| 1. Reclamation Requirements for Mt. Ashland Ski Area
1.1. Reclamation Standards. The city, as permittee under the 1992
Forest Service Ski Area Special Use Permit, must perform certain reclamation
measures in the Mt. Ashland Ski Area upon termination of the permit in the
year 2017 or upon revocation of the permit should the ski area cease to operate
prior to that time. The source of this requirement is in section X.A of the
permit which requires the city to:
"remove within a reasonable time as established by the authorized officer,
the structures and improvements and shall restore the site to a condition
satisfactory to the authorized officer, unless otherwise waived in writing
or in the authorization. If the holder fails to remove the structures or
improvements within a reasonable time period, as determined by the authorized
officer, they shall become the property of the United States without compensation
to the holder, but that shall not relieve the holder's liability for the
removal and site restoration costs." (Emphasis added.)
Prior to the establishment of reclamation requirements for the ski area,
the Forest Service will conduct a "needs assessment" in consultation with
the city to consider whether the operation should be continued or modified
"to best serve the public interest." Forest Service Manual (FSM) 2341.23.
(The Forest Service Manual is utilized by officers and staff of the Forest
Service to provide direction, responsibilities, objectives, policies and
instructions regarding programs and activities under the jurisdiction of
the Forest Service.)
The ski area has already been the subject of a needs assessment which was
completed in 1992. This assessment addressed the work necessary to achieve
an "accelerated natural recovery process to protect resource values from
degradation."See p. 1, Environmental Assessment, Mt. Ashland Ski Area
Restoration, April 1992, USDA Forest Service, Rogue River National Forest.
An environmental assessment was made at this time in order for the Forest
Service to determine what reclamation activities should be implemented should
the ski area close as a result of the then permittee, Ski Ashland, Inc.,
a Washington corporation, dismantling the facilities if it failed to find
a buyer.
The goals and objectives of the reclamation requirements were summarized
in the environmental analysis as follows:
"To protect the resource values of the area within a reasonable time i.e.,
to deter environmental degradation until natural forces of erosion are
stabilized.
"To get the area to a stage that vegetation will stabilize the area if the
existing facilities are dismantled i.e., to reduce the erosion rate to a
more natural rate once the man-made facilities are removed.
"To have disturbed sites dominated by native vegetation in the long term,
and to minimize the spread of exotic plant species beyond their point of
introduction.
"To restore the site to a level that meets the Forest Service Standards and
Guidelines in the Rogue River National Forest (RRNF) Land and Resource Management
Plan, 1990 (Forest Plan).
"To accomplish the restoration phase of the project in a cost effective and
reasonable manner, i.e., to adhere to Forest Service Best Management Practices
(BMP's) for similar kinds of activities."
The 1992 needs assessment is consistent with other reclamation requirements
imposed or proposed in terminated ski areas elsewhere. Within the last decade
several ski areas in Colorado have closed, including Hidden Valley, Geneva
Basin, Cuchara Valley and Conquistador. The requirements of both the National
Park Service and the Forest Service in those areas are consistent with the
1992 needs assessment completed locally. The reclamation projects in Colorado
include both rehabilitation and restoration aspects. Rehabilitation, in this
context, includes the removal of all structures and equipment and regrading
of slopes, while restoration includes revegetation of native plant species
and removal of any exotic species encroachment. The 1992 needs assessment
process ultimately resulted in an alternative that required the removal of
structures and equipment, regrading of slopes, and revegetation of cleared
areas. This alternative would have restored the ski area to a level that
protects water quality, and it met State water quality standards, stabilized
the site, reduced surface erosion rates and mass wasting. The alternative
was never implemented, of course, since the ski area never closed.
1.2. Reclamation Responsibility. While the city is the entity ultimately
responsible for the performance of the terms and conditions of the Forest
Service Special Use Permit, Mt. Ashland Association (MAA) has assumed all
responsibility of the city under the permit pursuant to a 1992 lease between
the city and MAA. Section 2.2 of that lease provides that MAA, as lessee,
assumes all permit liabilities:
"The terms, covenants, provisions and conditions of the Permit are incorporated
into this Lease and Lessee assumes responsibility for payment and performance
of all obligations of the City of Ashland under the Permit. Lessee agrees
to hold harmless, defend and indemnify Lessor from and against any loss,
claim or liability suffered by or asserted against Lessor as a result of
Lessee's failure to fully pay and perform the obligations of the Permit."
Ultimate responsibility remains the city's, however. If MAA were to default
under the lease and fail to indemnify the city, the city must answer to the
Forest Service. Section VII.A of the permit explicitly provides that the
city (as the permit "holder") remains liable even though MAA is operating
the facility:
"The holder may sublease the use of land and improvements covered under this
permit . . . . The holder shall continue to be responsible for compliance
with all conditions of this permit by persons to whom such premises may be
sublet . . ."
In the event that MAA failed to perform to the satisfaction of the Forest
Service, should there be a termination, the city would be required to meet
the full obligations and costs for the rehabilitation and restoration of
the ski area.
To that extent, the city ensured that sufficient ski resort assets would
be available to the city for reclamation in its requirement for a minimum
liquidation value under the lease. This concept is more fully explained in
Lee Tuneberg's memo to the council dated September 15, 2003.
1.3. Post Reclamation Responsibilities. If the permit terminates at
its stated term (the year 2017) or is revoked prior to this date, reclamation
is required to be performed to the satisfaction of the Forest Service. Once
the reclamation has been completed and accepted by the Forest Service, the
liability of the city as the permit holder ends. The city would have no legal
or financial responsibility for further rehabilitation or restoration projects.
Post reclamation responsibilities then lie with the Forest Service. How those
responsibilities are exercised is addressed partly through agreements that
currently exist between the Forest Service and the city. Those agreements
include the 1929 Cooperative Agreement between the City of Ashland and the
Forest Service for the management of the Ashland Watershed, and a Memorandum
of Understanding (MOU) drafted in 1996, and updated in 1999. This MOU and
its update define the roles and responsibilities of both the City of Ashland
and the Forest Service in the management of the Watershed.
Under these agreements, the Forest Service has the responsibility to administer
the Ashland Watershed consistent with conserving and protecting the city's
water supply, and to communicate and coordinate watershed management activities
with the city. This includes involving the city in planning and implementation
of projects in the Ashland Watershed and providing resource specialists on
a contractual basis to the city for projects influencing the Ashland Watershed.
The City agreed to make staff available to provide input to the Forest Service
during all project planning, implementation, and management reviews and to
make staff and personnel available to work in coordination on projects that
achieve mutual objectives. Thus, as it did in the development of the HazRed
and Ashland Watershed Protection projects, the city can play a very influential
role in determining future uses of the former ski area.
2. The Rights and Responsibilities of the City and of the Mt. Ashland
Association under the Mt. Ashland Ski Area Lease.
2.1. Rights and Responsibilities Transferred to MAA. All rights and
responsibilities of the city under the Forest Service Special Use Permit
have been transferred to the Mt. Ashland Association (MAA). The Mt. Ashland
Ski Area Lease transfers all rights of possession and control by the city
in the Mt. Ashland Ski Area to MAA.
2.2. MAA Responsibilities. The permit contains a multitude of provisions
comprehensively addressing access, improvements, conditions of operation
and maintenance, insurance, fees, payments, liability, etc. For instance,
paragraph I.G of the permit addresses the requirements for compliance with
the Master Development Plan:
"G. Master Development Plan. In consideration of the privileges authorized
by this permit, the holder agrees to prepare and submit changes in the Master
Development Plan encompassing the entire winter sports resort presently
envisioned for development in connection with the National Forest lands
authorized by this permit, and in a form acceptable to the Forest Service.
Additional construction beyond maintenance of existing improvements shall
not be authorized until this plan has been amended. Planning should encompass
all the area authorized for use by this permit. The accepted Master Development
Plan shall become a part of this permit. For planning purposes, a capacity
for the ski area in people-at-one time shall be established in the Master
Development Plan and appropriate National Environmental Policy Act (NEPA)
document. The overall development shall not exceed that capacity without
further environmental analysis documentation through appropriate NEPA process."
Other provisions require protection of habitat for endangered and threatened
species with protection being the responsibility of the permit holder (the
city) as directed by the Regional Forester. (Paragraph IX.M)
2.3. Role of City in Operation of Ski Area. In conjunction with the
city obtaining the permit, the city leased the assets it acquired from Ski
Ashland, Inc., the former operator of the ski area, and the ski area (with
consent of the Forest Service) to Mt. Ashland Association (MAA), an Oregon
nonprofit corporation formed solely for the purpose of operating the ski
area. As an aside, during the campaign to raise funds to "save" Mt. Ashland,
there was much discussion on how the ski area should be operated and what
the city's role should be. From my perspective and recollection, there was
never any intent that the city would operate the ski area. The city did not
want to be in the ski business. The relationship between the Oregon Shakespeare
Festival (OSF) and the city was used as a model for the relationship between
the city and MAA. This relationship with OSF is more or less a simple
landlord-tenant relationship. The city owns many of the Shakespeare improvements
and much of the property upon which the improvements are located, but has
no say on the operation of OSF.
2.4. MAA Rights. The MAA lease was drafted to ensure that MAA has
all of the responsibility for the permit requirements and to ensure that
the city was held harmless from any liability for payments required to the
Forest Service or performance under the permit:
2.4.1. MAA has the "sole and exclusive possession and use" of the ski area
"for the purpose of constructing, improving, maintaining and operating year-round
educational and/or recreational facilities for the benefit of the general
public (including but not limited to a ski area and/or winter sports resort)."
MAA has the right to make changes and improvements to the leased property
without seeking consent of the city.
2.4.2. MAA is required to operate the ski area, keep all the equipment and
buildings repaired, maintained and insured and pay all utilities, taxes,
etc. These provisions are common to "triple-net" leases and are as close
as one can come to where the city incurs no costs, liabilities or
responsibilities for the property.
2.5. MAA Relationship with Forest Service. The Forest Service required
that the city obtain Forest Service approval before the city entered into
the lease with MAA. The Forest Service gave such approval. As such, the Forest
Service works directly with MAA in all aspects of the ski operation since
MAA has all of the responsibility of the city under |
