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Once Upon a Time in History: Remembering Joe Sargent

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."

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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.