It’s the day before Q Burke Mountain opens for the winter, and Ary Quiros could just as well be preparing for battle as for business.
The new CEO is opening the ski resort for the first time since he started at the mountain the previous winter, and he’s amped. If Quiros, 36, can turn this chronically failing but beloved ski area into a stable business, he will succeed where prior, much wealthier, owners have failed.
The arc of history and local expectations give him long odds. But Quiros — and his staff — are determined.
Wearing a weathered, Army green jacket and frequently checking a watch face practically the size of his wrist, Quiros shuttles from one outpost of operations to another to check on his troops: snowmaking, ticket sales, kitchen, pub and cafeteria. Finances. Marketing. Housecleaning.
“It’s like being in the Army again,” Quiros says. The 12-year veteran of the wars in Iraq and Afghanistan is now a captain with the Vermont National Guard. He relishes intensity in the field, clarity of mission, camaraderie, and he applies his military leadership experience to Q Burke Mountain operations.
“You take care of them,” Quiros says about both his military units and staff. “They watch your back, and you move forward.”
The responsibility to provide for and protect his staff weighs heavily on Quiros, perhaps even propels him.
And his military analogy for mountain operations is echoed by his father, Ariel Quiros, who purchased Burke Mountain in 2012.
Ariel Quiros says half a dozen buyers before him couldn’t close the deal because of the mountain’s high-profile history and reputation with banks and investors: Bankruptcies dating back to the 1980s. A bounced tax check to the town for $97,374.30. More bankruptcies. A public auction. Ginn Companies’ $675 million default with Credit Suisse bank.
“Boom boom boom, bombs away,” Quiros says. “Everybody’s shelling the mountain, all the banks, doesn’t wanna fund it. All the businessmen failed.”
Some of them, Quiros notes, possessed or managed wealth that far exceeds his own, built from international trade since the 1980s. Bernd Schaefers was a German movie producer who made “The NeverEnding Story” and “In the Name of the Rose.” Donald Graham founded investment firms that collectively manage upwards of $7 billion. Developer Bobby Ginn presided over real estate transactions across the country that also measure in the billions.
None of their business plans at Burke held. Some went down in flames.
And plans now are as grand as ever: to brand the mountain as year-round training grounds for elite athletes. Buildout is expected to cost about $108 million and will include four hotels, an aquatic center, tennis facility and indoor mountain biking park.
But this time, even more is at stake.
Now, Q Burke’s success and reputation is also inextricably linked to that of the massive-scale Northeast Kingdom Economic Development Project Ariel Quiros has launched with his business partner at Jay Peak ski resort, Bill Stenger.
The pair is raising roughly $600 million to fund the Q Burke buildout, plus continuing expansions at Jay Peak, a mixed-use waterfront and downtown block in Newport, the North American headquarters of a Korean biotech firm, and a transformation of the state-owned Newport State Airport.
The money comes from international investors seeking residency in the United States through the federal EB-5 program. In exchange for an infusion of at least $500,000 in an American business, the investors and their immediate family members get a fast track to green cards, but only if their investment can be credited with at least 10 jobs of economic activity within the first two years.
It’s off to a rocky start. When Quiros bought the ski area, many locals and loyal skiers bristled that he changed its name to Q Burke Mountain — a move they perceived as arrogant.
Quiros says the name change is a message to investors.
People the world over know Colorado and Vermont ski areas, Quiros says. But Burke Mountain’s international reputation for chronic failure was worthless to him. He needed to change the name to associate “Burke” with his and Stenger’s success at Jay Peak, which businesspeople know is owned by Q.Resorts.
Quiros understands the community doesn’t like the new name, he says. But he believes they’ll come to appreciate the value it brings, once he proves the long-term value of his plan. He thought about public perception “300 percent,” and stands by his decision.
“If I make a mistake here, I lose everything! I lose everything,” Quiros says. “Because in the world market, I don’t get the money from a bank. I get from word of mouth.”
The history of Burke Mountain skiing
The ski area at Burke Mountain has always been an integral part of the community and economy. Even before a road was built to the summit in 1932, timber from the mountain fueled a local lumber industry.
Land for Darling State Park (Burke Mountain) was donated in 1933, and the federal government stationed the Civilian Conservation Corps at Burke to build a picnic area, clear ski trails and assist the fire service. In the years to come, a local outing club sponsored ski events on the new trails, and the alpine culture took hold.
Thirteen local businessmen formed Ski Burke Mountain Inc. in 1953. With the help of a state appropriation the company expanded operations with more trails and a warming shelter. But finances couldn’t keep up, according to a history of the town by Phyllis Burbank, “Burke: More than just a mountain.”
Ski Burke sold to Burke Mountain Recreation Inc., in 1965. And after more expansions, the mountain sold again to Burke Mountain Enterprises in 1987, this time after private condos were built and much of the land broken down and sold off.
That cycle has since intensified with seven successive, unsuccessful owners since Burke Mountain Enterprises was foreclosed in 1991.
Through all the management changes and disappointments, the one constant has been community members, whose sense of investment in the ski area has only intensified as they’ve buoyed it through one bankruptcy and sell-out after another. Because the mountain lacks the cachet of such tony destinations as Stowe or Jay Peak, its reliably “authentic” vibe as a local’s mountain has sustained the ski area through the failures of its owners.
Tim McGuire, who came on as vice president of development for Ginn in 2006, says he finds that every ski area’s community thinks its own mountain is special, but there’s something different at work at Burke.
The town’s assistant treasurer, Cathi Feeley, recalls the hundreds of season passes locals purchased from Burke 2000 to inject much-needed capital into operations after the auction.
Certainly Burke Mountain Academy, the prestigious ski school that’s known for Olympic contenders such as this year’s Mikaela Shiffrin, is a point of pride for the town. Burke Mountain Academy is also largely credited with keeping the ski area together over the years: The slopes are fundamental to the institution’s own existence.
The nonprofit Kingdom Trails Association, which has gradually built up an award-winning network of mountain biking and Nordic ski trails — along with community equity — also adds to the X-factor. Many staff and volunteers of Kingdom Trails are loyal local skiers whose relationships strengthen ties between the mountain and the community.
The elder Ariel Quiros, who says he grew up visiting Vermont, including Burke Mountain, with his family as a child, gets this.
He says the combination of Burke Mountain Academy, Kingdom Trails and the majesty of Burke Mountain has made the community and the ski area what it is.
“To which stand artillery rounds on it every day,” Ariel Quiros says, “because it has always failed.”
His family’s commitment to the mountain, and the task he has given to his son, is to be the first to succeed in business at Burke — but in a way that is in keeping with the character of the town.
“The Ginns, the Grahams, the Lou Adlers. These are billion-dollar men,” Ariel Quiros says. “Why did they allow the mountain to go bankrupt? Why did they allow to go into shambles? Why?”
Their mistake was commercializing the mountain, the elder Quiros believes.
Burke Mountain Academy headmaster Kirk Dwyer has seen the mountain through many incarnations. Far from failure, he credits Donald Graham with saving both the mountain and the school as a quiet benefactor through the years.
Graham funded the ski area’s purchase at auction in 2000, Dwyer says, carried its losses until he could find a private buyer, then continued to invest money and connections even after dissolving his ownership. When Quiros bought Q Burke, Graham put up most of the academy’s $400,000 investment in snowmaking to help the new owners get off to a good start, he says.
But Quiros characterizes the legacy of past owners as one of neglect.
“They chopped up the land, sold it to their friends and friends, and left the resort to hang out by itself. That’s why it failed,” he says.
They didn’t care about Burke’s character, he says. They cared about money.
Ariel Quiros swears that’s not his interest in building a resort in town, though certainly Q Burke’s business must sustain itself, he says.
“You don’t turn a Burke Mountain into Walt Disney,” the owner says, perhaps taking a jab at former overseer of operations Charlie Hardiman, who helped develop Disney’s Pleasure Island in Florida. “You don’t put in valet parking at … Burke Mountain. You don’t start giving everybody … leather jackets. That’s abusive.”
“God forbid I change anything here. God forbid,” Ariel Quiros says. “You gotta look at the mountain. You gotta look at these people. You gotta look at Burke.”
Burke community is skeptical
As new CEO Ary Quiros looks at the mountain, he sees possibility and a dedicated staff. But as he looks at the community, he sees mostly skepticism.
Preparing for opening day, Ary Quiros repeats several times that “Ninety-nine percent of this town is just waiting for me to fail.”
And he may be right.
Most observers in the town and surrounding communities have had their hearts broken so many times, they confess, they’re protecting themselves by not getting their hopes up this round. They no longer believe in the promises of new owners. They believe in themselves.
But that doesn’t mean they want Quiros — and certainly not the mountain — to fail. Whether they think establishing an elite training resort is possible, the community would love nothing more than to see it succeed.
“We’re always hopeful that Burke will become what they say,” says Cathy Paris, a local dairy farmer and owner of the Freighthouse restaurant in neighboring Lyndon.
Paris learned to ski at Burke Mountain, as did her children, their friends, her current young employees. “And it has changed over the years — the lower lodge, more snowmaking, chair lifts,” she says.
But never as much as they say it will. Each time a new owner comes aboard, their hopes lift, she says. But each time, before long, they’re dropped.
“We’ve all grown up with it. And we love to ski it,” Paris says. “It’s hard to watch it fail.”
That legacy would disadvantage any new management in the quest for public favor. And Town Treasurer Priscilla Aldrich, who oversaw the mountain’s tax sale when she came onboard 20 years ago, acknowledges a natural distrust that follows big players when they come in to small towns.
This inherent challenge was exacerbated by perceptions of nepotism when Ariel Quiros installed his son as CEO. Ary Quiros, a telemark skier with a master’s degree in business and subsequent training at an elite Spanish school for hospitality management, has nonetheless never worked on a ski mountain before — much less run one.
“They expected me to be a rich kid,” Ary Quiros says, “and come in and do rich kid stuff.”
Changes to mountain operations
What he did, his staff says, was get to work.
Jason Lefebvre, now director of mountain operations, has worked on the mountain for 15 years. Denny Degreenia, newly in charge of snowmaking, buildings and grounds, has been there for 21 years.
They had never seen an owner come out to make snow or work the mountain with staff in the cold, Lefebvre and Degreenia said. But that’s exactly what Ary Quiros did and continues to do, they say.
By most accounts, from current and former employees (both disgruntled and optimistic), Quiros spent his first several months on the mountain in observation mode.
Quiros says his original plan was to spend two or three years learning the ropes and getting a sense of how the mountain was run. But what he found were scores of inefficiencies, he says.
In concert with the Q Burke board — consisting of his father Ariel Quiros and legal counsel Bill Kelly as chief operating officer in consultation with Jay Peak president Bill Stenger — the new team cut staff in summer 2013. Six upper-level managers left, and departments were trimmed to the bone.
Stenger underscores that the personnel reductions were not a matter of “cutbacks,” which would imply a reduction of services. Rather, they were organizational efficiencies to reduce overhead costs and reflect the grim reality of the mountain’s finances, he says; the resort was in the red for a reason.
Stenger says some positions at Q Burke were paid more than their counterparts at Jay Peak, though the tiny mountain consistently served a fraction of the skiers at 75,000 per year — and many of those were season pass holders. Some remaining staff at Q Burke, whose wages were immediately raised after the personnel changes, say there had long been discrepancies in compensation between upper management and support staff.
McGuire, who used to run the ski area, disputes that Q Burke salaries were out of line with industry standards. He also notes that operational plans, including compensation, had been approved by the Q Burke board.
Whether or not locals knew about or agreed with the ins and outs of the business decisions, many felt betrayed, having heard commitments to developing the mountain as a job creator for the region.
The exodus of year-round staff also swept a lot of institutional knowledge out of management, leaving some to wonder if operations would be up to par in 2014.
Some employees opted not to return to Q Burke after the management cleaned house, and some who stayed have done so more out of necessity than because of a commitment to the Quiros’ vision.
But others have found new opportunity within the changed structure, and still others have come back after spells off the mountain.
Kitchen manager Lindsey Ryan says the chance to redesign the menu meant a lot to her staff, as did investment in new kitchen equipment.
Ary Quiros lists the improvements he’s overseen since summer: more and better safety equipment for workers, heating the maintenance shed, interior renovations at the base lodge, the new menu.
Lefebvre says working side-by-side with Quiros on mountain operations — both on the mountain and in business meetings with state and local officials — has helped him grow.
“I feel more confident in meetings now, and sitting down in places where I was never brought in before,” Lefebvre says.
He and Degreenia both work upwards of 70 hours per week, on average. It’s by choice, they say, even though no one on the mountain is paid overtime.
“Ary has a way of making you feel important,” Degreenia says. “It’s easy to come to work.”
Quiros also credits his staff with engineering new solutions to get more out of snowmaking. Trail conditions, more than amenities, are a priority for the skier’s skiers who comprise the mountain’s bread and butter.
After a January meeting with Burke Mountain Academy, Ariel Quiros said the school was thrilled with Q Burke’s early season performance. The students enjoyed more snow on their runs than they had the same time the previous year, he said.
Commenters on some online ski forums, however, reported disappointment on the public slopes that they chalked up more to faulty strategy than admittedly unfavorable weather.
And Ary’s military leadership style doesn’t motivate all his staff. He’s known for having a “short fuse” and a black-and-white view of situations that make compromise a precarious prospect.
Ary is rigid, father Ariel Quiros agrees.
“There’s no curves with him,” Ariel says. “And some people like that. Some people don’t.” If Ary wields unbending directives, he says, they’re driven by his sense of responsibility to make the mountain work.
It’s his obligation to make good on his father’s commitment, Ary says. Both the family legacy and his responsibility to maintain employment for his staff weigh heavily on his shoulders.
Rift in the community
As mountain operations were beginning to take shape on one track at Q Burke with new management at the helm, the company’s relationships off the mountain also shifted.
First, local public school groups were told they’d be charged more for ski programs. The new pricing structure also discouraged them from coming on Fridays — a typical day for ski programming at Q Burke and other resorts.
Community members chafed at the notion that management may want to keep the slopes clear for customers paying full freight, and rumors even circulated that the school program itself had been cancelled.
Stenger says the school programs are valuable, and present a similar conundrum at Jay Peak, which also has historically offered a deal to local schools further north. But the finances simply have to make sense within the bigger picture of the mountain, he says, as do logistics. If all the school kids try to ski on the same day, the class sizes are too big and the slopes too crowded, which isn’t good for anybody, he says.
On top of the changes in management and school programs, a more high profile controversy erupted in December. Just days after Q Burke’s slopes opened, news broke that negotiations over coordinated programs had faltered between the company and Kingdom Trails.
Simmering tensions boiled over.
Backlash over a potential split erupted on social media — to the point of a threatened boycott that even began spilling over to Jay Peak.
And while the board stepped in to frame the decision as a difficult but necessary business situation, Ary Quiros responded angrily to a concerned mountain biker in an email that went viral. It fueled the fire of suspicion and affirmed skeptics’ worst fears: that the community would be marginalized by new management at the mountain it had sustained through decades of struggle.
Stenger stepped in quickly to smooth over both public perceptions and the mountain’s relationship with Kingdom Trails. He also walked back Ary’s rhetoric.
“We will reach out to KT to continue to work on a formula that is healthy and successful for all,” Stenger wrote in an email he made public. He continues to assure the community of his confidence that a mutually beneficial solution is possible. Ary Quiros later apologized publicly for bringing negative attention to the mountain.
Stenger dismisses any suggestion that the flap could impact the rest of his and Ariel Quiros’ Northeast Kingdom projects.
“Let’s not over-amplify a couple of frankly unfortunate mistakes that were made, and convert that into a tornado that is going to derail a $500 million program,” Stenger said. “I’ve been working for half a dozen years on these programs, and six weeks of problems does not deserve to derail that hard work. And it won’t.”
At a Jay Peak press conference in December, Stenger acknowledged that Q Burke leadership needs to do a better job of communicating the reasons for some of their difficult decisions. They’ve done good work, he says, and will repair the bridges that need fixing in order to continue.
In the wake of the controversy, Kingdom Trails executive director Tim Tierney had issued a public plea, urging people to not try to spite the Quiros’ ownership by abandoning the mountain.
A boycott would hurt the staff and community, he said. A similar sentiment grew on social media, including some of the forums that continue to hold Ary Quiros’ feet to the fire.
As the dust from that settles, the rift that is so clearly exposed reveals a common goal: making the mountain work. There is much at stake for everyone involved.
The mountain is a playground and landmark with a long history in East Burke, where the community’s identity is tied up with the resort. The mountain provides a living for the people who work there and helps drive the economy for small businesses in the area. Bill Stenger’s reputation at Jay Peak is riding on the project’s success or failure. And it’s one crucial piece in a $500 million entrepreneurial puzzle for international tycoon Ariel Quiros.
One way or another, it’s in the best interest of all parties to reconcile. Their investments in the mountain — whatever form that takes and whatever its name means to them — depend on it.
UPDATE: This article was updated at 12:43 p.m. on Jan. 17, 2014.