S&P Upgrades Park City as Ski Suit Settled

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DALLAS - Standard & Poor's upgraded Park City, Utah's sales tax revenue bonds to AA-minus from A-plus after settlement of a lawsuit between its two ski resort operators.

The upgrade follows a long legal trail that began in 2011 when the operator of Park City Mountain Resort, through an oversight, failed to renew its lease on property owned by Talisker Land Holdings. Talisker then awarded the lease to Vail Resorts.

When Talisker served an eviction notice on PCMR, the resort operator filed suit seeking an injunction. A judge in the case approved the eviction but ordered the parties to negotiate a settlement.

In 2014, Vail Resorts bought PCMR for $182.5 million in cash, ending all litigation between Talisker and PCMR.

"Going forward, the city does not anticipate any additional lawsuits to occur," S&P analyst Li Yang noted.

The upgrade came as Park City prepared to sell $11.62 million of sales tax revenue bonds.

The top 10 producers of sales tax revenue were primarily in the ski resort services industry, contributing 39% of 2014 revenues, Yang noted.

"We view concentration within this industry to be somewhat volatile and prone to economic fluctuations," Yang said.

With a population of 7,800, Park City is 30 miles east of Salt Lake City in Summit County's Wasatch Mountains.

Because of its small permanent population and large influx of tourists, per capita retail sales are 282% of the national level, Yang said.

"Income levels for the city's residents are very strong, in our view, with a median household effective buying income at 150% of the national level and per capita effective buying income of 196% at the national level in fiscal 2013."

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