Les Otten to make stand with old Balsams Hotel
He was king of N.E. snow sports until his empire went bust. Now he is making his comeback
DIXVILLE NOTCH, N.H. — New Hampshire’s Coos County is the coldest, snowiest, and poorest in the state. It’s also where Les Otten, the brash ski resort mogul and former minority partner of the Red Sox, is planning his comeback.
The focus of Otten’s latest dream is the old Balsams Hotel here and the mountains around it. The once-grand resort is listed on the National Register of Historic Places, but it closed four years ago and now resembles a vast, dilapidated dollhouse. Windowpanes are missing. Weathered wallpaper is peeling. There are rumors among locals that spirits haunt the hotel’s hallways that once bustled with guests, many of whom came back year after year.
Otten isn’t fazed by how much needs to be done. One recent afternoon, he parked his Jeep on a snowy hillside alongside the hotel and talked confidently about how he plans to transform the landscape. “The gondola goes in here and goes up over the ridgeline,” he says. The ATV and mountain bike rentals will be behind the hotel, and just beyond that will be the Nordic hot springs. “You can wake up and do almost anything you want to do.”
It’s been 150 years since The Balsams Hotel first opened in this tiny New Hampshire town a four-hour drive from Boston and best known for its “first in the nation” midnight voting ritual in presidential elections. In its heyday, the 400-room hotel was a summer playground with a championship golf course, sumptuous dining, and two servants for every guest. A small swath of ski runs was later added to make it a year-round resort.
Otten’s ambitious and controversial plan would create the largest ski area in the Northeast, expanding the real estate footprint to eventually accommodate a staggering 7,600 guests. With a marathon approval process now mostly complete, Otten says he’ll break ground this summer, and have trails open for the 2017-2018 season. Many are skeptical, and there are still obstacles ahead. But if the developer has his way The Balsams will soon be back on the map.
And so will he.
A fortune lost
If you’ve hopped on a chairlift in New England in the past three decades, you’ve likely visited a resort in Les Otten’s orbit. Now 66 and silver-haired, he was just 31 when he bought Maine’s Sunday River ski area in 1980 and built it into a highly successful operation. By 2000, his American Skiing Co. was the nation’s largest ski resort chain, with a half-dozen areas in New England, including Sugarloaf and Killington, and several mountains out West.
But the company’s stock price began to falter shortly after it went public amid investor concerns that Otten had overextended himself. He was pushed out, and American Skiing was eventually dismantled in 2007.
Otten lost a fortune in the fallout, but quickly pivoted. Along with television producer Tom Werner, he put together a $700 million bid to buy the Boston Red Sox and save Fenway Park, eventually pulling in current Boston Globe principal owner John Henry. Otten, who sold his share of the team and left baseball in 2007, will be the first to mention that theirs was the only bid that would have kept Fenway intact. Larry Lucchino once called him “the visionary” behind the project.
“Saving Fenway Park is probably my single greatest achievement,” Otten said.
He’d been out of the ski industry for 15 years when The Balsams’ latest owners, struggling to maintain the property, approached him.
“I knew I was in trouble when they said, ‘We’ve been told you’re the best possible guy in the world that can take this over,’” Otten recalled as he toured the hotel grounds.
Otten’s success was derived largely from his capacity to stay ahead of the trends — at his peak, he was one of the ski industry’s biggest innovators and savviest marketers. Now, as then, he’s not shy about trumpeting his accomplishments.
The big ideas he has for The Balsams have been hailed as “transformative” by many in Coos County. But the scope of the plan and Otten’s aggressive style are also what make him so polarizing for some.
“I think that people either love Les or they hate Les,” said Rick Kahl, the editor of Ski Area Management magazine. “He’s never shy about expressing his opinions.”
Otten wasn’t immediately sold on a Balsams reboot. He’d made summertime visits to the resort years earlier with his wife and kids, but he didn’t think it had much appeal in the winter, as its ski trails were shady and windy.
The owners, however, were persistent, eventually driving their plans over to Otten’s home in Newry, Maine. For weeks he ignored them, but then, just before tossing them in the trash, he suddenly spotted something: The Balsams’ layout was all wrong, skiing-wise, its trails far too short. But the land just beyond it was completely different — north- and east-facing slopes with 2,000 vertical feet and room for dozens of runs.
From a terrain standpoint, he says, it was “perfect.”
“It was like looking at a lottery ticket and realizing we had all the numbers,” he said.
So Otten took a gamble. In the 2½ years since he’s become a co-owner and developer of the site, he’s worked with architects to map out a vision for a village of hotel rooms, 23 ski lifts, and 14 miles of trails.
He now promises “one of the finest four-season resorts ever constructed,” one that will bring 1,700 jobs to the North Country by 2024. Phase one calls for a $143 million investment in rebuilding the hotel and ski area. Of that, he’s committed $5 million of his own money. At the same time, he has slogged through a complex-permitting maze and has secured a $28 million bond guarantee from the state of New Hampshire.
He’s also been working hard to to stoke the support of the local community, where some question whether his plans are overly ambitious.
“Whenever somebody up here proposes something, they try to show it will create a lot of jobs,” said Jim Dannis, an environmental activist in the region. “I read the economic impact plan. There were parts that were just unbelievable.”
But Arthur “Skip” King, a publicist who worked alongside Otten at American Skiing, said, “He has some of the best people in the industry working with him. If anyone can pull this off it’s him.”
As Otten steered his way through the woods during a recent visit, his golden retriever, Sophie, who had been relegated to the back seat, pushed her head onto the console, and Otten wrapped his arm around her. A lot has changed since he got his start in the ski industry. He is divorced now and his three kids are grown, so he and Sophie spend a lot of time on their own exploring the resort’s grounds.
“When I left the ski industry and went to chase the baseball dream, and then left the baseball dream,” Otten recalls, “I always said in the back of my head that if I had one chance to build something from scratch and do it in a way that I consider to be right, I would be hard-pressed to not want to take that leap.”
Otten, an only child, first fell in love with skiing at age 7, when his family began heading north to the Catskills from their suburban New Jersey home. His father, Albert, escaped Nazi Germany for the United States after being forced, as a Jew, to give up his steel mills to the Nazi regime. Having lost everything in Germany, he rebuilt in the United States, inspiring Otten’s personal motto, “Always Onward,” a nod to his father’s initials.
“Regardless of what defeat life throws you, you’ve got to stand up,” he says.
After graduating from Ithaca College in 1971, Otten enrolled in the ski management program run by the company that owned the Killington and Mount Snow ski areas. When they bought Sunday River in 1972, he was brought on as an assistant manager, and became the resort’s manager eight months later.
In 1980, Otten bought the resort outright for $1.2 million (His father, nervous that his son was taking on too much, offered him $100,000 to walk away from the deal, before eventually helping him out financially).
During Otten’s 20 years as owner, visits to Sunday River shot up from 30,000 annually to a high of 568,000. In 1989 Inc. magazine named him their turnaround entrepreneur of the year.
“Every year he was dropping a couple million into the place and making it better and bigger and more fun,” recalls King, his former publicist. “Then he started buying other ski areas.”
Otten took the company public in 1997. At its height, American Skiing operated nine ski areas.
There were moments, during these high times, when Otten was flying his Cessna between his properties, that the growth seemed unstoppable. And it shaped Otten’s self-perception. Friends said that he modeled himself on Walt Disney — an entertainer for the masses. Detractors say his resorts were often too commercial, given their the idyllic settings — more Disneyland than Switzerland.
Otten had his wings clipped when he started dealing with Wall Street. Revenues were soaring, yet the company wasn’t profitable. Acquisitions had left it deep in debt, so in 1999 Otten turned to an outside investment group for an infusion of cash. The company was already vulnerable when a streak of unseasonably warm winter weather and a faltering real estate market left those investors spooked.
Otten was eventually pushed out as CEO. He stayed on the company’s board, but the stock took a nosedive. In all, Otten says he lost $250 million.
It’s still a sore subject for the developer, and he bristles whenever the topic comes up.
Is American Skiing’s failure something that still haunts him?
“It’s the most poignant question that I’ve been asked in 15 years,” Otten said recently. “It is a ghost that’s following me around, and I don’t know how to exorcise it.”
A reunion tour
The afternoon sun was fading, but Les Otten was still full of vim, making his pitch to a reporter. He stood in a makeshift conference room in one of the hotel’s lodges, a huge topographic map hanging behind him on the wall. Otten acted as orienteer, guiding his finger along proposed trails and the massive bowl that he said would make glade skiers salivate.
Around the table were some of his longtime associates who first helped him build Sunday River. The entire undertaking has a bit of a “getting the band back together” feel, a reunion tour of sorts.
Otten outlined the way he plans to pay for the endeavor, a real estate model that’s a tweak on a timeshare and one he’s dubbed the Century Club. A one-time $100,000 investment, for example, will buy you a club membership that comes with 100 days a year in a designated unit at the hotel, plus access to amenities such as a farm-to-table cooking school and the hot springs he’ll build. When a reserved unit is not in use, the Balsams will be able to rent it out.
So far, he said, about 200 people have signed up, which, pending a state sign-off on the real estate plan, is enough to get the project off the ground.
Otten frequently mentions that it’s been decades since a new ski area has been developed in the Northeast, and there is a reason for that, as this dismal winter shows. Others might not be up for that risk, but Otten, as always, is bullish. “We’re further north and at a higher elevation,” he said of the Balsams, “We’ve already had 65 to 66 inches of snow up here.”
Excitement creeps into his voice whenever he describes both the scope of the project and its impact on the region, creating hundreds of new jobs and millions in state revenues.
“I sound like Donald Trump,” Otten joked. “We have a great plan, a great organization, great people.”
His own political ambitions have been frustrated — he made a run for Maine governor in 2010 but came up short — but he has demonstrated considerable political savvy in maneuvering the project through a byzantine regulatory process to the point that he is almost ready to build. “It’s extraordinarily complicated,” he said, having worked with more than 10 state and federal agencies to secure permits.
“The redevelopment of the Balsams property has been a priority of the state since its closure . . . there is no more pressing issue,” said Jeffrey Rose, commissioner of New Hampshire’s Department of Resources and Economic Development. Rose argues that the development could be a “huge catalyst” for the area’s struggling economy.
That hasn’t kept some locals from questioning the scope of Otten’s plans. Developing a resort in a remote area 200 miles from Boston is apt to change pollution patterns, while introducing the possibility of traffic and infrastructure problems. And there are the ski industry’s inherent risks as the region feels the impact of global climate change — nowhere more obvious this winter than on the snow-starved trails at many ski resorts.
Others in the famously libertarian-leaning state chafe at the $28 million bond guarantee the team was able to secure from the state, and they question whether, given Otten’s uneven investment history, he’s relying too heavily on outside financing for his project — $98 million in borrowed funds versus $45 million in equity.
“One of my concerns is that when you have a community that is pretty desperate for economic growth and development, are they looking as carefully at protecting all of their community interests?” asked Jamie Sayen, an author and North Country Chamber of Commerce member who worries that some will become blinded by “the hope that our economic miracle is at hand.”
Otten, for his part, is trying to keep his detractors at bay and stay focused on his vision. He said The Balsams’ history as a summer resort makes it less dependent economically on fickle ski season weather. He estimates that lift tickets will only account for 20 percent of its planned revenues.
“Nobody has done anything like this,” he said, ever the salesman. “Of course there are going to be critics, saying ‘He’s not going to succeed.’”
And while a lot in Otten’s life has changed, his self-assurance remains intact.
“There are lots of people that have a lot to say about what I’ve done in my life,” he said. “But I can’t find anything where I made a mistake.”