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The town of Nederland’s bold plan to borrow more than $200 million to buy Eldora ski area is faltering as interest rates climb and prospective creditors question the town’s ability to handle the debt burden.
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This story first appeared in The Outsider, the premium outdoor newsletter by Jason Blevins.
In it, he covers the industry from the inside out, plus the fun side of being outdoors in our beautiful state.
As the town of 1,500 nears the two-year mark in its effort to buy the Boulder County ski area from resort operator Powdr, its ability to finance the $120 million purchase — plus more than $100 million for capital projects and reserves — has drawn scrutiny from lenders. And to prove its viability, the town, with an annual budget around $3 million, is asking for $20 million in donations.
Nederland’s initial plan, which is evolving, was to establish an enterprise fund — essentially a government-run business — with revenues from the ski area paying down the debt. The town’s board of trustees in January approved a $120 million purchase and as much as $225 million in bonded debt.
“One of the biggest challenges we have resolved is giving bond investors confidence that the bonds will be repaid,” Nederland Mayor Nichole Sterling said in an open letter to her community Sept. 30, which marks the first official update on the acquisition plan in several months. “The revenues from the resort are the primary source of repayment.”
The buyers of municipal bonds want strong assets to back up the debt and they want less debt for the ski area, Sterling said. And since the town first began weighing its one-of-a-kind plan to buy the 680-acre Eldora, interest rates have climbed by about 1% to 8.5%, adding to the cost of borrowed money.
Bond buyers also asked the town “to more aggressively model poor snow years” and share last season’s financials, when the weakest snowfall in half a century triggered the steepest annual decline in ski visits to Colorado in more than 40 years, Sterling wrote.
The new plan for Nederland involves a sale lease-back, with revenue bonds paying Powdr for the 700-worker ski area.
“We are essentially setting up a blueprint for other municipalities to follow in our footsteps, but it takes someone taking the first step,” Sterling wrote.
The new plan also calls for reduced debt, leading to the call for $20 million in donations to help “jump-start” capital projects the town planned for the ski area, Sterling said.
Those investments include plans to upgrade the Corona lift, which accesses expert terrain, as well as launching the planned 62-acre Jolly Jug expansion, which will include a new chairlift accessing beginner and intermediate terrain. If Nederland is forced to choose between those two projects, it will represent a core dilemma in the resort industry: paying for beginner slopes to grow the sport or adding expert terrain to keep the pass-buying skiers happy.
By funding capital improvements with donations, “we give Eldora considerably more flexibility” by not tying investment in new projects to debt financing, Sterling wrote, calling the donation plan “a much more resilient structure.”
In an Oct. 5 online update, the town said owning Eldora “means Nederland can align programming to Nederland values, pursue grant money private owners can’t touch, and keep every dollar of excess profit working for the community.”
Purchase agreement has expired
The town is asking the state for help, saying that state support could help the town improve the region’s economy. Right now, the town is on the hook for $2.5 million if it is unable to close its deal with Powdr. The town’s initial purchase agreement with Powdr expired at the end of April. The town’s most recent updates indicate it has spent $1.15 million on acquisition costs, including attorneys, underwriters and an evaluation by resort planning firm SE Group.
A spokesperson for the company declined to comment on the deal. Utah-based Powdr, which owns Copper Mountain, announced plans to sell Eldora and Mount Bachelor in Oregon in 2024. The company, which is owned by billionaire John Cumming, who keeps a low profile, nixed its plan in 2025 to sell Mount Bachelor.
The Nederland acquisition process, while bold and disruptive for a consolidating resort industry, has not been smooth. A group of resort and tourism industry veterans the town initially enlisted to help manage Eldora — they called themselves 303 Ski — never took shape. A principal architect of the plan, town manager Jonathan Cain, left this month for a manager position with Lakewood after a little more than a year on the job.
If the sale happens, the plan is for Powdr to manage the ski area for two years before the town takes over operations. The town said it is working with the Forest Service on a new special-use permit to operate the ski area on federal land. Powdr also has an agreement with Alterra Mountain Co. — which pays Powdr an undisclosed fee for every visit by an Ikon passholder — that will need to be renegotiated if Nederland buys the ski hill.
“We’re excited to continue that partnership,” reads the Oct. 5 update from the town.
Sterling, in her letter, said the town’s financial modeling “shows the mountain has the ability to service its required debt, fund ongoing maintenance, maintain reserves and create capacity for future investment.”
Junk bonds to start
The town’s plan suggests that excess revenues from ski operations could fund projects in the town. The first decade of ownership, Sterling said, would be challenging because the debt burden would be high. As the debt is reduced, she wrote, “significantly more” revenue from ski operations would be freed up for improvements and “long-term stewardship of the asset.”
The Nederland plan is for its Mountain Recreation Enterprise to issue up to $225 million in bonds without a credit rating, or junk bonds, that offer high-interest rates to investors in exchange for increased risk of default.
“This financing is unique for the municipal bond market, and without an operating history, the town is not able to obtain an investment-grade credit rating,” reads the Oct. 5 update, which notes the town could at a later date refinance its debt with a credit rating.
Powdr could eventually grow weary of Nederland’s struggle to find financing and cancel the deal. It could extend the expired purchase agreement. Or it could just wait.
Vivek Sah is the director of the Franklin L. Burns School of Real Estate and Construction Management at the University of Denver. He has closely watched the growing municipal bond market as more communities seek outside funding for infrastructure and improvements.
He said the growth in the municipal bond market is more of a challenge for Nederland than the town’s plan to pay back investors with revenues from the ski area.
“Because of this increase in bonds and more of these being issued, there is a risk of oversupply,” Sah said. “The number of these issuances is going up in Colorado and across the country at the same time you are going back to the same pool of investors and there is only so much appetite. When there are so many of these on the market, investors get to pick and choose and someone will end up losing.”
A booming municipal bond market
Community ownership of ski areas has grown more appealing as corporate behemoths Vail Resorts and Alterra Mountain Co. battle for dominance. (The two Colorado-based operators are facing lawsuits from skiers arguing they are illegally collaborating in their pursuit to control the country’s ski resort industry.)
Steamboat Springs has owned Howelsen Hill since the late 1930s. Lake County has owned Ski Cooper since the 1940s. Silverton revived its Kendall Mountain ski area in the 1990s. Durango, Gunnison, Lake City and Ouray run small community ski hills. The city of Denver has partnered with Alterra Mountain Co. to run the city-owned Winter Park ski area.
And municipal bonds remain a vital tool for Colorado — and really national communities. The town of Vail and Gunnison County both have used municipal bonds in recent years to pay for housing. Nationwide, borrowing in the municipal bond market topped , up 13% from the previous record in 2024.
Vail issued $126 million in housing revenue bonds to build the $189 million 268-unit Southface worker housing community. The town put its valley-floor golf course and the course clubhouse up as collateral for .
Last month Moody’s rated Vail’s municipal bonds an AAA rating, saying the town maintains “a strong financial position.” Moody’s rated the 4,700-resident town’s certificates of participation bonds down one notch, at “AA1.”
The town of Vail’s total debt is close to $228 million and its budgeted revenue for 2026 is $142 million. Debt at 162% of annual revenues is high for small towns in Colorado, “but in line with national peers,” Moody’s wrote in its Sept. 15 rating action.
Not all bond sales work as planned though. The city of Broomfield in 2006 opened its $45 million Broomfield Events Center, financed with $59.8 million in municipal bonds. The city tore down the event center — which was branded as the 1stBank Center — in 2024 and the Broomfield Urban Renewal Authority still owes $34.2 million to bondholders. When the renewal authority finishes paying off the bonds in the next few years, it will have paid $135 million in principal and interest payments.
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