Many people think IVGID’s acquisition of Diamond Peak goes all the way back to the District’s creation on May 20, 1961¹. But that’s not the case. As the reader will learn, IVGID exercised an option to purchase Ski Incline² at the instance and request of Japan Golf Promotion (U.S.A.), Inc. (“JGP”) more than fifteen (15) years later, on/about June 29, 1976.

Recall that “Art Wood (an entrepreneur from Oklahoma) and his CPA associate Harold Tiller³, envisioned the creation of Incline Village — a master-planned vacation resort community on the northeastern shore of Lake Tahoe. Ski Incline…was one of Art Wood’s cornerstone recreation amenities in his master-planned ‘Pebble Beach of the Sierra.’

In 1966 Luggi Foeger, a renowned Austrian-born ski resort consultant, was hired to design and build the resort.”⁴. Ski Incline “opened its doors on November 19, 1966, just four months after construction began.”⁴ But Ski Incline was neither built for nor intended to be owned/operated by IVGID⁵. The ski area was constructed and initially operated by Crystal Bay Development Co. (“CBDC”) when it opened in 1966. According to former Incline Village resident Ken Kidwell, on June 4, 1967 it was sold along with the rest of Incline Village to Boise Cascade Home & Land Corporation⁶ (“Boise Cascade”), and it was re-sold to JGP on August 14, 1973⁷. So how did IVGID acquire Ski Incline?

In the spring of 1976 IVGID was negotiating the purchase of Incline Village’s two (2) golf courses, a meeting facility (The Chateau), and bowling alley (Bowl Incline) from JGP⁸. In the course of those negotiations, on or before April 29, 1976⁹, JGP offered IVGID an option to purchase Ski Incline as well as an approximate 2.14 acre unimproved parcel adjacent to the driving range at the Championship Golf Course (today a chipping area and adjoining building) for $1.5 million¹⁰; allegedly “$115,000 less than the(ir) appraised valuation (as) established by the Washoe County Assessor.” On June 29, 1976 the District exercised that option, and on July 13, 1976 the IVGID Board adopted Resolution 1266 which authorized its chairperson to enter into a formal contract to make the purchase.

Why Purchase a Ski Area? Especially one which immediately requires “$355,000 worth of repairs and replacements…$195,000 in maintenance items and $270,000 in facilities expansion.”⁹ And where does the money come from to fund this purchase? Let’s examine the former question first.

A review of the written record insofar as this issue is concerned reveals that there were a number of reasons. Consider the following:

1. The Board felt that “the ski area (wa)s of prime economic value to the area and…continued lack of proper maintenance would (allegedly) be devastating to the community;”⁹

2. To bolster the arguments in favor, the Board chairperson wrongly stated that “the ski area ha(d) been a profitable enterprise¹¹. (Moreover,)…if there was adequate maintenance of the area, the profits shown by the previous operators would (allegedly increase)…by some $50,000 a year;”⁹

3. To further bolster the arguments in favor, the Board chairperson touted Ski Incline’s alleged “unique(ness) when compared with other areas in the Tahoe Basin⁹ because of its snow making capabilit(ies);”¹²

4. And to further bolster the arguments in favor, given the Board was committed to purchasing the golf courses from JGP⁷, “acquisition of the (ski) area by the District would afford year-round employment for (our contemplated)…golf course personnel;”⁹

5. And to further bolster the arguments in favor, special interest members of the community touted that the “property values of every property owner in the District would (allegedly) increase annually by at least the amount…the Board would ask as an increase in the” Recreation Facility Fee⁹ (“RFF”);

6. And to further bolster the arguments in favor, members of the Board touted “the opportunity to purchase the ski area…at a price not exceeding the appraised value…was (allegedly) a high priority of those who responded to (a) recent recreation survey”⁹ authorized at the Board’s April 29, 1976 meeting¹³;

7. Finally, to further bolster the arguments in favor, “District’s Bond Counsel…advised the Board that the District could sell bonds to sufficiently cover the acquisition and the initial cost of rehabilitation, providing the Board was willing to increase the annual (RFF).”⁹

Where The Money Came From: CBDC’s and IVGID’s common playbook had worked so well by paying for the infrastructure improvements necessary for the development of Incline Village, and acquisition of the beaches. Therefore on July 13, 1976 the Board adopted Resolution 1267 which authorized the issuance and sale of $1.5 million of interim debenture no. 2 financing bonds¹⁴, to be junior to the outstanding Revenue Bonds of 1968. This issuance was intended to be in anticipation of issuing new 1976 Recreation Refunding Revenue bonds. Then on July 19, 1976 the IVGID Board adopted Resolution 1262 which authorized the issuance of $5.71 million of revenue bonds (labeled “the Special Obligation Bonds of 1976”). The proceeds of these bonds: paid off the then outstanding principal due under the Revenue Bonds of 1968 (which had been issued to pay for the beaches); paid JGP $1.2 million for Incline Village’s two (2) golf courses, The Chateau, and Bowl Incline; paid JGP $1.5 million for Ski Incline and the chipping area adjacent to the Championship Golf Course driving range; and, provided $600,000 to pay for improvements/repairs to the Championship Golf Course and Ski Incline. And on July 12, 1976, in anticipation of servicing the Special Obligation Bonds of 1976, the IVGID Board adopted Resolution 1261 which doubled the RFF.

So now you know!

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1. See Washoe County Ordinance 97, Bill 57.
2. “In 1985…an expansion plan was developed (which)…saw the addition of the mile-long Crystal Quad chairlift to reach the top of the peak…Because its skiing terrain changed so dramatically with the addition of mostly advanced runs on the upper mountain, the resort’s name was changed to ‘Diamond Peak at Ski Incline,’ alluding to the industry’s ‘black diamond’ symbol for advanced ski terrain. As time passed, the name ‘Diamond Peak’ stuck and ‘Ski Incline’ was retired to the history books.”⁴
3. Known as the father of Incline Village.
4. See https://www.diamondpeak.com/about/diamond-peak-history.
5. As we have demonstrated, when IVGID sought public recreation powers from the Washoe County Board of Commissioners (“the County Board”) its Board representative Harold Tiller expressly represented that if granted, this new power would not be exercised to acquire nor operate any contemplated recreational facility, including Ski Incline. Rather, these facilities would be privately owned, operated and presumably financed [see pages 159-160 of the packet of materials prepared by staff in anticipation of the Board’s May 27, 2020 meeting (“the 5/27/2020 Board packet”)].
6. IVGID wasn’t notified of the sale until May 13, 1968 (see page 380 at https://www.yourtahoeplace.com/uploads/pdf-ivgid/BOT_Packet_Regular_9-23-2015.pdf) shortly before purchasing the beaches from Boise Cascade’s Incline Village development arm, Incline Village, Inc.
7. See pages 240-242 of the packet of materials prepared by staff in anticipation of the Board’s November 18, 2020 meeting (“the 11/18/2020 Board packet”).
8. Go to our How, When, And Why IVGID Acquired the District’s Two Golf Courses And The Chateau discussion.
9. See the minutes of the Board’s April 29, 1976 meeting where IVGID’s “General Manager McMillin read a(n undated) letter from (a) Mr. Katayama, Legal Counsel for JGP…offer(ing)…an ‘option’ to purchase Ski Incline”].
10. See the minutes of the Board’s June 29, 1976 special meeting.
11. Conspicuously, there was no mention made of the massive capital costs associated with golf course ownership/operation.
12. Conspicuously, there was no mention made of the massive water costs associated with manmade snowmaking (in the tens of millions of gallons).
13. See the minutes of the Board’s April 29, 1976 meeting where General Manager (“GM”) Kermit McMillin stated “a postcard was being sent out, on which…all property owners (c)ould vote on the types of recreation that they want(ed) or d(id) not want.”
14. We are not certain whether these bonds ever issued. In fact, Resolution 1267 may have been intended to accomplish nothing more than additional security for the District’s purchase of Ski Incline. However, regardless, these bonds would have been retired when the Special Obligation Bonds of 1976 issued.