Photo by Sports Illustrated
Sue Smith, Mary Sargent, Pres Smith and Joe Sargent smile
together on the slopes in the early days of Killington. The photo
illustrates how young they looked when Mort Lund did a piece called
the "Killington Kids."
Author's note: Joe Sargent, a co-founder of
Killington, passed away last week. To understand his tremendous
legacy to skiing, one needs to go back in history. In talking with
Joe in the late 1980s and again in 2008, I learned much about how
and why Killington became the East's most successful ski
resort.
But more than that, I learned about how a man with a passion
for skiing was guided by his principles and caring for the welfare
of others as well as by a tremendous sense of responsibility and
fiduciary duty.
To convey that to you so that you might understand how he
made such a difference, not just to Killington but to the Vermont
and U.S. ski industry, we're going back in time thanks to the
earlier interviews.
The Sargent-Smith Connection
"If you want to do the project on a shoestring, come back and we'll
talk," Joe Sargent told young dreamer Preston Leete Smith in
1955.
"Well, no thank you," Smith had replied as he walked away.
Three months later, he was back.
When Pres Smith investigated Killington and decided it would
make a great place to develop a ski area, he went looking for
investors. Although he had no money, he did have a vision and he
had done his homework, coming to the realization before he started
that "Skiing would be 600 feet higher than the lift on Mansfield"
and "Killington would be bigger than Stowe if I made it."
Short on credibility but long on enthusiasm, Smith knocked on
doors in Boston and New York, looking for investors. He was turned
away. Finally, in August 1955 a friend in Hartford (CT) arranged
for Smith to visit a group of businessmen.
That Hartford meeting didn't work out at first. After Smith's
enthusiastic presentation, the insurance executives present had
turned to a young Joseph D. Sargent and asked his opinion. Due to
his considerable ski experience, Sargent had been invited to the
meeting in place of his boss. But he had bluntly told them, "If
you're trying to start a business, it's not the way to go about
it."
Sargent, who at twenty-six was a year older than Smith, had also
grown up in West Hartford, but the two had not met before. Sargent
had just married in June and didn't have much money to invest in
such a venture. While he was interested in the project, he thought
that the plans that Smith had developed "for a million dollar ski
area with three mountains with lifts and a cabin car were
grandiose" and he had told Smith so.
"After the meeting with the big wigs, the movers and shakers of
the Hartford financial community with whom I was thrilled to be in
the same room, I talked with Pres alone," Sargent recalled. "Pres
asked if I was interested and I said, 'No,'"
"Why not?" Smith had prodded.
"Because it is a colossal enterprise. It's a $100,000 deal and
way beyond my means. I told him, 'if you want to do it on a
shoestring, come back and we'll talk.'"
"To Pres, $100,000 was the shoestring!" Sargent said.
Sargent was an avid skier and outdoorsman. While still in
college in the late 1940s and early 1950s, he worked as a ski
patrolman at Stowe. He also patrolled at Mohawk (CT) where he met
the area's visionary founder Walter Schoenknecht.
After graduation Sargent entered the service, but broke his leg
while skiing and was granted an honorable discharge. He then went
to work in Hartford for Conning and Company as an investor/analyst
and soon became a general partner (and eventually CEO and Chairman
of the Board). It was at Conning and Company, an investment
research firm and member of the New York Stock Exchange
specializing in advising insurance companies on investments, that
Sargent honed his analytical and financial skills.
When Schoenknecht began Mount Snow in the early 1950s, Sargent
informally discussed business details including securities
regulations with him, and also helped out by clearing brush from
the ski trails. During the winter he patrolled at Mount Snow, which
had opened in December 1954. Sargent also used his "life savings of
$2,000 to purchase two shares of Mount Snow stock," he
remembered.
Sargent called Schoenknecht "an interest generator." But from
his point of view, "there was a missing piece at Mount Snow - the
all-important financial means and strategy." As a stockholder,
Sargent could see from the financial reports that the area wasn't
earning sufficient returns to finance expansion.
It was that concern that Sargent brought to bear on the Hartford
meeting. Although he recognized the value of the vision Smith had
presented, he was also convinced of the importance of having "all
the pieces of the pie fit together in order for the project to
succeed," he said.
Sargent knew that he didn't have the money to back a big,
three-mountain complex complete with European cabin lift. However,
he was interested, and he thought the project feasible if a company
with stockholders was formed and if the plans were scaled down for
the first year.
In October of 1955, Smith returned to see Sargent. In talking
with him, Sargent sensed a kindred spirit and a similar desire to
have the ski area run as a profitable operation. Sargent agreed to
talk to friends in Hartford, and he also gave Smith the names of
potential investors.
One of them was Joseph Van Vleck, III. Also a graduate of Yale,
he was in the investment department of the Travelers Insurance
Company. He accompanied Smith and Sargent on a November exploration
of the mountain. They walked the mountain over and over and began
to talk and to plan.
Sargent liked the geographical location of Killington, finding
the proximity and accessibility to metropolitan areas a definite
plus. In addition, he and Smith seemed a "good fit." They thought
similarly, shared a bond in the love of skiing, and respected each
other's strengths.
Deciding to throw his lot in with Smith, the first corporate
long-range planning session followed in Hartford in December 1955.
Some "weighty conclusions" were scribbled on the back of an
envelope, including the idea of paying Smith $70 a week or about 80
cents an hour for his work. (Actually, he wasn't paid until much
later.)
With Van Vleck agreeing to invest in the project, Joe and Mary
T. Sargent, Pres and Sue Smith, and Joe Van Vleck each put up $250
for one share of stock. With that $1,250 investment they registered
the Sherburne Corporation with the State of Vermont on April 6,
1956.
In the early planning stages, Smith and Sargent felt it would be
beneficial to have a third person actively involved with organizing
the project. Sargent had known Walter N. Morrison at Yale, and when
he returned East to get married, Sargent interested him in
Killington.
The three hiked into the mountains in the winter of 1956-57 and,
camping out in the snow, explored the area and took snow
measurements. Morrison also helped lay out the work road to the
mountain in early spring 1957 and became a shareholder and the
sixth member of the board of directors in June 1957.
On August 20, 1957, at a special meeting of the Sherburne
Corporation Board of Directors in Connecticut, Sargent, Smith, and
Morrison were appointed the Executive Committee. It turned out to
be a wise choice as the three of them functioned well as a
decision-making team.
CATCH-22: The dilemma that tested
determination
But while the group had made progress and an old farmhouse their
base of operations, things on the financial side were more
uncertain because the state highway department had not gotten the
funds to build the Access Road from Route 4 to the mountain.
Without a road and a lease, it was impossible to sell stock
outright. Sargent recalled, "You needed a road and capital to
obtain the lease. To raise capital you needed a road and a lease.
And to get a road, there were those who wanted to see capital and a
lease. It was a round and round circle of problems."
The "Catch-22" situation would have deterred a less determined
group. The road which Perry Merrill had said the legislature would
appropriate funds for never materialized in 1956, and when it
finally did in 1957, the highway department put the construction
off to 1958.
During this time, invested funds were held in escrow and when
the lease was not obtained, they were returned and then
re-solicited the following year. While this was exacerbating and
Morrison and Sargent had spent one awful trip trying to figure out
how they were going to tell Pres they needed to call off the
project and give up, it was really the only low moment that really
bothered Sargent, Morrison said.
An Unusual Way to Start a Mountain
Despite hardships, mishaps, and the lack of money, access road, and
lease, the group persevered and progress was made with the group's
own money having been spent on purchasing and making habitable the
old Bates farmhouse, building a work road to the mountain from the
farmhouse, and work on the mountain, and an order for two pomalifts
in 1957.
Sargent explained that this was an unusual way for a company to
begin a business. "Normally the founders would give themselves so
many shares of stock and then go out and sell stock and let the
shareholders assume the risk should the project fail to get off the
ground. But we paid up front so that we took all the risk and the
shareholders had none until the project was well under way," he
noted.
This willingness to assume the risk themselves illustrates
Sargent's and the board's early sense of responsibility to
shareholders - a significant factor because it became an
underpinning to company philosophy that existed from day one.
Sargent took much pride in the accomplishments of the company and
the track record that the corporation so carefully maintained.
When officials from the state or prospective investors came to
visit Killington, however, Sargent would disappear. As a major
financial backer to the project, Sargent was deemed "too youthful
looking to be influential," and it was mutually decided that "Mr.
Moneybags would stay out of sight" as he recalled with
self-effacing good humor, lest he scare off potential backers. [He
had increased his investment to 39 shares, while his wife Mary had
1, Smith 3, Sue Smith 1, Van Vleck 3, and Morrison 2 and, thus, the
reference to his own substantial financial backing.]
It's incongruous that the successful chairman of the board,
treasurer of the corporation, and financial genius behind
Killington would have resorted to hiding out, but it illustrates
just how young they were and just how thin that shoestring really
was!
Finally in 1958, the Killington "Access" Road was built and the
lifts were installed. When word came down from Perry Merrill, the
State Commissioner of Parks and Recreation who had interested Smith
in the mountain, that they might not obtain the lease until after
the area opened, Sargent moved heaven and earth to get the lease.
He was determined and due to his extraordinary efforts, it
happened.
With Smith and Sargent setting an example of hard work and
dedication, many others - including the directors, family members,
and friends - assisted with early mountain construction and
operations, thus lending support to the fledgling area when it
needed it most.
"Pres operated and managed the area on a daily basis, and on the
weekends he explained the mechanics to me, the value of this cable
grip or lift device," Sargent explained, "I communicated stock
warrants etcetera to him." Sargent's desire for a hands-on,
do-it-yourself approach was perfect for the genius lurking inside
Pres Smith. His own financial and business expertise complemented
the genius of Smith's vision and leadership.
Other Contributions
As corporate treasurer, Sargent devised many of the management
reporting methods, and many of Killington's innovative business
strategies were the result of his input. But Sargent also was an
active participant on the mountain, especially in the early
years.
From putting together lift towers to installing them and manning
the first ticket booth on opening day (in the converted chicken
coop that served as an outdoor ticket office on weekends,) Sargent
provided countless hours of labor on weekends and nights.
He especially enjoyed relating the story of when Smith came over to
look at the lattice lift towers he had put together. "Pres, just
shook his head, looked at me in disbelief and said, 'It's not
possible, it's just not possible. You're sure you did this by
following the instructions?'"
Admitting to not being particularly mechanically minded, Sargent
added, "I had put the tower together inside out. We had a terrible
time getting it undone. It was December and the bolts had frozen
solid."
As the ski area's first "public relations" person, he also
designed winter brochures, promotions, newspaper ads, and started
the Killington Klipboard, the mountain's first newspaper.
Sargent's financial backing got the project off the drawing
boards, while his participation in the planning, construction, and
decision-making process were instrumental to the area's
opening.
Times Change
In 2008 I asked Joe Sargent why they sold S-K-I Ltd. in 1996. It
was "simple" he said. The reason, he explained, was the new
industry model that centered on real estate and a serious
reluctance on the part of the company to get into real estate,
particularly the interval ownership trend on the horizon.
"Neither of us knew the real estate business or wanted to do
it," Sargent said.
Killington was successful on the mountain operations model, but
the real estate business model with interval ownership meant that
the nature of competition would change. They realized that resorts
like Okemo were doing exceptionally well using real estate profits
to reinvest in growing the mountain and skier visits.
But others had gotten into real estate and failed. Ascutney was
a notable case where over $50 million had been poured into a base
area village complete with hotel, restaurants, some retail, and a
sports/fitness center only to go under (1991) and then be auctioned
off at a bankruptcy sale for $1.1 million.
Sargent explained that the time-share trend enhances the growth
of skier days by locking someone in to their week's visit, but
Killington grew skier visits by building a lift. They knew how to
grow the value of the company because they could control growth and
operations and consistently produce profits that way. There was a
financial structure and operation in place that had worked but it
was changing fast.
Both Smith and Sargent continued to note in their remarks at the
S-K-I Annual Meetings in the 1990s that the company was well
positioned to take advantage of any attractive opportunities that
might come along. [They had acquired Mt. Snow in 1977 and
successfully turned it around to one of the East's top three
areas.] They consistently noted that "market changes and economic
and regulatory pressures would likely provide the impetus for new
opportunities."
As both Sargent and Smith had predicted, the opportunities did
increase. In 1994, S-K-I purchased three areas -Haystack,
Sugarloaf, and Waterville Valley-and became the largest ski company
in the country with a potential to do 2.6 million annual skier
visits.
But with an expand-and-grow or stagnate-and-die mantra, the
Board was interested in the cash offer made for it in 1996 for $18
a share. Weighing many factors, Sargent and the Board saw accepting
the fair offer as the prudent thing to do for shareholders. Times
had changed and both Sargent and Smith felt maybe a new owner could
take Killington to the next phase and build a village.
Sargent's legacy is one of support that enabled an unknown
wilderness to be developed into a world-class mountain-one that
innovated and pioneered many advances in the ski industry that
benefited ski areas and snowsport enthusiasts. His
behind-the-scenes efforts and work, as much as his financial
prowess, fostered the spirit of Alpine skiing at Killington. And
when the time came to let go, like a proud parent, Sargent (and the
Board) did so, hoping that the shareholders and Killington Resort
would benefit from that decision.
Joe Sargent was a friend to all who love mountains.
