Steaniboat. SKI RESORT CORPORATION Response to Request for Proposal - Howelsen Hill Ski Area - Operations and Management Date: March 6, 2017 To: City of Steamboat Springs Re: Howelsen Hill Ski Area Operations and Management Request for Proposal From: Steamboat Ski & Resort Corporation The following constitutes the response and proposal of Steamboat Ski & Resort Corporation (SSRC) to the Howelsen Hill Ski Area Operations and Management Request for Proposal (RFP), issued earlier this year. We believe that SSRC is the best suited and most qualified organization to work collaboratively with the City and the Steamboat Springs Winter Sports Club (SSWSC) to manage and operate the Howelsen Hill Ski Area going forward. As you will see our proposal is that we spend the next several months working collaboratively with the City and SSWSC to see if mutual agreements can be reached which would allow SSRC to undertake the operation and management of Howelsen Hill commencing. with the 2017-18 ski season, for the foreseeable future in a way that meets the City’s goals as set forth in the RFP. At the outset, we are aware that this proposal does not provide all of the information requested as set forth in Section III A of the RFP, although we have tried to provide what we can at this time. There are a number of reasons for this which we address below, including, among other things, the need to conduct considerable additional due diligence, particularly with respect to current financial information and projected future costs and the need to better understand the relative positions of SSWSC and the City with respect to the Joint Use Agreement, which we believe can only be determined through discussions and negotiations. SSRC has a proven track record in successfully operating a world class resort for many decades and can bring that expertise to Howelsen Hill. As SSRC is a subsidiary of a publicly traded company we do not provide non-consolidated financial statements, but only those available in intrawest’s SEC filings which are available under the symbol SNOW. SSRC would easily satisfy the insurance requirements in the RFP. Many of the specific requirements of the RFP suggest a detailed plan to be submitted as of this date, however we believe the best approach in this situation is to develop a five year initial strategy together with the City and SSWSC during the period from now until September 1, 2017, which is the date by which agreements would have to be completed in order for SSRC to take over the facility prior to the 2017-18 ski season. If successful negotiations were to be completed during that time period, SSRC would then take over Operations and Management of the Howelsen Hill Ski Area beginning with the 2017-18 ski season. This will require the execution of definitive agreements (without which there can be no binding agreement by SSRC), and Intrawest corporate approvals. SSRC in doing so would be willing tocommit to an initial five (5) year term in Operations and Management with at least two options for renewal We believe an initial five year plan would begin with stabilization and development of efficiencies, followed by development of growth initiatives. The speed at which each of these phases would occur will depend entirely on what we learn along the way and the ability to collaborate with SSWSC and the City in doing so. Stabilization would immediately include SSRC direct and total oversight of operations and management. We believe we can improve the Howelsen Hill Ski Area operations with industry accepted practices in safety, legal, human resources, finance, snowmaking/grooming, lift operations/maintenance, skier services and marketing/sales. Development of efficiencies would be established as the current operating state becomes clear and those efficiencies could be put in to action. It is not clear at this point if stabilization and/or efficiencies will create initial savings or potentially require a higher cost, however we believe the best approach is for SSRC to operate the Ski Area at its costs initially, with any savings against current City subsidy to be shared by SSRC and the City along the lines of a 75/25 split to SSRC/City with an established sliding scale as costs are reduced and/or moved in to a profitable state. Those initial costs would be Operating Expenditures (OPEX) only and any Capital Expenditures (CAPEX) would be at the expense of the City as currently budgeted or contemplated including issues related to moving soils, chairlift safety, etc. ‘As we move in to the development of growth initiatives, we believe a long range Capital Master Plan and funding mechanism(s) must be established, This can include annual appropriations by the City and other sources as may be developed collaboratively by SSRC, the City and SSWSC. SSRC is willing to invest considerable time, energy and expertise to develop ways to grow the business and will share in that ‘growth cooperatively with the City. SSWSC has expressed its willingness to be partners in this endeavor and we believe bringing them to the table is essential and clearly in the best interest of all parties involved. In doing so, SSRC and SSWSC would work to re-establish appropriate rights and responsibilities with the City under a new Joint Use Agreement. (See letter of support attached to the Proposal as Exhibit A) Growth opportunities come in many forms and these would be explored with the City, SSWSC together with SSRC in their development over time. Initial marketing/sales initiatives can have an immediate impact on sales by cross promoting our two ski areas. Further development of Food/Beverage opportunities, including our interest in operating current concessions at the Rodeo grounds, the ballfield concessions and Olympian hall beginning immediately, can be established. Summer operations, activities development, weddings, groups, events, retail/rental and a return to winter tubing operations ‘are amongst the initial ideas that SSRC has great experience in operating, SSRC would put in place a Director for onsite daily management and all staff would be employees of 'SSRC. Ultimate oversight will come from the current SSRC Executive team.The current SSRC team that would have oversight is as follows: Rob Perlman ~ President/Chief Operating Officer rperiman@steamboat.com 970-871-5400 Jim Schneider — Vice President Skier Services ischneider@steamboat.com 970-871-5381 Katie Brown — Vice President Marketing/sales Kbown@steamboat.com 970-871-5486 ‘Trish Sullivan Vice President Human Resources tsul steamboat.com 970-871-5131 Kelly Keefer ~ Vice President Finance/IT kkeefer@steamboat.com 970-871-5101 John Maas ~ Corporate Legal Counsel imaas@steamboat.com 970-871-5147 In conclusion, we are very interested in seeing whether we could help the City and the citizens of ‘Steamboat Springs by operating the historic Howelsen Hill Ski Area for the foreseeable future and look forward to your response to our proposal. Respectfully submitted, Ws Rob Perlman President/COO Jebam sim Schneider Vice President Skier Services