changes. Davey has hired SE Group to consult on plans and prepare preliminary documents to present to the U.S. Forest Service. Davey can imagine Pitch saying, "Holy moly, you're paying these guys what?" and calling the back-and-forth with a consultant to put ink on paper "gobbledygook." But, Davey says, Pitch also understands the necessity, because things are no longer straightforward and simple.
The working draft of the 2010 Master Plan for Wolf Creek prepared by SE Group runs a hundred pages, and it isn't a plan so much as it is a template for planning. Actual improvements and expansions will require separate applications and review that probably will take years. All told, Davey expects to pay consultants at least $250,000 to prepare paperwork to apply to make improvements who knows how many years from now. Among other things, he is thinking of a new lift in superb snowy high country.
More untracked powder for Wolf Creek.
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