An investment group appears poised to purchase Snö Mountain and extend new life to the bankrupt Scranton recreation complex.
"We have a deal in principle," said Charles Jefferson, a Montgomery County real estate developer who is an investor with Montage Mountain Resorts LP. "We are coming in to carry it over the finish line."
The investment group will rename the complex Montage, Mr. Jefferson said, and the partnership will spend more than $8 million to acquire the complex and make improvements.
The attraction was called Montage from its 1983 opening until 2006, when a Philadelphia-based investment group acquired it for $5.1 million from Lackawanna County and rechristened it Snö Mountain.
Montage Mountain Resorts, which unsuccessfully bid $4.5 million for the 440-acre skiing and water-park attraction at a Philadelphia bankruptcy auction in February, also includes at least one member of the Snö Mountain ownership group.
DFM Realty, an affiliate of National Penn Bank, a Reading-area institution which is owed more than $8.9 million on two mortgages issued to Snö Mountain's owners, bid $4.6 million at the auction and appeared in position to take over the facility.
Mr. Jefferson, though, recently surfaced as the front man for Montage Mountain Resorts. His Montgomery County development company, Jefferson-Werner, spearheaded the $23 million 2010 conversion of the Connell Building into a residential and commercial complex. The company last year invested $8.6 million to reconfigure the former Scranton Chamber of Commerce Building for similar purposes and renamed it 426, its Mulberry Street address.
After months of dispiriting developments affecting Snö Mountain since it filed for Chapter 11 bankruptcy protection in October in Philadelphia, the emergence of a takeover group including a successful Scranton redeveloper generates new hope for the recreation site.
"This is great news for the city and Northeastern Pennsylvania," Mayor Chris Doherty said. "Charlie Jefferson has demonstrated a true vision for the region and I am confident he will have the same success with Montage."
Mr. Jefferson's successful downtown redevelopment ventures herald a brighter outlook for the leisure attraction, said Austin Burke, president of the Greater Scranton Chamber of Commerce.
"I can't think of anyone I would more happily entrust the future of Montage to than Charlie Jefferson and his group," Mr. Burke said. "Look at the work he has done in Scranton. It is all first-class."
Several details of the takeover agreement, including the actual purchase price, need to be resolved, Mr. Jefferson said. The group hopes to close the deal the first week of May and open Snö Cove water park May 25.
Mr. Jefferson plans to meet with the Snö Mountain staff later this week.
"We are doing everything possible we can to make this a seamless transition and have a great water park opening in May," he said. "Montage is back. That is what is important."
Workers at Snö Mountain feel a sense of relief, general manager Mark Verrastro said.
"Everybody is extremely excited and we are looking forward to working with them," he said. "They know the area."
Ski operations at the complex ceased March 19. Its destiny seemed murky after National Penn emerged from the auction as top bidder and a closing date to transfer ownership of the property to the bank was anticipated by April 19, court files show.
The Snö Mountain investment group technically still owns the property, though all business decisions go through bankruptcy court and are executed by trustee Gary Seitz.
Montage Mountain Resorts, National Penn and the bankruptcy estate probably will file a joint motion in court spelling out the ownership transfer agreement, Mr. Seitz said.
The bank also would have to agree to extend a financing arrangement, which is scheduled to lapse at the end of March, Mr. Seitz said. The arrangement would keep the business open, provide for payment of employees and continue insurance coverage.
Snö Mountain was able to open for the ski season in December after Bankruptcy Judge Jean FitzSimon allowed the business to borrow up to $497,585 to continue operations through the bankruptcy case and use income to finance ongoing operations.
The financing was provided by Wynnewood Capital Partners, a Montgomery County investment group that had a $1.4 million ownership stake in Snö Mountain.
Edward Reitmeyer, managing partner at WCP Snö Mountain, a firm associated with Wynnewood, is among the investors in Montage Mountain Resorts, Mr. Jefferson said.
Finally, a court order could be issued amending or modifying the existing ruling rearranging the parties and the acquisition terms, Mr. Seitz said.
Catharine Bower, spokeswoman for National Penn, declined to comment.
The Snö Mountain group invested $15 million and installed new snow-making equipment, a terrain park and Snö Cove. It piled up more than $24 million in debt before seeking bankruptcy relief.
The facility has visible detriments, though, including decades-old ski lifts, trailers for rentals and ticket sales, an antiquated lodge and a deteriorating physical plant.
"There is a need to modernize the facilities or at least clean them up," Mr. Jefferson said, as he toured the facility on Monday. "We're bringing back something that had better days. People need to feel as though they are getting value here. It's a real simple thing."
Charles Jefferson Biography
Charles Jefferson's Scranton ties go back to childhood.
Mr. Jefferson, 47, of Montgomery County, spent time in the city in his youth at the home of his maternal grandmother, the late Catherine Rabel.
A native of Philadelphia, he earned a bachelor's degree in marketing and a master's degree in finance from Temple University. He began his career as a manager at ServiceMaster, the Memphis-based cleaning and restoration conglomerate whose companies include TruGreen, a lawn-maintenance company, and Terminix, a pest-control service.
He later was director of the real estate subsidiary at Drexel University in Philadelphia and held management positions at a Philadelphia residential redevelopment company and a Philadelphia-based student housing development business.
He established Jefferson-Werner in 2007. The company also has been involved in urban redevelopment residential work at Franklin & Marshall College in Lancaster and the construction of a student housing complex in Durham, N.C.
Contact the writer: jhaggerty@timesshamrock.com