Idaho's Tamarack Resort Shuts Down

Perhaps it should have been a sign when tennis greats-turned-investors Andre Agassi and Steffi Graf bailed from the Tamarack Resort's luxury hotel project. Or perhaps that the resort, owned by Jean Pierre Boespflug, relied on real estate sales of 2,100 chalets and condos to finance itself -- unfortunately right at the housing bust. Only 250 were completed.

The all-year ski and recreation resort has been in receivership since Oct. 20, when Credit Suisse Group took over the project and Douglas Wilson Co. was appointed by a judge to manage its finances. The resort opened in late 2004, but with owners going through a $250 million construction loan and already owing another $20 million -- even Bank of America threatened to foreclose on its ski lifts
Credit Suisse and its represented lenders say they are owed $275 million, although they agreed to give $1.7 million for an "orderly closure" they are expected to turn off the lights Wednesday night. More than 200 workers will be laid off.

Although Tamarack's problems were many, including expensive, elaborate developments (think plans for a $5 million 40-boat slip marina after a $2.8 million operating loss,) it also fell victim to the false optimism of the housing boom and subsequent bust.

They weren't alone. Marriott International said they couldn't sell any timeshares at the end of 2008 and Wyndham Worldwide Corp., which has stopped several projects, suffered huge losses due to its reliance on condos and timeshares. Hotel and resorts that entered into the real estate business at the peak of the market now have plenty of time to reflect on their bad timing and subsequent losses.

That the Tamarack's investors hoped to finance spending by real estate sales now seems naive -- but at the time -- with easy credit, abundant loans and rocketing real estate prices, it probably seemed like a brilliant idea. What a difference a few years can make.

Photo courtesy of the Tamarack Resort