Durango’s Purgatory ski area cuts expenses, sends seasonal workers home as it tries to close $900K hole

It’s crunch time at southern Colorado’s Purgatory ski area. 

The snowfall has been weak this season. The spring break crowds are surging. And the 10-year owner of the resort is slashing spending as part of loan refinancing. The cost-cutting is fueling online speculation that Purgatory is about to sell or go under. Which is “straight up wrong,” said the resort’s owner, James Coleman.

“Purg is not going anywhere,” he said. 

The cost-cutting is “what every ski area does when you go through the type of winter we are having,” said Purgatory General Manager Dave Rathbun, a resort industry veteran who has worked in management at Stratton and Killington ski areas in Vermont, Copper Mountain and Winter Park, Sugar Bowl in California and Oregon’s Mount Bachelor. “We have to balance our expenses and our revenue. Any lender is going to look at current situations and make judgments about what interest rate they are going to charge. What we are doing is ski area 101.”

In the past couple weeks, top management at Purgatory has sent emails to managers noting a need to drastically cut spending. The emails said the ski area needs to add $900,000 to the resort’s bottom line by the end of April, which means cutting around $14,000 in expenses per day at the ski area 25 miles from Durango. So Purgatory has plugged in full-time workers and sent seasonal workers — many of them J-1 visa workers — back home. Lift mechanics and managers are running chairlifts, working in restaurants and parking cars.

“I know this is a shock but it shouldn’t be a surprise,” reads one email forwarded to The Sun. “We’ve all seen the writing on the wall. This is the world we must live in now to create the world we want to live in later.”

It’s common for resorts to take office workers and managers and put them to work in restaurants, parking lots and at chairlifts during busy weeks.  

“It not only helps you be more efficient from a labor expense standpoint, but it gets people out to interact with guests to really see what it means to be a ticket checker or a person bussing a table,” Rathbun said. “People have embraced it.”

Coleman — who bought the 1,625-acre Durango Mountain Resort in 2015 and revived its previous name — dismissed the online chatter about a pending bankruptcy or sale to a competitor. The snowfall has been challenging this winter at Purgatory  — with about 146 inches of snow so far at a ski area that typically gets 260 inches. The cost-cutting, he said, is part of “complex and complicated finances … that are being twisted by people who have no real understanding of the economics of skiing.”

“We are refinancing our loan and trying to maximize the success of that refinance. If we miss this year to refi we have to wait five more years and we do not want to do that. We want to make sure we get this done now,” Coleman said in an interview with The Sun. “Don’t believe all the rumors. Purg is not for sale. I’ll tell you this, this is not even close to the hardest season we have dealt with.”

Mountain Capital’s financial engine stalled by “regulatory environment”

Coleman was raised in Texas and bought his first ski area — Sipapu Ski and Summer Resort in New Mexico — in 2000. In 2015, his investment team acquired Arizona’s Snowbowl and New Mexico’s Pajarito Mountain, seeding his Mountain Capital Partners business with four ski resorts. He and his family have lived in Durango since the early 2000s.

Coleman’s Durango-based Mountain Capital Partners now owns and manages 16 resorts, including ski areas and golf courses in Arizona, Colorado, Nevada, New Mexico, Oregon, Utah and Chile. Coleman’s company has taken a page from the Vail Resorts Epic Pass playbook, with a $1,349 season pass good for unlimited skiing at eight ski areas. And the company has invested more than $15 million into its resorts in the past decade.

The company’s most recent acquisitions — Valle Nevado and La Parma in the Chilean Andes — “are freaking incredible,” said Coleman, who employs more than 6,700 workers every year, a majority of them seasonal. 

Coleman has endured challenges before. He closed Ski Hesperus outside Durango in 2023, after the irreplaceable gearbox broke in the 1962 Riblet chairlift at the 60-acre ski hill he acquired in 2016. The ski area has struggled to secure water for snowmaking and replacing the lift without snowmaking “doesn’t really make sense,” Coleman said. 

“But we are working on making Hesperus happen,” he said of the ski area 10 miles west of Durango. 

Last year a fire destroyed the lodge at Nordic Valley in Utah, which Mountain Capital Partners acquired in 2018. The 37-acre Elk Ridge ski area has not opened since the company acquired the community-focused hill in Flagstaff, Arizona in 2017. But Mountain Capital Partners has revived the dormant Sandia Peak in New Mexico and repaired long idled chairlifts at other ski areas. 

Last year the company started offering deeply discounted single-day lift tickets for advance purchasers, another page from the Epic Pass playbook. But with a dynamic pricing twist: a Purgatory ticket could get as low as $10 for early purchasers buying on low-traffic weekdays, like in early December. 

“It’s hard to be an independent these days,” said Coleman, who refuses to compete with Vail Resorts and Alterra Mountain Co. when it comes to expanding and buying a new ski area. 

“If they are in the mix for an acquisition we are pretty much out. They pay too much,” he said, repeating an often-heard line from independent ski area owners who value ski areas well below what Vail Resorts and Alterra Mountain Co. are willing to pay to add resorts to their growing stables.

Coleman said Purgatory is fine and the latest cost-cutting has to do with appeasing wary lenders. He said “the federal regulatory environment … is the biggest impediment to lending right now.” 

“The local bank here has a huge file on me and has been lending me money for 20 years,” he said. “I ask for a loan and they say we can’t do loans like that anymore because of our regulators. I’ve never defaulted on a loan. If I come with an opportunity you should take it. I’m a no-risk loan. But they say they will get in trouble with the feds if they issue me a new loan. So that’s where we are right now.”

Purgatory workers are unsettled in the turbulent belt-tightening. A 7-year-old boy in ski school was injured Sunday after falling 35 feet from the ski area’s Purgatory Village Express six-person chairlift. The boy was flown by helicopter to a Denver hospital. His condition is unknown. 

“It was a very busy day and there was only one lifty working,” said an employee of the ski area who worked Sunday and asked not be named for fear of being fired. “This just speaks to how overwhelmed all the employees are.”