6.30.2005

Jerry speaks

Tram Update

As you can imagine since sharing the news about the tram we have received lots of feedback locally and nationally. I wanted to share some insight to that and help keep you all informed. We are committed to the best communication possible with this, but bear with us and try not to jump too far down the road when we are still in the starting blocks. I know it is easy to speculate ways this will impact us (what about snow control?, how will this effect pass prices? will Rendezvous Bowl remain open for skiing?), but please be patient while we work this out. We do not have all the answers but the information below will hopefully help you understand why that is the case. Believe me, we have made the right decision and there will be an ultimate solution, the tram and Rendezvous Mountain are too important for that not to happen.

Here are the key points:

* We will be retiring the tram at the end of Summer 06.

* The decision to close the tram was made following 18 mths of unprecedented evaluation into tram operations by leading industry engineers.

* In simple terms we were presented with the following prognosis:
1. The cost of major component replacements would be multi-millions and would not guarantee us longevity.
2. The tram is currently operating to code and it will do so for multiple years. However the tram is approaching the end of its effective useful life. Ultimately safety questions would become part of the equation.

The results required us to make a decision regarding on-going tram operations. Eliminating any SAFETY concerns was the driving force behind this decision. The Kemmerers decided to be proactive and not allow the tram to operate for an indefinite period that might lead to safety concerns.

JHMR cannot afford to replace the tram on our own – you know we have not made money a majority of the years that the Kemmerer’s have owned the Resort. The Kemmerers have chosen to invest $55 million to reestablish the Jackson Hole name and make this company what it is today. Expecting our company to pay for a new tram ($20 +/- million) is simply unrealistic.

The Kemmerers and the Board has determined that without assistance (from State or other resources) we should concentrate on evaluating other alternatives to access Rendezvous Bowl and the exciting terrain from the summit.

This was a very tough decision. Please understand it was not taken lightly and we know it will affect all of us over the next few years, but JHMR is committed to seeing this through.

JHMR will continue with its other capital improvements such as Sweetwater lift, restaurant at the top of Bridger, Bridger Center remodel. These have been planned for a long time and are part of our long term strategy. It does not make sense to put these on hold while we work out the solution to the tram. Both can continue in on a parallel course to an even better resort.

Here is the strategy for the next twelve months:

1, We have hired Sno-Engineering to present alternative lift solutions.

2. We will start a dialogue with local businesses, stakeholders and State Reps to explore possible funding strategies if the Tram is to be replaced.

3. We will market this winter with a sense of urgency to come and be part of this tram, while we look towards the future with improved service and facilities to serve all our guests.

So with that in mind, what else do we know?

We ARE going to work towards a lift or series of lifts to the top of Rendezvous Mountain. There will likely be at least five years when lift access to the top will not be in place.

We will operate during the years without lift access to the top of Rendezvous in a safe fashion.

We are optimistic that we will start a dialogue with State and Federal officials regarding an opportunity to reach out and be part of a comprehensive state wide tourism strategy. The original tram was 2/3 funded by Federal money. Nearly $1m (of an original $1.6m budget) came from a government program that loaned funds to seasonal communities.

If you have any questions that arise as part of discussions in the community feel free to call me or Anna Olson

Best regards

Jerry

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