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Mountain News: Madoff sticks a pin in Aspen finances

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Exclusivity was key to lure of Madoff's scheme
ASPEN, Colo. - A woman has started sewing together 7-inch voodoo dolls of Bernard Madoff, with the intent of selling them for $15 each. The Aspen Times says that Rosemary Ranck hasn't actually sold any.

But in Aspen, she has plenty of people with cause to be cranky: some 50 people and entities with Aspen-area addresses appeared on a list of thousands made public in a U.S. Bankruptcy Court filing in early February.

Nine people from Vail and the Eagle Valley showed up on the list, as did several more from Crested Butte, Steamboat Springs and Jackson Hole. Not included are second-home owners whose primary addresses are elsewhere.

After talking with local asset managers and lawyers, Fortune Magazine in December estimated that families in Aspen had collectively lost upward of $1 billion. As a cluster of victims, it is second only to Palm Beach, Fla.

Non-profits in Aspen are also expected to be hit hard by the toppling of Madoff's pyramid scheme. The Aspen Institute, the local hospital, a local affiliate of National Public Radio and yet other causes were all identified as probable losers.

Fewer sweet notes are expected to be coming from the Aspen Music Festival this summer. The Aspen Daily News reported six couples and one individual who were identified as donors to the Aspen Music Festival were on the Madoff list. A list of festival donors in 2006 indicated each couple and the individual gave $100,000 or more.

As of early February, there was no evidence of cash-strapped Madoff investors jettisoning their homes except for that of New York real estate and publishing magnate Mortimer Zuckerman, who reportedly lost $30 million.

Why did so many normally bright, successful people give their fortunes to Madoff without investigating his legitimacy?

Wally Obermeyer, an investor advisor in Aspen, told the Rocky Mountain News that it was akin to "being invited to a prestigious country club and going into the kitchen to assess whether the place was clean."

It is, said Obermeyer, a "basic flaw in our makeup" to fall for something with an air of exclusivity.

"Most of these people are pretty astute," he said. "They wouldn't buy a Colorado ranch without having their attorney review it. They would ask whether it comes with water rights, but they would throw their live savings into Madoff without due diligence."

Jillian Livingston, writing in The Aspen Times, said investing with Madoff, as she had done, and her father had done for years before he died in 1997, was not greed. "Were we stupid for not diligently following the proper steps to check up on Madoff? We were following some of the most brilliant people in the world who had also invested with Madoff. We felt secure in doing the same."

In its December report, Fortune told about one very wealthy couple who had put their house on the market and moved in with their grown kids. Another story was of a guy who, sensing the coming recession, sold his expensive home in Aspen at the height of the market frenzy - and invested the proceeds with Madoff.

As for the voodoo dolls, the local dollmaker Ranck insists they are not to be taken seriously.

"It is supposed to be light and fun," she told The Aspen Times. "You know, I'm not chopping chickens' heads off anywhere."


Realty agents shuffle
ASPEN, Colo. - Real estate agents in Aspen have been busier than free agents in Major League Baseball during the last month, says The Aspen Times. The newspaper reports several agents have jumped ship, going to new firms.

While such peripatetic behavior is common among real estate agents, the jumping to and fro this year has been instigated by the shuttering of two major and long-tenured companies: Aspen Sotheby's International Reality and Coates, Reid and Waldron.

Robert Ritchie, a veteran of more than 30 years in Aspen real estate, told the newspaper that he believes several more firms could vanish during further consolidations.

However, Ritchie said he "probably" expects to see more activity in 2009 than in 2008, simply because the recession is forcing some owners to sell. Plus, for some, Aspen real estate looks to be a better investment than the stock market.


Realtor boards lose agents
STEAMBOAT SPRINGS, Colo. - The Steamboat Board of Realtors lost about 10 per cent of its members and now has 400 members.

Lori Thompson, president of the board, told the Steamboat Pilot & Today that Steamboat's decline is not unusual for the mountain resort markets. Telluride lost 20 per cent, the most of any mountain board, but most others had lost 10 to 15 per cent.

The newspaper also notes that many real estate agents made no sales last year, but still chose to pony up the $500 dues for another year with the Steamboat group.

Also, quoting David Baldinger, a real estate broker who studied sales statistics, the newspaper reports that top 75 real-estate agents in the Steamboat market accounted for 74 per cent of all dollar volume in 2008.

Looking at the statistics another way, two-thirds of agents were involved in at least one sale, but a third did not have a single sale.


Aspen to tax shopping bags
ASPEN, Colo. - A plan to impose a fee of between 5 and 25 cents per shopping bag has been approved in concept by the Aspen City Council. Details are being worked out, with the intent that it will become a model ordinance that other towns might want to adopt.

Aspen's Community Office of Resource Efficiency, a non-profit group with strong ties to local government, proposed the fee as a way to prod consumers. A voluntary program, such as was promoted by the organization last summer, just isn't enough, CORE representative Nathan Ratledge told the council.

"The goal is not to create a burden, but just enough incentive to change habits, and we are looking for government support to change that habit," he said.

The Aspen Times explains that the fee, as currently proposed, would be imposed at high-volume stores, such as grocers, and perhaps some smaller retailers.

Ratledge says that a fee on plastic bags imposed in Ireland, along with an educational campaign, resulted in 90 per cent fewer plastic bags. He compared it to the cultural shift that makes it impolite in some places not to scoop your dog's poop.


Lodges to get upgrades
ASPEN, Colo. - Construction is forecast to slow down substantially in ski towns, but it won't come to a screeching halt.

Aspen's marquee hotel, The Little Nell, will get an $18 million remodel this summer, as energy efficiency measures are instituted and the 86 units are upgraded. The hotel is 20 years old.

The 235 residential units and 28 commercial units in the Village at Breckenridge will also be refurbished, although not until next year. The cost estimate is $19 million, although managers hope lower costs for labour, construction and financing will yield a 15 to 20 per cent price deduction.

Tony Wait, the general manager of the homeowners association at the project, said the five buildings had a "70s-type feel" that will be replaced by a theme described as "mountain elegance with historic features." In keeping with the times, there will be a "village" in all this.


Emanuel likes Park City
PARK CITY, Utah - So, where will the White House crowd hang out?
Jerry Ford famously liked Vail and then Beaver Creek. Bill Clinton tooted his saxophone in Vail before checking out Aspen and, several times, Jackson Hole.

George W. Bush pedaled a mountain bike at Idaho's Tamarack before that new resort, unable to secure a line of credit, fell on hard times.

Barack Obama, although not a skier, seems to like Park City, and stopped in a couple of times during his campaign. Now comes the news, courtesy of The New Yorker, that Rahm Emanuel, the chief of staff for Obama, spent his February vacation at Park City.

The New Yorker profile notes that Emanuel is a neat-freak, and even as a first-grader stuck around to clean up beyond the allotted time, according to a teacher's report card.

Emanuel is also profane. He lost part of a middle finger in a meat-slicing incident as a child, and the new president has said that it nearly made Emanuel mute.


Telluride to get a larger terminal
MONTROSE, Colo. -Telluride's air portal is getting upgraded this summer. Most travelers to Telluride fly to Montrose Regional Airport, whose terminal bursts at the seams during winter months. The Telluride Watch reports that $3 million - 95 per cent of it coming from federal and state funds - will be spent to expand the terminal. Lloyd Arnold, the airport's director of aviation, was careful to point out that the federal money does not come from taxes, but from fees upon airline travelers.


It's almost time for shorts
GRAND LAKE, Colo. - Last weekend was warm again in Grand Lake, the town located at the west entrance to Rocky Mountain National Park. Snow remains piled in front of the boardwalks, but the degree of melting was more typical of late March, even April.

"I almost wore my sandals this week," said the bartender in a local restaurant. "I put on shorts," said the cook.

December brought plenty of snow, and even a couple of 20 below readings. But cold has been the exception. The lake - after which the town is named - didn't even freeze until January. Snowplowers only had to work twice during February.

Of course, sometimes winter comes late. One year - it was St. Patrick's Day in 2003 - it snowed three feet in one day, said the bartender, so you never know for sure. But it could be a big fire season unless there's more moisture before summer, she added, before she went back to sweeping up peanut husks.


Lone lobo trots back
AVON, Colo. - Upon hearing news that a lone female wolf had been sighted somewhere north of Avon, the cry in some local households was, "Lefty is back!" However, some ranchers from an earlier era might well be squirming in their graves.

Lefty was a wolf who had hunted in the area between Eagle and the Flat Top Mountains early in the 20th century. The life and then killing of the wolf by a government trapper was told in melodramatic fashion by a popular writer of the time, Arthur Carhart, in collaboration with Stanley P. Young, of the U.S. Biological Survey, in a book called "The Last Stand of the Pack."

The federal government at the time had a policy of exterminating wolves and other large predators. The last known wolf in Colorado was killed in 1943.

"It is a big relief to us to know that "Old Lefty" is a thing of the past - for his track on the range meant he was back and on the job of cattle killing once again," wrote the stockmen of Burns Hole, an area along the Colorado River north of Eagle, in a 1921 letter.

"We breathe a sigh of keen satisfaction and fully realize the capture of 'Old Lefty' was truly a job for you Government men who study out these things and apply methods no ordinary amateur can touch," the stockmen continued.

The first confirmed re-entry was in 2004, when a male wolf from Yellowstone was killed about 35 miles west of Denver on Interstate 70. The most recent wolf originated in Montana, traveled through Yellowstone and then Utah before arriving in Colorado. A radio-collar allowed researchers to trace her journey. Unless she finds a male, she's almost certain to return to the greater Yellowstone area, say wildlife biologists.


Three wolves killed
BANFF, Alberta - Three wolves have been struck and killed this winter on the Trans-Canada Highway in Banff National Park. Park officials told the Rocky Mountain Outlook that the wolf was likely part of a pack that had downed a moose that had been seen standing in the middle of the Bow River looking frightened. Although much of the highway through Banff is fenced to keep wildlife off the pavement, portions of it are not.


Mining law needs reform
CRESTED BUTTE, Colo. - Gunnison County Commissioner Jim Starr, a resident of Crested Butte, testified before a Congressional subcommittee in late February about the need to reform the 1872 Mining Law.

Starr told the Crested Butte News that he intended to talk about the need to protect watersheds, the key argument by Crested Butte in its opposition to a proposed molybdenum mine located just outside the town's boundaries. The property was obtained for $5 per acre by a mining company under provisions of the long-cussed and discussed law.


Target signals interest in Eagle
EAGLE, Colo. - A developer who proposes a major shopping center at Eagle now has a letter of intent from Target, the big-box retailer.

The letter confirms that Target would be the 132,000-square-foot anchor tenant of a commercial development called Eagle River Station. The complex, as proposed, would have 552,000 square feet. Paul Witt, a spokesman for RED Development, said Target's letter of intent should generate interest from local, regional and national retailers.

However, Eagle has yet to approve the project, notes the Eagle Valley Enterprise. Major commercial development at the site, currently a hay field along Interstate 70, has been discussed for five years, with one project rejected by town voters.

The Target, if built, will be the third along I-70 in the mountains.


Energy carrots vs. sticks
JACKSON, Wyo. - The town of Jackson is trying to figure out its next steps in tamping down the use of fossil fuels that produce greenhouse gases. Does it offer carrots or threaten with sticks?

Like more than 800 other municipalities around the United States, Mayor Mark Barron several years ago signed the Mayors' Agreement on Climate Change, vowing a good effort to meet the Herculean goals of the Kyoto Protocol. That agreement obligates participating towns and cities to try to cut their greenhouse gas emissions 7 per cent as of 2012 as compared to 1990 levels.

Even in places that have not grown, that is a significant task. Making the task that much more onerous in most ski-based mountain towns is that they have grown significantly in population since 1990.


Obama could nudge hydro
GUNNISON, Colo. - President Obama last week talked about efforts to pass cap-and-trade legislation yet this year, in effect imposing a tax on the burning of fossil fuels.

If that happens, the electricity produced by burning coal will become somewhat more expensive, and the electricity gained from renewable sources will look that much less expensive.

In anticipation of such a shifting landscape for prices, local water and energy officials in the Gunnison Basin are investigating whether a 200-foot-high earth dam on the Taylor River built to hold back spring runoff for irrigation purposes later in the season can be retrofitted to generate electricity.

"It seems like a waste of a resource not to tap into hydropower there," said Mike Wells, chief executive of the Gunnison County Electric Association.

The Crested Butte News suggests $30,000 in local and state funds are being collected for the feasibility study.

For all its falling water and now its wind farms and solar panels, Colorado still gets the majority of its electricity from burning coal, about 70 per cent, and most of the rest from burning natural gas. Utah is even higher, with 85 per cent of electricity coming from coal, while Wyoming is at 97 per cent.

Well before the alarm about global warming Aspen in the 1990s began looking at ways to prune its purchases of coal-fired electricity. It subsequently paid for installation of a hydroelectric unit in the Ruedi Dam, located about 25 miles from Aspen.

Aspen city officials have also investigated the potential to install a hydroelectric component in the dam that creates Ridgway Reservoir, between Telluride and Montrose. However, the payback on that investment looks less attractive, according to Phil Overeynder, the director of public works.


Deadly as ever
SILVERTON, Colo. - For all our attention to avalanches nowadays, they took a greater toll in the early years of the mining frontier. A case in point is the story reprinted from an issue of the Silverton Standard 125 years ago. The victim had started a small slide on Kendall Mountain, and his body was found not more than 15 inches below the snow, with his hands barely covered. "The slide did not run more than 30 feet, and it is remarkable how a person could have been killed in it," said the report.


Light pollution not all bad
KETCHUM, Idaho - Ketchum, Sun Valley and Hailey, all located in the Big Wood River Valley, have each adopted regulations intended to put a lid on the growing glow that is lighting up the night ski, blotting out the stars. But in a letter published in the Idaho Mountain Express, Ketchum resident Robb Thomson says enough is enough. He attributes "numerous accidents and crimes" to the regulations that restrict light pollution and trespasses by requiring lights be directed downward. Cities have lights, or at least should have them, he insists.

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