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Show United Park claims ski resorts -defaulted on lease agreements by CHRISTOPHER SMART Record staff writer . A mining company that last summer sum-mer was the object of a takeover has sent notices claiming the Park City Ski ' Area and Deer Valley Resort have defaulted on their long-term leases of ski terrain. United Park City Mines claims the Park City Ski Area violated the lease by selling water rights improperly, trespassing and not paying all revenues promised, a source said. The Park Record could not obtain information in-formation on what violations are alleged against Deer Valley Resort. Spokesmen for the Park City Ski Area and Deer Valley Resort said their respective companies were in full compliance with the lease agreements with United Park City Mines. Both said the matter will be settled by an arbitrator or in court. The source, who requested anonymity, said the stakes in the dispute could be high. He said the action ac-tion could be an effort to gain control of the resort land or seek increases in payments the resorts make to the . mining company. In its proxy statement, issued before the mining company's annual stockholder's meeting Dec. 16, the new management of United Park states that Greater Park City Corp. which owns Park City Ski Area, and Royal Street Land Co., which owns Deer Valley, are in default. -Management ' is informedand "' believes that there may be certain defaults under the contracts with Greater Park City Corp. and Royal Street Land Co.," the proxy states, in part. A Utah firm and a New York City investment company joined forces to take over United Park in July., Bamberger Investment and Ex-' ploration Co., which owns 9.6 percent per-cent of the mining company, teamed with Loeb Investors, which purchased purchas-ed more than 30 percent of the company's com-pany's outstanding shares in July to take control of United Park. A filing with the Securities and Exchange Ex-change Commission at the time of the acquisition indicated Bamberger -and Loeb intended to increase United Park's share values by "realizing the potential values of the company's real properties in the Park City area." David W. Bernolfo was elected president of United Park in August. United Park secretary Ed Osika said the Park City Ski Area and Deer Valley Resort had been served with notices of default from the mining company. He declined further comment, com-ment, stating United Park was awaiting responses from both companies. com-panies. Osika said the period for comments would end Dec. 16, the date of the stockholders meeting. Spokesmen for both companies say they have responded to United Park. The default notice delivered to the Park City Ski Area claimed the resort company was in violation of the lease agreement in at least three major areas, said the source, whose information was independently confirmed con-firmed by other sources. The default notice alleges, first, that the Park "Cify Ski Area-is not-'' not-'' payingr to 'United Park "all the revenues from ski lift ticket sales promised to the mining company in ; the contract, the source said. Second, United Park charges that a $2 million water sale the ski area has negotiated with the Park City Municipal Corp. is unacceptable under the contract. United Park has filed a protest against the sale of Spiro Tunnel water with the Utah Division of Water Rights. Third, the mining company charges that Park City Ski Area is trespassing on United Park property in and around the ski area boundaries, boun-daries, the source said. t ? Nick Badami, chairman of the board of Alpine Meadows Corp., the :" parent company of the Park City Ski Area, said the allegations .have "seriously hurt the relationshii) between be-tween us and the mining company." Badami noted that the development of Park City Ski Area and Deer Valley Resort has been a cooperative effort with the former management of the mining company over the last 10 years. "We feel we've been severely damaged by the mining company in the last 60 days," he said. Further, Badami said the Park City Ski Area has "fulfilled all its obligations (to United Park)." Ask- ed further about the allegations, Badami said, "We'll let the courts decide." Deer Valley Resort executive vice president John Miiller also said that his company was in compliance with the terms of lease contracts with United Park. He said a third party may be needed to solve the disagreement, disagree-ment, but he would not comment on the details of the default charge Deef Valley received from the min "tag company?" "" "' " f . The lease agreements between the Park City Ski Area and United Park City Mines and between Deer Valley Resort and the mining company are UPCMtoA7 (DaDimttnmiiinedl ffipqpimn . . . j UPCMfromAI complex and lengthy. However, under the terms of the 1971 agreement (amended in 1975) between the ski area and the mining company, the Park City Ski Area agreed to pay United Park City Mines 1 percent of its gross lift ticket receipts of the first $100,000 taken in each year for the first and second 20-year periods of the lease. In addition, those terms call for the ski area to pay amounts over $100,000 for the first and second 20-year periods of the lease, the source said. Those terms increase to 2 percent of the first $100,000 and 1 percent of all receipts thereafter in the third 20-year period of the lease. The contract con-tract again increases the percent of receipts paid to United Park in the v fourth 20-year period to 3 percent of the first $100,000 and 1.5 percent of all receipts taken in thereafter. United Park's default notice contends con-tends the mining company is not receiving its just share of receipts as outlined under the contract, the source said. In addition, United Park has filed a protest with the Utah Division of Water Rights concerning the ski area's sale of Spiro Tunnel water to the municipality. Weber Area water engineer Jesse Anderson said United Park filed the protest on Nov. 16. Under an agreement reached in July between the municipality and the ski area, the Spiro water rights would be purchased by the city for $2 million. Under the terms of its contracts ' with United Park, the ski area was to gain title to the water in 1990. The city is scheduled to begin making payments into an escrow account so 5 that when the Park City Ski Area v gains the water rights, the transac- "4 tion can be finalized. According to ; the escrow agreement between the i city and the ski area, the money will not change hands until the water . : . right is free and clear. And finally, the source said that the mining company has charged ; the Park City Ski Area with ' trespass, or unauthorized use of mining reservations, around the gondola angle station and other loca- ? tions in and around the ski area boundaries. 4 Last summer, United Park ; ordered Park City Ski Area to vacate a number of structures at the -top of King Road near the Mid-Mountain Mid-Mountain Lodge. |