Harper’s Magazine: Slippery Slope - How Private Equity Shapes a Ski Town
…Big Sky stands apart for other reasons. The obvious distinction is the Yellowstone Club, a private resort hidden in the mountains above the community that Justin Farrell, a professor of sociology at Yale and the author of Billionaire Wilderness, has described as “the pinnacle, or inevitable telos, of the trajectory of extreme wealth concentration in the United States.” The club is one of the most exclusive institutions on the planet. Guards watch its gates, and Google Street View doesn’t show its streets. It has its own ski mountain, a fire department, and a restaurant overseen by a celebrity chef; people who have worked inside describe thirteen-thousand-square-foot homes and sharkskin bar tops. The club’s members reportedly include Bill Gates, Mark Zuckerberg, Eric Schmidt, and Warren Buffett. As of 2019, new members put down a $400,000 deposit and paid about $44,000 in annual fees, according to Mansion Global. Those with the means can buy property on the club’s land, and sources note that sale prices can be well north of $20 million. Current and former employees insisted on anonymity, fearing retaliation from an institution that employs a private security force.
In recent years, CrossHarbor Capital Partners, the private-equity firm that owns the Yellowstone Club, has emerged from behind the club’s walls and directed its financial might at the broader Big Sky area. Through Lone Mountain Land Company, the developer it owns and uses to conduct local business, CrossHarbor owns at least thirty properties, worth about $135 million, in what people regard as Big Sky’s downtown area, according to a Harper’s Magazine analysis of publicly available Montana property data; it also owns hundreds of acres, including all the undeveloped residential and commercial land in the same sector. It is also one of the area’s prominent landlords, with hundreds of housing units for community members. Big Sky is unincorporated, with no mayor, no city council, few of the representative bodies that a standard local government would provide. Instead, over decades, a patchwork of hundreds of homeowners’ associations (HOAs), special districts, volunteer boards, and nonprofits—notably the Yellowstone Club Community Foundation—has come together to manage the community. That didn’t matter so much years ago, when Big Sky was a sleepy hamlet. But today, the median home price is more than $2.5 million. And CrossHarbor, via its local affiliates like Lone Mountain, stepped into this regulatory void, gaining increased power by virtue of its financial portfolio. Farrell put it bluntly. “Big Sky is a strange town,” he told me, “in the sense that it’s not really a town.”
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