Lutsen Mountains bets big that skiing in Minnesota stays hot

The big buzz in the Minnesota downhill ski community this year has been the acquisition of Afton Alps, one of the Twin Cities' most popular ski hubs, by Colorado-based Vail Resorts.

Vail, which acquired Afton and a ski area outside Detroit for a combined $20 million, tries to increase business for its Rocky Mountain resorts by whetting the appetites for a Colorado ski vacation by beginners and veterans at one-day ski destinations such as Afton.

Meanwhile, the owners of Lutsen Mountains near Grand Marais, Minn., about four hours north of the Twin Cities, say their competition isn't other Minnesota resorts — it's Colorado.

Co-owners Charles Skinner and Tom Rider, relatives and lawyers whose family has owned 120-year-old Lutsen Mountains since the 1980s, quietly have invested about $20 million in equity and borrowed money to help convince Minnesota skiers that their Sawtooth Mountain runs above Lake Superior offer a compelling — and lower-cost — ski vacation.

Underscoring that argument is a new ski lift, a new gondola and 42 "snow guns" that double the resort's snow-making capacity.

"We feel we are the best ski area in the Midwest," said Skinner. "We don't have every attribute of every Rocky Mountain and European ski run, with longer runs. But we've got a new high-speed lift that's a three-minute ride up Lutsen Mountain instead of a 10- or 12-minute ride. And we've got 100 runs and great scenery.

"Our competition is a [higher-cost] family vacation to Florida or a ski trip out West. We think we offer great value without compromising on skiing, scenery, music and other night life in the area."

And Lutsen Mountains, an $8 million-revenue business with about 80 employees who work the ski hills and resort facilities, is the nexus for the Cook County ski scene.

Traffic has returned to prerecession levels. The average Lutsen skier stays 2.5 nights and spends an average of $350 per day on food, lodging and other goods and services in the area.

And Skinner has projected to his very interested banker that the investments in Lutsen Mountains will move from about 83,000 ski-visit days last winter to about 125,000 by 2022.

There's a lot of winter capacity at nearby resorts that supply skiers to Lutsen Mountains.

And Skinner is trying to take advantage of an overall decline in ski resorts nationally, from 740 to 471 over the last generation as many small, thinly capitalized resorts closed.

The ancient Sawtooth Mountains that rise 1,000 feet above the north shore of Lake Superior obviously are not the Rockies. But the scenery is still breathtaking and the runs are challenging and fun.

John Olson, vice president of trips at Midwest Ski Council, considers Lutsen Mountains a premier Midwest ski location. He said he's taking 170 skiers to Lutsen in December instead of Indian Head, which is a farther drive to the Upper Peninsula of Michigan.

He personally plans to ski Colorado this season, thanks to a $200 round-trip airfare he scored well in advance and a good deal he found at Keystone resort. But he doesn't dispute that, generally, it's a lot less time and expense to get to Lutsen. And the experience is improving.

Olson noted that Vail was smart to buy Afton, which is a popular day-trip ski destination for Twin Cities skiers. And Vail, which is investing an additional $10 million in Afton, is promoting Colorado as the next step for Minnesota skiers.

Lutsen's Skinner concedes nothing but longer runs to Colorado. And he points to snowshoeing, cross-country skiing and other activities in the Lutsen neighborhood as enticements.

After years of pulling water from the nearby Poplar River, a popular trout stream, Lutsen-area water users and environmentalists signed off on an alternative proposed by Gov. Mark Dayton that was passed by the Legislature and signed into law.

The water users, including the local fire department, are building a $4.8 million water supply system that pipes water from Lake Superior. The state provided about $3.6 million in state financing.