It seems that almost daily we hear about segments of the broad luxury market losing not only their luster, but even their footing. There are reports that luxury retailers are bracing for a crash slowdown, and that even real estate in super-rich Dubai is beginning to show signs of weakness.
In fact, says Tim Blixseth, It’s as if the whole world had a financial heart attack.
Wall Street’s credit crisis has not only invaded Main Street (and vice versa), but is crippling segments of the once-impervious luxury real estate market.
This morning, we hear that Blixseth’s Yellowstone Ski Resort has filed for Chapter 11 bankruptcy protection. This invitation-only ski and residence club for 340 uber-rich ($1.5 million buy in) is located in Montana’s Gallatin Mountains near Bozeman. The club has 340 members including Bill Gates, former vice president Dan Quayle, Comcast’s Stephen Burke and cycling star Greg LeMond–and all have to be wondering if the resort will even open this season.
If Chapter 11 protection is granted and the club is able to get a $4.5 million loan, Yellowstone Resort will be able to open its powdery slopes this winter. Looming on the other side of the mountain, though, is around $343 million in debt that is owed to creditors and contractors. Most of that debt, $307 million, is reportedly owed on a loan arranged by Credit Suisse in 2005.
Edra Blixseth took control of the resort last August, after her divorce from Tim Blixseth was finalized and has reportedly been trying to sell some of the Blixseth’s other luxury properties located around the world. The Yellowstone Club is valued at $778 million, according to court filings–not including unsold memberships, which may be worth as much as $336 million.
Like other property holders and developers around the world, Yellowstone Club members and the Blixseths are hoping that recovery from this financial heart attack will quickly bring credit flowing through the world’s clogged financial arteries.
