Ski resort defaults on loan
Assets of Laurel Mountain Ski Resort are going on the auction block.
Somerset Trust Co. is foreclosing on equipment at the financially troubled Ligonier Township ski resort because its owner, George Mowl, defaulted on a $1 million loan. Mowl borrowed the money in 1999 to reopen the resort, which had been closed for 10 years.
The resort is located on a 387-acre tract between Laughlintown in Westmoreland County and Jennerstown in Somerset County. The land is owned by the state, which leased it to Mowl.
The bank, in legal documents filed in Somerset County Court, maintains Mowl hasn't made a loan payment since Feb. 28, 2003, a fact that Mowl does not dispute. The bank will put the equipment up for sale at auction on Sept. 17.
"We're not going to contest it," Mowl said. "The foreclosure will sort of clear everything up."
Warm weather and insufficient snowfall resulted in several less-than-profitable years from 1999 to 2003 at the resort. Financial problems prevented Mowl from opening the resort last winter.
In addition to the bank loan, Mowl's Laurel Mountain Ski Co. received a $200,000 grant from the state Department of Economic Development and a $300,000 low-interest state loan to help finance the resort's 1999 reopening.
Since then, the debts have continued to mount.
In 2000, an electrical contractor sued the company for more than $208,000 for electrical work, and last year, the state filed a tax lien for more than $10,000. Mowl's company still owes the Ligonier Valley School District $8,100 in taxes. A lawsuit is pending in Westmoreland County seeking more than $43,000 in unpaid electric bills.
Mowl lost his lease with the state Department of Conservation and Natural Resources earlier this year after he failed to make $100,000 in lease payments for the land.
"The state's been more than good to me," Mowl said. "Their hearts were in the right place. Whatever they do to me, I deserve."
Although several attempts have fallen through, Mowl still believes there are investors who may be interested in purchasing the equipment and leasing the land from the state.
Mowl said he's heard that investors who tried to swing a deal with the state to open a resort at Prince Gallitzin State Park in Cambria County may be interested in Laurel Mountain. He added that an investment group had been interested in a proposed resort until a feasibility study in June found the project would be financially and environmentally risky.
The ski resort nearly was sold last year to a Virginia-based investment group, but after plans to buy it were announced, the president of the company died and the deal never materialized.
Ligonier Mayor Ormond "Butch" Bellas also had planned to form a group of investors to take a shot at making the ski resort profitable. But Bellas said his plan was put on hold after he learned Somerset Trust Co. was taking possession of equipment.
"I've been waiting and didn't want to stick my neck out," Bellas said. "I still have that idea in the back of my head. There still may be some people out there willing to take a chance."
Bellas, the former ski patrol director at Laurel Mountain, said he doubts the bank will auction off the equipment because most of it is worthless. He said the groomers that are used to prepare the slopes are worth about $500,000, but the lights have been damaged by weather. Although the snow-making equipment may be of value, the plumbing for the equipment is buried in the ground.
"I think they're just trying to push somebody into doing something," he added.
Johnstown attorney James Walsh, who represents the bank, did not respond to a telephone message left at his office.
Mowl said he has a lawsuit pending against Somerset Trust but declined to discuss details except to say he believes the bank is in breach of contract. Despite the threat of a sale of equipment, Mowl said he hopes a buyer is found and the resort reopens.
"It's still not too late," he said. "Not a lot needs to be done."