Greetings Massanutten Area Residents & MPOA members:
My name is Garrett Smith. I serve as General Counsel to Massanutten Resort and its various entities. Matthias Smith (no relation), the Resort’s vice president and general manager, asked me to outline some of the various entities involved in our operations.
For an overview of how we do business, the starting point is The Resorts Companies, Inc. (TRC) which owns 100% of the shares in the various business entities that comprise Massanutten Resort. While TRC holds the stock and ownership interests in our operating entities, 100% of its own shares are held by approximately 3,500 people who are or were employed by the operating entities.
Roughly 14.5 percent of our active employees live within Massanutten’s zip code. A total of 73 percent of ESOP owners including former employees live in Harrisonburg and/or Rockingham County; 84% live within 50 miles of the Resort, and only 16% live out of state.
Through the ESOP, all of our employees receive annual allocations of company stock, which begins to vest after their second year as members of the team. These retirement account allocations are significantly more generous than 401K and other retirement plans, but in most cases, the ESOP ownership is the sole source of our employees’ retirement savings. No single employee owns even 1% of the Company’s stock.
An interesting result of this arrangement is that our employees and shareholders are not adverse when our management acts in the financial interest of its shareholders – because the shareholders are the employees.
Our original business entity was Great Eastern Resort Corp. (Great Eastern), which is our real estate development business. Great Eastern acquired most of our 6000+ acres around Massanutten mountain from Dice Hammer and Jim Lambert’s partnership. It also inherited the role of Massanutten’s original 1970’s developer, Massanutten Development Company (MDC), and its successors – Massanutten Village, Inc., and First Federal Corp. Of significance, MDC was the developer that formed MPOA, and then in 1978 conveyed to it the Massanutten roads and common areas while reserving perpetual development easements for itself.
MDC’s successor, First Federal, then entered into a Contract Fixing Rights and Responsibilities between itself and MPOA in 1982. Great Eastern entered into additional agreements in 1985, 1989, 1994 and 2013. As the prior developers’ successor, Great Eastern acquired their rights and duties as developer or declarant under the various covenants and restrictions governing the land areas on the mountain.
Presently, Great Eastern’s primary role is to develop, finance, and sell Massanutten Resort’s timeshare projects.
The second oldest and largest of our business entities is Great Eastern Resort Management, Inc. (GEM). GEM is responsible for most day-to-day Resort operations – including hospitality functions and operation of most of our amenities (most notably our winter sports operations, golf courses, and Family Adventure Park). GEM also serves as managing agent of the five timeshare owners’ associations that timeshare customers automatically join when they purchase, exactly as lot owners join MPOA when they purchase a residence. (GEM works closely with MVOA in a variety of ways, but is not the managing agent of that timeshare owners’ association.)
The three GEM-managed associations inside The Kettle are Shenandoah Villas, Eagle Trace, and Summit. GEM handles reservations, check-in and check-out, housekeeping, maintenance, and a wide range of duties for them. It also collects their assessments, pays their bills, and manages their finances.
This role included administering the relationships with MPOA under which these three associations voluntarily contributed payments in the amount of unit assessments. Whenever MPOA asked them to become permanent members, GEM would decline and reserve the right to withdraw. This relationship will be covered in more detail in the future.
Our company also owns a number of smaller business units. The waterpark is owned by a separate limited liability subsidiary and employs its own staff. Likewise, Peak Construction, Co., Inc. (our builder) and Great Eastern Purveyors, Inc. (which runs our restaurants and food services) have their own employees. But all employees fully participate in our ESOP ownership.
Hopefully, this gives you a better understanding of our structure. In future messages, we’ll provide more detail on the issues as we see them.
Cordially,
Garrett Smith, General Counsel, The Resort Companies
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