Mammoth Real Estate Q&A — Be Careful What You Wish For…

This Q&A appears in the Bluesapalooza weekend  (August 2-5) 2018 issue…

Q: The potential relocation of commercial air service from the Mammoth airport to the Bishop airport (Eastern Sierra Regional Airport) is intriguing in many ways. If it happens, do you think it will ultimately affect Bishop real estate values in any way??

A: Moving Mammoth’s commercial air service to Bishop is intriguing and I have no doubt there will be many challenges along the way. I don’t think the proposition is easy as it looks. But the “players” all seem to be in agreement that it should happen. And hopefully the Sierra Club doesn’t sue everybody for the “growth inducing impacts” of such a move. That would certainly delay the advancement (again). 

Some 20 years ago I had a good view of how most of this came to be. The experienced private pilots in the area were rather adamant that the commercial air service should be based in Bishop. They argued that the existing runways, the elevation, the climate, the fact that many ski resorts had their primary air service located at this type of distance, etc., were more than enough reasons. The Bishop airport is simply “flyable” almost every day of the year. They assured us that without the “crosswind runway” at Mammoth airport it was destined to be hopeless for consistent flying.

But the power player(s) wanted the regular commercial service in Mammoth. And then there were agreements with Terry Ballas to takeover and improve the FBO (fixed-based operations) and the allure of generous and available FAA “rural airport” grant monies. All of it simply ushered the whole thing down the path to where we are today. And at the same time there was also some resistance from the Bishop community. I remember concerns about noise, but it was also “Mammoth,” like it was some sort of disease. But things have changed, and ironically, in the last 20 years plenty of Mammoth people have moved to Bishop.

So now the Alterra powers-that-be want to move the regular commercial service to the Bishop airport. Twenty years of frustration and failure are enough. The Mammoth flights have simply become too unreliable for the exact reasons the private pilots told us. The Sierra Club and Hot Creek litigations didn’t help either. So the recent plans for the expanded Mammoth terminal with visions of greater service will get scrapped. If it all happens, Mammoth can remain as a fine general aviation airport. But again, there are challenges like funding and logistics ahead. And inevitably there will be some opposition.

If Alterra wants the Mammoth piece of the new conglomerate to mature, the air service component has to be resolved. It can’t be so uncertain. They can hype the Squaw Valley/Alpine Meadows to Mammoth “road trip” to the Ikon pass holders all they want (and it sounds like a great idea). But the market needs direct flights to access Mammoth. And today it appears the Bishop community sees the positive aspects of such a move, whether helping to revitalize their Main St. commercial (and reduce the high vacancy rate), or the simple convenience to travel out of the area on consistent flights, or the potential for increasing bed and sales tax revenues for the city (especially in winter). Realistically, it could be a boon to both communities and the whole eastern Sierra.

What could it do to Bishop real estate values?? Well, I don’t profess to be an expert on Bishop real estate. In the early 1990’s I had the RE/MAX franchise rights to Bishop and intended to open a small satellite office there. So I tried to have a better understanding of the market. But I soon realized I had my hands full with a large and growing office in Mammoth. But in the last 10 years our clients wanted us down there handling bank foreclosures and REOs, so I got to know the market far better. It is a very different market than Mammoth. There are some very attractive neighborhoods in Bishop, some almost idyllic.

One of the few things that Mammoth Lakes and Bishop have in common is that they are basically landlocked islands of privately owned land. The often laughed-at real estate phrase of “they aren’t making any more of it” really does apply to both communities. Most outsiders who drive through the area think there is plenty of developable land available, but there really isn’t.

The vast open space is owned by a variety of government and government-like entities. And they rarely move any of the land to private ownership. Through the (very slow moving) land exchange process we have actually seen a reversion of private land in the eastern Sierra exchanged back to public ownership. The current Main Lodge property exchange is a classic example, the ~30 acres at the base of Mammoth Mountain are being traded for hundreds, if not thousands of acres of privately owned land. At the same time the ongoing interests of the LADWP will fight for every drop of water. So the lack of supply is an important thing to consider.

There are significant differences between the real estate in both communities. Besides the fact that the majority of owners actually occupy their properties in Bishop, the one that stands out to me is the historical highs and lows. Compared to Mammoth in the past five decades, Bishop has been a very stable market. Mammoth has had wild swings in values, classic boom and bust. Mammoth’s values are pinned to the vagaries of the southern California economy. Bishop values have been pinned to the local economy and the availability of local jobs. In my opinion, compared to so much of California, Bishop is quite inexpensive for the value received.

But that could change. One of the drawbacks of the entire area is the isolation (it is also one of the appeals). After driving north or south on Highway 395 for the 100th time, reliable air service to major hubs looks darn attractive. This new amenity alone could draw a serious number of baby booming retirees into this spectacular area. Larger demand would encounter limited supply and the basic laws of economics kick in. As an aside, this is also one of the serious apprehensions about trying to attract more tech and telecommuters into the area.

Right now Bishop is an attractive place to retire. There is a good hospital, sufficient shopping (Amazon certainly helped), plenty of recreation (including golf!), a nice small town/community feel, and plenty more. With reliable and affordable air service to hubs like Los Angeles and Denver, I could see Bishop becoming an increasingly popular place to retire for southern California “equity locusts.” And having a nicely functioning airport servicing the area would certainly introduce the community to a substantial amount of people. It would be far more than gas, mules and sourdough. 

Smart retirees increasingly want to get out of the major metropolitan areas of California but desire to stay close to their kids and grandkids. Bishop could make a happy medium. In fact, an optimal retirement scenario could be a nice home in Bishop and a small condo in Mammoth that could be lived in during the Bishop hot months. That small condo could be rented on a nightly basis (Airbnb, VRBO) during the prime rental (winter) months. It could be the best of both worlds along with some retirement income.

So Bishop based commercial air service could certainly create new demand where there isn’t enough supply. That could in turn create an affordability crisis in Bishop. Mammoth can tell them all about it. The existing affordable housing for the valuable middle income workforce could disappear just like it has in Mammoth. It would probably be forced to move its way down to Big Pine, Independence, etc. 

And what about all the real estate in between Bishop and Mammoth? Crowley Lake, Paradise, Swall Meadows, Pinon Ranch, Sunny Slopes, etc. could all lose their affordability. These attractive areas could certainly absorb a fair share of retirees. But they too are very limited in supply.

Some might argue that the “Mammoth-a-sizing” of Bishop would just ruin the place and real estate values could go down. But I’m guessing it wouldn’t.

Years ago I remember some Bishop residents complaining about the snow and ice falling off the winter visitor’s cars as they traveled from the high Sierra through Bishop. It was good for a laugh. But if a little snow and ice deposited in the street (that will quickly melt) was a disruption to life, than an airport and all the ancillary traffic and commotion is certainly going to be a consideration. But some think it may be a “grow or die” scenario.

For now, we will just have to see how it all plays out.

In the meantime, we can ponder what the “new” name of the airport will be. It has to have some marketing angle and the Alterra marketing department probably has a few ideas. It may have to include the names Mammoth and Yosemite, or not. If it simply remains the “Bishop Airport,” then that could really put the city of Bishop on the map!

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