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The Wealthy Buy Up the West

I spent a couple of days this week wandering about the cranes – construction types, not winged ones – in Vail, which is undergoing a series of redevelopment projects that will total a couple of billion dollars when all finished. Among the projects going in is a mini-development of 13 chalets at the base of the mountain, each of which cost an average of $14 million – and all of which sold overnight, sight unseen.

Also coming soon to Vail, which already has a reputation as a playground for the super-rich, is a Ritz-Carlton styled after the grand residences of Europe. You and I won’t be able to stay in this Ritz – it’s all condos, each of which is priced in the multi-millions.

It must be said that Vail officials are doing their best to create some kind of socioeconomic diversity in “the new Vail,” including a recently passed city ordinance that requires developers to set aside on-site “affordable housing” in new projects for half of the anticipated employees of new hotels or condominium buildings. How affordable those units will actually be, and how many developers will be able to squeeze out of the requirement, remains to be seen.

Meanwhile West Vail, once home of a Wendy’s and still a relatively middle-class place, is slated for a massive redevelopment of its own – one that’s also intended for affordable housing but will almost certainly become the province of the well-off as opposed to the mega-wealthy.

I thought of Vail again this morning while reading “This Land Is Their Land,” by Barbara Ehrenreich, an article from the current issue of The Nation. As you might expect from Ehrenreich, and The Nation, it’s a predictably leftie lament a the rich buying up all the majestic scenery of the West (Telluride and Jackson Hole, specifically).

The “general rule” taking over in the most desirable places in the Mountain West, she writes, is “if a place is truly beautiful, you can’t afford to be there.” Noting the traffic jams out of Telluride on Friday afternoons, she also notes that the plutocrats themselves are suffering from the labor flight taking place as workers in these paradises can no longer afford to live less than an hour away.

This phenomenon is most pronounced in southwest Montana, home of the Yellowstone Club, a luxe retreat for billionaires founded by timber baron Tim Blixseth. Here, in the world’s only fully private ski-and-golf resort, the picture gets a bit clouded, though: Blixseth is in the midst of an alleged financial meltdown, a members’ revolt (apparently the values on their multi-million dollar second homes are not holding up as anticipated in the real-estate crunch), and a nasty divorce, all of which threaten to exile him from his self-created rich man’s heaven.

Not being a socialist – after all, I’m technically a member of the landowning classes myself – I have mixed feelings about all this. We stayed over Christmas at my brother-in-law’s villa at Deer Valley, and while sitting in his in-house sauna after a day of perfect skiing, I have to admit I gave little thought to the peasants who would never get to ski there. But at some point there’s got to be a limit, as the troubles at the Yellowstone Club illustrate. Once rich people drive all the artists and writers and musicians out of Jackson Hole, and Telluride, and Sun Valley, they’ll probably notice the lack.

Or, as a local in Vail said more pragmatically to me this week, “Where the hell do you buy a pair of socks in this town?”

About Richard Martin

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  1. Vail is what a group of people did AFTER making a zillion dollars buying up defaulted subdivisions financed by savings and loans, who were defaulted on, and sold by the Resolution Trust Corporation during the Reagan Administration to get some return on all the FSLIC claims. The story I heard was they bought an 1800 lot, dried up golf course, Texas subdivision for less than a million bucks and ended up just short of a billion in sales before it was over and done. That money bought the Vail Corp., and they have never had to take their foot off the gas since.

    Now that we have similar conditions, you just have to time it right, have a pile of cash and a bunch of good credit, and you, too, can create another Vail. Call Credit Suisse…at some point in time, they are going to be ready to deal. They have a dandy in Tamarack, another in Utah, and of a goodly piece of Timmy’s deal in the Yellowstone Club. A guy once told me it was the third owner who made all the money in a subdivision development. There will be lots of opportunity in the near future. But try to be number three if at all possible.

  2. I’m technically a member of the landowning class as well–wait, I’m working to pay off a mortgage-does that make me an “owner?” Comparing myself to these folks would be like comparing a convenience store owner to Donald Trump. What I want to know is, how do you get on the receiving-money end of the next Savings-and-loan scandal or housing bubble? I can’t afford to be third. I can’t afford to be tenth.

    Long ago, I bused tables at Deer Valley for a season pass. The skiing isn’t as good as it is on the flip side of the Wasatch Range (Alta, Brighton, Snowbird–yes!) but there are plenty of runs, and I suppose they can afford to make as much snow as they want if they run out of the real stuff. The great joy was in watching the rich and famous biff it on the bunny hills, and catching a glimpse of Stein Erikson flying down a slope like you or I might walk down a street.

  3. Surely you’d have to argue that the wealthy have always bought up the west, whether or not you’re talking about the government, private enterprise or wealthy individuals. Perhaps in the past, they bought larger chunks of land and maybe they didn’t subdivide it in quite the same way that you’re describing in this article. But you can’t say that the western segment of this country, unlike the rest of it, was developed and owned by more humble folk. Individual home owners have always come last in the realty pecking order.