In the early 1980s, the Crowley family’s ski business was skidding down the slopes toward financial disaster.
Under the helm of chairman Ralph Crowley Sr., Wachusett Mountain Ski Area in Princeton had just undergone an ambitious, $12-million expansion that included development of new trails and construction of a base lodge.
But cost overruns, high-interest debt and lackluster revenue due to an unseasonably warm winter threatened to bury the business in an avalanche of red ink.
A determined owner and family-business-savvy bankers, however, saved Wachusett.
“We ended up getting BankBoston to come in with a $6 million loan, which was instrumental in getting it back under the Crowley family control,” recalls Jeff Crowley, Ralph’s son and Wachusett Mountain Ski Area’s president.
Of course, there were proper guarantees in place, but the relationship between BankBoston bankers and Ralph Crowley Sr. was critical.
“A lot of it relied on personal qualities: They were bankers who knew our family,” Jeff Crowley recalls.
The family used the loan from BankBoston – which eventually morphed into Bank of America (BofA) – to repay lenders for the project and buy enough time to start generating cash flow again.
“The good news is Ralph Crowley Sr. persevered, and through his working closely with various bankers, he was able to save the resort from either getting into other people’s hands or losing it altogether,” Jeff Crowley recalls. “We haven’t looked back.”
Fast-forward 40 years, and dramatic advances in snowmaking technology, as well as ongoing improvements have made Wachusett Mountain Ski Area an industry success and area economic engine.
The resort employs about 1,000 during the ski season, and its reputation as a recreational destination is helping attract biotech firms and other employers to North Central Massachusetts.
Many other family businesses, however, haven’t been able to get the money they need to weather tough times.
Ski Trip Partners
A survey by the National Small Business Association found that nearly half of small-business respondents – many of them family firms – needed funds during the recent economic downturn, but were unable to find anyone to front the money.
Nearly one in three said that their lines of credit were reduced. And nearly one in 10 had their loans or lines of credit called in early by the bank.
Family businesses are hailed as the backbone of our economy, but a lot of lenders are spineless when it comes to extending them credit.
“It’s harder and harder to have a banking relationship,” says Ira Bryck, director of the UMass Amherst Family Business Center. “Your [banking] relationship manager must have more loyalty to the bank than you, and these days, the bank has to have more loyalty to the federal government.”
But it’s not always the banker at fault.
“A lot of entrepreneurs have trouble thinking through the worst-case scenario, and the bank really wants to know that the business owner understands the risk,” Bryck notes.
“I think that family businesses need to get over this secretiveness that is often part of it,” he continues. “Your bank is your partner, like it or not.”
Jeff Crowley is the first to admit that running a ski resort is a high-risk enterprise.
“When you think of the amount of money we’ve invested in the ski lifts, it’s so capital-intensive,” he says.
But Wachusett’s BoA banking team, headed by Michael Palmer in Boston and Kevin Cunningham in Connecticut, know the business and realize that one out of every five years is probably not going to be a great year for the ski area.
“They understand that, and they’re there to stand behind you,” Jeff Crowley says.
It helps that that the Crowley family business empire includes an entirely different business – Polar Beverages – that can balance financial fluctuations in the ski industry.
Jeff Crowley, along with siblings Carolyn Crowley Simpson and David Crowley, run Wachusett Mountain Ski Area and Wachusett Village Inn & Conference Center.
Their brothers, Ralph Crowley Jr. and Chris Crowley, run Worcester-based Polar Beverages – the largest privately-owned, soft-drink bottler in the United States. Ralph Jr. and Chris also operate Adirondack Beverages in Scotia, N.Y.
The five siblings are fourth-generation members of the Crowley family business, and equal shareholders in all the companies.
Their bankers, Jeff Crowley says, “really like that we’ve got two counter-cyclical businesses.”
“We’re now at the point where we’ve got a wonderful relationship with Bank of America,” says Jeff Crowley, who is a panelist at the Warren Group-sponsored New England Family Business Conference May 17 at the MGM Grand in Foxwoods in Ledyard, Conn.
“We’ve gone from being one of those ski areas everyone thought was going to disappear or go bankrupt to becoming one of the more successful medium-sized ski areas in the country.”
Not bad for a family skiing operation that nearly crashed.
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