An unlikely Shangri-la

Little room is left for new development at the West's established resort towns, so entrepreneurs are turning second-tier ski hills into private enclaves for the jet set. But will the new resorts fly?

  • A lone skier on the slopes of the former Elk Meadows ski area near Beaver, Utah, now the private Mt. Holly Club.

    Courtesy Mt. Holly Club
  • Steve and Marc Jenson at a strategy meeting last fall.

    Courtesy Mt. Holly Club
  • Trophy Mountain Construction president Scott Hoffman, right, talks about building plans to guests at the Mt. Holly Club this summer.

    Garrett Davis
  • An artist's rendering of Mt. Holly Club, including a Jack Nicklaus golf course (middle left) and ski runs.

    Courtesy Mt. Holly Club
  • Children are reflected in the windows of Main Street in Beaver, Utah

    Garrett Davis
  • Industries like Cache Valley Cheese Factory have been the mainstays of the local economy.

    Garrett Davis
  • Dell Hollinghead's Arshel's diner.

    Garrett Davis
  • Carol McCulley, Julia Moore, and Margaret Wellman, members of BRAVE (Beaver River and Varied Estates), discuss their concerns about the new Mt. Holly Club

    Garrett Davis
  • The old ski lift at the former Elk Meadows ski resort won't be used this year. Instead, Mt. Holly members will use snowcraft to ascend the slopes.

    Garrett Davis
  • Puffer Lake, a public lake that already has been the scene of confrontations over public access.

    Garrett Davis
  • Slopeside condos no longer have access to the ski slopes of the former Elk Meadows ski area. The Mt. Holly Club originally planned to buy out all the condos and make the area part of the club, but quickly backed off after some owners balked.

    Garrett Davis

Page 3

No matter what side people would fall on, everyone agreed on this: Beaver needs help. Business in town hasn't been the same since the interstate highway system routed the cars off Main Street decades ago, bookending it with exits for a McDonald's at one end and a Comfort Inn at the other. Today, the Sleepy Lagoon Motel really means it when it says "Vacancy"; feral cats stalk ducks around its algae-scrimmed lagoon. Across Main Street from the empty Sam's Furniture & Appliance, the movie-house marquee announces that the coming attraction is itself: "The Firmage Theatre -- Coming Soon." "You can't even buy a pair of socks. Dress socks, anyway," barber Hugh Blackburn complained.

Residents are divided over whether the Mt. Holly Club will be their economic savior, though. Farmers in this corner of the nation's second-driest state have watched the value of their water soar nearly 800 percent in the last few years, as demand increases, said Rob Adams, director of the Beaver County Economic Development Corporation. "There are opportunity costs to keeping that water in agriculture," said Adams. "What that means is that farming is going to be a tough proposition as time goes forward." The completed development would eventually generate $30 million annually in taxes for the school district, and more than $13 million to other county coffers, according to a study done by the Mt. Holly Club. And proponents argue that the massive development at the top of the watershed will be a fairly low-impact boon for the county, at least compared to projects like the hog farm, or the open-pit mine that's reopened a few miles west of Milford. (The mining company says it hopes to scratch or leach out 230 million pounds of copper, 719,000 pounds of silver and nearly seven tons of gold in just a few years.) "You couldn't write a better case for economic development," County Administrator Bryan Harris told me.

Several other Beaver County residents that I spoke to -- almost no one wanted to be quoted, saying the small-town backbiting had grown too hurtful -- said the developers had bought the ski area and deserved a shot with their new scheme. Still, they scratched their heads at the wisdom of building a golf course that will be snow-covered most of the year. And they wondered how easy it would be to get people to build multimillion-dollar homes beside a ski area that even its fans call modest. Erik Miller, a real estate agent and mountain property owner, said he wasn't entirely opposed to the club but felt frustrated by how the owners tried to steamroll opposition, and by plans that seem wildly unrealistic. "It's like putting a bunch of luxury boxes around a T-ball field and calling it Yankee Stadium," he said.

Opponents have a laundry list of concerns. They worry about the environmental impacts of so many homes and a golf course at the headwaters of the Beaver River, which irrigates the valley below. People like Dell Hollingshead, a local historian and the second-generation owner of Arshel's, a diner on Main, and his waitress, Linda Downs, said they worry about property taxes rising. They worry about how the newcomers will change the moral and social fabric of this small-town Mormon community.

Keep prodding a few of the most ardent opponents, however, and you realize that their furrowed-brow concerns about stream flows or blocked trails, however earnest, are only accessory affronts to a hotter, more bedrock outrage. For these critics, "Mt. Hollywood," as opponent Margaret Wellman calls the club, represents an assault on a rural way of life by something frivolous and unproductive, decadent even. "To me, who's not a golfer, a golf course is the biggest waste of water in a farming community," said Carol McCulley, president of BRAVE, an opposition group. "You can't eat golf balls." When the Utah State Division of Water Rights allows agricultural water to be transferred up a mountain to homes, "that is a terrible thing for a society to decide," McCulley said.

The Mt. Holly Club doesn't speak much about the sensitive issue of water. "We have plenty of water for what our approvals are right now," Marc Jenson told me, refusing to be more specific. He added that the club had purchased "significant amounts" of water from users down in the valley to augment what it already had. "Water is not one of our issues."

The fact that the club occupies land that locals long enjoyed hiking through and skiing on -- though it never was public land -- doubles the offense to McCulley and others. "It'll be the castle on the hill," she said near the end of our conversation, "and we'll be the serfs down here, and we won't be allowed to cross the moat -- to ski or do nothing."

A vigorous hearts-and-minds strategy by the developers after the initial sour public meeting might have cooled the Us vs. Them antagonism. The developers made some attempt at conciliation. But the next several months were, in the argot of skiing, a public-relations gongshow. Plans for buying and scraping the condos were immediately yanked. There was talk of building a fence or a wall to surround the club -- appropriate for a high-end gated community, condo owners like Miller said -- but the homeowners said they could never get a straight answer about exactly where the barriers would be. And would those homeowners be walled off from the ski slopes? At one point, overzealous security guards tried to run off some men who were legally fishing on Puffer Lake, a popular, public high mountain lake whose surrounding land had been purchased by the Mt. Holly Club.

The advertisements fomented more distrust: A brochure appeared on the Web site of the high-end Robb Report's Vacation Homes magazine, boasting that the club had 2,500 vertical feet of skiing (it has not quite 1,400 vertical feet) and "extreme snowcat skiing -- up to 12,000 feet" (that area is designated as non-motorized and roadless by the Forest Service). The club also has repeatedly run a full-page advertisement in the Wall Street Journal showing a skier schussing before a backdrop of jaw-dropping peaks that definitely aren't the Tushars. (They look suspiciously like the Canadian Rockies.) By spring, an investigator for the U.S. Department of Housing and Urban Development had arrived in Beaver to interview county officials about whether any misleading advertising had led to violations of the federal Interstate Land Sales Full Disclosure Act. (A HUD spokesman declined to comment.)

The atmosphere grew even more poisonous once two opposition groups formed that winter as the developers crafted a development agreement with the county. One January morning, a private investigator named Steve Burdette knocked on the door of BRAVE's McCulley. Burdette said he wanted to talk with her about the Mt. Holly Club, and he asked her whom she was working with, she recalled. "He made an impression on me; he knew where I lived." The investigator also called on others who had problems with the club. A month later, after a Salt Lake Tribune reporter penned a probing, unflattering portrait of Marc Jenson and his background, a private investigator appeared in the reporter's neighborhood, asking about his habits. The reporter, Mike Gorrell, told me he was "reasonably certain" it was the same shamus who had shown up in Beaver.

Steve Jenson said that no one from the Mt. Holly Club hired a private investigator in either instance. But Beaver County Sheriff Cameron Noel told me he telephoned the club's offices after the January visits. Did anyone send a private dick to my county? Noel asked. Yes, the club said. Someone here did.

If the Mt. Holly Club was growing frustrated in trying to put its best foot forward, the developers weren't doing themselves any favors. Marc Jenson has a track record that might give a cautious investor pause. Jenson pleaded guilty in 1991 to making false statements to a financial institution and not filing his federal income tax and was sentenced to six months in a federal facility and six months of home detention. He has declared bankruptcy. Millions of dollars in state and federal liens have been filed against him over the years. When the previous owner of the Elk Meadows ski area went into bankruptcy, he accused Jenson, who'd made a short-term loan, of then colluding to defraud him and forcing him to default, according to bankruptcy-related papers. That allowed investors to buy the ski area for much cheaper than its appraised value of $20 million to $40 million. (The current club's developers eventually acquired the resort.)

And Jenson's troubles weren't behind him. In late May, he went on trial in Salt Lake City on four counts of securities fraud and one count of racketeering, accused of misleading investors who lent him millions of dollars as part of his plan to take over the Mongoose bicycle division of Brunswick Corp.

The shenanigans continued during the trial. The judge made the rare move of rejecting the first plea bargain, which didn't require Jenson to repay two victims any of the millions he allegedly lost them. Then, Utah Attorney General Mark Shurtleff announced that he'd received pressure from both sides in the case, including a bribe attempt and comically bad threats: The AG said he'd received a picture of a young couple -- his future wife, with Jenson, at a high-school dance decades ago -- along with a headline intimating that his office's prosecution was motivated by old jealousy -- and that there was more such ugliness to come.

Jenson eventually agreed to a reduced charge of three counts of offering the sale of an unregistered security, a third-degree felony. The agreement to a "no-contest in abeyance" requires him to repay $4.1 million to two victims, but the charges will be swept clean if Jenson fulfills the terms within three years, said Scott Reed, chief of the criminal justice division for the Utah Office of the Attorney General. Jenson can still participate in the ownership, management and financing of the Mt. Holly Club.

In spite of this, and perhaps due to his considerable charisma and his proven ability to attract dollars -- "I have access to money like you have access to air," a plaintiff in a recent lawsuit quoted Jenson as saying -- the club has retained him as its marketing director. Asked how the legal issues had affected his work, Jenson told me, "It hasn't been much of an issue."

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