The good people of Colorado live in fear of a beast called the Ugly Texan. Oil-rich Texans, they say in Colorado, are buying up the mountains, stealing the snow, taking the profits from Black Gold and laying claim to Colorado’s White Gold.
But it really isn’t true. The Colorado-Texas antagonism is more social than it is economic; it has more to do with xenophobia than with real estate. True, Colorado is a Texas playground and Texans enjoy it in droves. And true, many Texans, enamored of the Rockies, have built vacation homes, bought condominiums, invested in real estate. But on a relatively small scale; investors from New York, Illinois, and California own larger slices of the Colorado pie. The Texas Takeover is really mythology, but it’s an established part of Colorado lore.
If this myth is ever to become a reality, it will be largely because of the Bass family of Dallas. If Texans ever do own the Rockies, it will be because the Basses have already staked a big claim. It’s called Vail. And they won’t stop there.
Harry W. Bass Sr. never gave a damn about the Rockies and their snow. He was an oilman. In the Twenties, as a bookkeeper for an oil drilling company in Enid, Oklahoma, Harry Bass Sr. fast-talked his way into a position as stockholder when his boss decided to incorporate. When he died in 1970, he left behind a fortune earned in the Goliad Corporation and the Goliad Oil and Gas Corporation. Much of that fortune flowed into trust funds established for his two sons, Dick Bass and Harry Bass Jr.
If a suspicious Coloradan were snooping around Dallas for evidence in support of the Texas Takeover, he’d do well to stop by the offices of H. W. Bass and Sons in the Mercantile Dallas building. There he’d find the Bass brothers. Dick is gregarious, adventurous, and handsome; a graduate of Yale, he’s now 49 but doesn’t look it-not a speck of gray in his dark brown hair. Harry Jr., on the other hand, is reserved, almost courtly; his education came through work in the family business, not college; at 51, his hair is totally gray.
The Bass brothers are the despair of the Dallas business press-their companies are privately owned, their executives tight-lipped and hard to reach. Harry Bass prefers to keep his family’s business dealings out of the public eye. Given the apparent size of the family’s holdings, he’s been successful. Even people who’ve had substantial dealings with the family don’t always know exactly what they’re dealing with. Says one long-time associate, “I don’t know how much they’re worth, and I don’t know how to find out.”
Until recently, Harry Junior had done little with Harry Senior’s money except to maintain and tend it. His independent ventures have been modest. He started a corporation that deals in U.S. coins and currency, a subject dear to his heart (he is president of the American Numismatic Society); in the late Fifties and Sixties, he held key positions with the Republican Party, including a stint as finance chairman for Dallas County, which he mixed with an independent business that compiled a computerized data bank on voters, a financially unsuccessful venture. Known as a numbers man with a low profile, Harry Bass Jr. seemed unlikely ever to take the big risks or reap the big rewards that his father did. Until skiing.
Skiing is the single flashy thread running through the past 20 years of Harry Bass’s life. Brother Dick, as a Yalie, had been smitten by skiing in Vermont and introduced Harry to the slopes in Aspen in 1953. It was hardly love at first sight. “I skied in ’53 and hated it,” says Harry. “Skied again in ’54 and hated it. It was excruciating.” It was two years before Harry took any pleasure in the sport, and even today, he has remarkably little to say about it.
The sport hasn’t always been kind to his family. In 1967, his 14-year-old son had a skiing accident that resulted in the amputation of a leg. It was seven or eight years before the family skied again.
But Harry and Dick saw more than sport in the snow of the Rockies. As early as 1955, both had made relatively small investments in the Aspen Ski Corporation, founded by Walter Paepcke, chairman of the board of Chicago’s Container Corporation of America. Paepcke transformed the sleepy silver-mining town into a world-class ski resort. At one time, the Basses owned about seven percent of the Aspen Ski Corporation stock. But when a large chunk of money from the Basses’ Goliad Corporation was freed for major investments, the brothers turned their eyes to other mountains.
Dick looked west, across the state line into Utah, and became heavily involved in the Snowbird resort outside Salt Lake City. As majority owner, he has sunk $30 million into Snowbird to date without showing a profit, but this year he expects to turn the corner. “I was hyper-adventurous, looking back on it. I wanted to build something big, new, on my own. Harry would never do that. We’re comA ROCKY MOUNTAIN BUY: Harry Bass, majority stockholder in Vail Associates, stands high over Vail with Associates president Jack Marshall (right).
pletely different in temperament.”
The more careful and methodical Harry kept his own money in coins and the like, taking family money to a budding project on a mountain called Vail. Today Harry Bass Jr. is chairman of the board and majority stockholder in Vail Associates Inc., the company that opened Vail Mountain and played godfather to the fledgling town in the early Sixties. Vail Associates currently runs all mountain operations at the resort – ski lifts, restaurants, ski school and patrol – making it the hub of the wheel at one of the world’s major ski destinations. At the end of 1978, Harry Bass had about 57 percent of Vail Associates stock under control, and a tender offer pending that would, if accepted, have given him 80 percent control.
In taste and temperament, Harry Bass may seem out of place in the flashy surroundings of Vail; but financially, he’s in deep and trying to go deeper. When asked why, he answers with reasons that are sound, if predictably dry: “I’ve been raised in the oil business and am quite familiar with the fact that oil and gas reserves are depleting assets – eventually the fields will go dry. But a ski mountain, given no great changes in the climatic system, is non-depreciating.” Sound, but perhaps not the whole story. Says a friend of Bass, when asked why Harry wants full control of Vail Associates, “I think Harry’d like to be able to say he owned a whole mountain.”
Vail was the brainchild of Peter Seibert of Colorado. Like Walter Paepcke, Seibert skied with the Tenth Mountain Division in the Colorado Rockies during World War II – getting an advance look at the potential for a sport that had as yet barely gotten off the ground. In 1960, a hopeful Seibert approached the Basses and John Murchison with a plaster-of-Paris model of his dream resort, in an at tempt to secure backing. Bass says, simply, “We both declined.” Seibert eventually found his initial backing in a group of Denver investment bankers. In the continuing hope of getting names like Bass and Murchison involved in Vail, at least in a small way, Seibert offered modest “partnership units” in the project at $10,000 each, which gave the buyer a rapid write-off, four lifetime ski passes, and the right to participate in drawings for choice homesites. The only condition: Homes must be built in a short time; if not, the buyer lost the lot. Seibert was trying to build a community, not encourage land speculation.
“Not 10 percent of the money that was raised for Vail came out of Texas,” Harry Bass says. “I would say it was Colorado, about 40 percent; Chicago, a great amount; then New York, Connecticut, places back east.” Throughout its first 15 years of operation, in fact, Vail Associates was a company of numerous investors with relatively small blocks of stock. According to Bob Parker, who started as marketing and public relations director with Vail in 1962 after six years as editor of Skiing magazine, “The Dallas influence was in the form of individuals’ clout and their show of belief in Vail at a time when a lot of people were not at all sold on the idea that Colorado needed another major ski resort.” Prime example: John Murchison. Though he declined to make a major investment, Murchison served on Vail’s board of directors at the time when his name did the most good; he also built one of Vail’s earliest homes, an impressive structure designed by Dallas’s Bud Oglesby, which has been featured in Sports Illustrated, Town and Country, and Vogue. Prime example two: Dick Bass, whose home became Gerald Ford’s “winter White House” after his accession to the presidency in 1974. “You can imagine how many news stories, national and international, ran with Vail as the dateline,” Dick says. “We never could have bought that kind of publicity.”
Today, the names of prominent Dallas residents with a stake in Vail include not only Murchison and Dick Bass, but Herbert Hunt, Clint Josey, Bill Clements, Clint Murchison, and Al and Margaret Hill. Harry Bass was not the last to come in, but he was hardly the first. “I’m not much of a visionary. Just as I didn’t invest in Aspen till I saw it in three dimensions, I didn’t invest in Vail until I saw it at least in skeletal form, operating for a couple of years.” Bass limited his early investment in Vail to five partnership units in the third round, when land was no longer involved; in 1967, he bought a modest home.
In 1976, however, Harry Bass made his move. Via Goliad Oil and Gas Corp., which the family had retained, he made a tender offer for 400,000 shares of Vail Associates stock, at $12 a share; 20th Century Fox countered with a bid of $13.50. The Basses raised their bid to $14, at which point Fox backed off. (A year or so later, however, when Fox was giddy with the income from Star Wars, it bought out Aspen Ski Corporation for $48 million.) Bass’s offer was so attractive that fully 90 percent of shares were tendered; Bass took 400,000 of them, making his ownership about 57 percent.
It looked like a bad investment. In March of ’76, an accident on the Lions-head gondola resulted in four deaths and injuries to eight; 11 lawsuits were eventually filed against Vail Associates, at a cost to the company of $1.4 million in expenses, with four suits still outstanding. Further, the snowfall during the 1976-77 season was the lowest since the beginning of the decade. At the end of 1977, bids for Vail Associates’ stock had fallen as low as $6.50 per share, giving Harry Bass paper losses of about $3 million.
Only on paper, however, for Harry Bass is in Vail to stay. Looking back on his move to get the majority of outstanding stock, Bass says, “If we had known we were going to sell our main gasoline plant operation up in Canada, and known we were going to have an additional $10 million or so, we probably would have taken more than the 400,000 shares – perhaps all that was tendered.” His more recent tender offer for an additional 275,000 shares was simply an attempt to get now what he didn’t know he could have had then: “perpetual control of the board of directors and the management of the company.” He didn’t get it. Goliad picked up 83,000 shares, increasing its ownership to about 65 percent. But one local observer thinks it’s just a matter of time before Vail Associates is in Harry Bass’s pocket: “I don’t know much about high finance and power struggles, but it seems to me, he already has it. The rest is a formality.” Harry Bass almost owns his mountain.
Vail is an odd-looking town, built of white plaster, old wood imported from here and there (“We dismantled every barn in the county to build this place,” says the mayor), and new wood tortured to make it look old. The ersatz-Alpine village strikes many visitors as sterile, vaguely troublesome; but the really troublesome aspect of Vail takes a while to sneak up on you. It starts when you realize that with few exceptions, there aren’t any interesting people in town to look at – everyone is healthy, well-to-do, in the prime of life, dressed in colorful nylon ski gear. When you ask for an analysis of the town’s problems, the man behind the drugstore checkout counter gives the same answer (parking and cheap housing) as the mayor, and the newspaper writers, and everyone else. Vail calls itself a “resort town,” but it might as well leave off the “town.” Everyone is there to ski or make money off the skiers – there is no diversity, no conflict. And not even the tourists have a bad name.
Mayor Rod Slifer appreciates this. A boyish Coloradan in his mid-forties, Slifer came to Vail in 1962 from Aspen, worked as a ski instructor in the winter and sold real estate in the summer, and ended up owning the biggest real estate agency in town. What it means to be mayor of Vail is not entirely clear. “Vail is strongly Republican,” says Slifer, “but as far as the town goes, there are no politics. Many people live here because they wanted to get away from that sort of thing. Oh, they get involved to a degree in our local issues, but only when it affects them in the pocketbook. Caucuses and stuff – well, we just don’t do that kind of thing.”
Vail Associates has a lot to do with that. “When we first started, Vail Associates was the godfather,” Slifer says. “They did the street maintenance, hired a cop, did all the snow-plowing, everything the town does now. At that time we didn’t have enough people to qualify to be a town. Even when we incorporated, Vail Associates picked up almost all the expenses that first year. Hell, Vail Associates was the town.”
That’s no longer true, but the company is in a key position: It has a monopoly on the slopes, the single local resource that affects everybody, and it is Vail’s largest employer. The small investor is a vanishing breed – to the disappointment of many in the valley around Vail.
“It was a new era when Harry was successful in his first tender offer,” says Rod Slifer. “He was in the driver’s seat, and is today. I think there is some animosity and some disappointment that Vail didn’t always remain a diversified company. See, there’ll never be another Vail. The numbers have changed too much.
“The initial capital raised for Vail was only a million dollars, and that built the core of the village, a gondola, two chair-lifts, and a beginners’ lift in 1962. But you can’t have a bunch of little people doing a ski resort any more. It has to be someone with a lot of financial capability. And that’s why Goliad is the sort of people you’re going to find in the ski business.
“But remember, the people that were bidding at the same time as Goliad were from 20th Century Fox. It was a contest, and most people around here felt they’d rather have Harry Bass. He’s got more feeling for Vail, and wants to make it right.
“And I think we all knew that at some point, when Vail became successful beyond our wildest dreams, somebody was going to take over. That was just bound to happen. It was a public company, and somebody was going to take it over.”
Harry Bass might take exception to Slifer’s figures, but not to his reasoning: Big money wins in Colorado skiing these days.
And Harry Bass and Goliad Corporation aren’t through in Colorado. Vail is not going to make Harry Bass a vastly richer man – it’s simply not a huge moneymaker. But Beaver Creek might be.
Eight miles up the road west of Vail proper is Beaver Creek, a new ski community under development. The developer? Harry Bass and Vail Associates.
Harry Bass has studied the development of Aspen and Vail and intends to make Beaver Creek more profitable than either resort has been. “In Aspen, they had nothing but the mountain to work with. They owned no real estate to speak of. Paepcke made no real aggressive attempt to tie the town up as he could have, and with hindsight, should have. A lot of money has been made on the real estate side.
“Vail Associates owned most of the real estate at the base of the mountain, but it had to sell off its real estate for capital to expand the mountain. So by and large, Vail Associates owns little real estate in Vail Village.
“Beaver Creek offers an opportunity for Vail Associates not only to develop a mountain and sell off homesites and condominium sites, as in Vail, but also to retain ownership of a large percentage of the commercial core. That’s the land that will generate perpetual income – and that’s the challenge that Vail Associates has for itself right now.” Ten million has been sunk into Beaver Creek to date; in the meantime, Vail Associates is paying no dividends, and has no plans to. The goal is to expand, to get the assets up, for Harry Bass and his heirs.
Bass is pleased with his choice. “Dickand 1 have sufficient means for ourselves,so our interests are best spent in buildingsomething that our heirs can be the beneficiaries of. Vail isn’t immensely profitable, but it has continuity. If I wanted tomake a lot of money, I’d probably entertain the idea of selling our holdings in VailAssociates, but once you sell it, what doyou do with the profit? You can’t let it liefallow, so you’re in the same cycle again.There are risks involved in any investment. I’d just as soon get into somethingthat’s not going to wear out, that weknow fairly well, and stick with it.” Andbe king of the mountain.