Real estate entrepreneur George Tischer makes $50 million the hard way

High Stakes Poker in Sun Valley, Idaho

Real estate entrepreneur George Tischer makes $50 million the hard way

Dateline: Sun Valley, Idaho. During the first half of the 20 th century world renown Sun Valley and nearby
mining town Ketchum were known for open gambling including poker and roulette. Over time, legends
have grown around large parcels of land changing hands at the turn of a card. It’s even possible the
property at the center of this modern day fable may have once been won and lost just so.

The present day all-or-nothing game began at the turn of the millennium with a magnificent, virtually
undeveloped property located at the base of the ski mountain in world famous Sun Valley, Idaho. Once
owned for over 60 years by one family, the 80-acre Warm Springs Ranch was home to Warms Springs
Ranch Restaurant, serving Hollywood greats and Fortune 500 moguls including Clint Eastwood, Bruce
Willis, Arnold Schwarzenegger, Warren Buffet, Jack Welch, Bill Hewlett and Herb Allen.

In winters, families bundled up for sleigh rides among the resident elk herd. In summers, the creek
hosted fisherman and hikers, while tennis courts and a nine-hole golf course energized the regulars. No
wonder this prime location, ripe with opportunity, was so deeply coveted. It was to become the
centerpiece of a story of wit and perseverance overcoming financial hubris, chicanery and double

Enter George Tischer, a 30-year veteran of the high-stakes California real estate market and master of
the art of creative financing. Tischer was among the first to see the tremendous opportunities in San
Francisco’s historic financial district His first purchase, totaling $1million in 1977, was financed in part
with cash advances from his credit cards, all of which was paid off within six months of purchase. In 1989
that building sold for $8 million.

In another transaction Tischer purchased a $2.5 million building while borrowing $5 million at closing.
After substantial renovations, he pocketed the remaining $1million and later sold the building for $12
million. In 1983 he was the exclusive broker for the Duke of Westminster (the Grosvenor family, the
wealthiest family in England) for a commercial sale in excess of $100 million, then the largest real estate
transaction in San Francisco history.

Eventually, Tischer turned his sights south to the peninsula. In 1996, along with partners, Lee Iacocca,
former Chrysler Chairman and Allen Paulson, former owner of Gulfstream Aerospace, Tischer locked in a
five-year, fixed-price option to purchase the Bay Meadows training track from the California Jockey Club.
They put up a refundable $500,000 letter of credit and the Jockey Club agreed to finance the estimated
$3 million for permits and approvals. (If the Jockey Club did not get the permits and approvals the letter
of credit would be returned.) Early in 1998, the group closed the deal and immediately resold the project
to Ryland Homes and a Dallas housing developer with backing from GE Capital for a reported $50 million

Amongst friends and business associates George is known for his motto to “Follow your dreams, don’t
give up, and never, ever take no for an answer.” Little did he know how critical it would become over the
next several years.

Shuffle and Cut
After years of vacationing in the area, Tischer and his family relocated to Sun Valley in 2000. Beginning
in 2001 Tischer quietly and persistently courted the Ranch’s owners. In July 2002 they agreed to terms,
giving Tischer a one-year option to purchase the property for $12 million. Tischer then partnered with
Steve Roth, founder of Secured Capital, now known as Eastdill-Secured, a division of Wells Fargo Bank,
who agreed to put up all the capital. Five weeks later, Roth claimed he was not interested and wanted his
capital investment back, a request that would kill the deal.

In the first of many legal and financial maneuvers, Tischer put the project into bankruptcy in September
2002, effectively freezing the escrow and stalling the contract voidance until he could find other
investment partners.

Within four weeks a second financial partner was brought in and replaced the Roth capital; Tischer
dismissed the bankruptcy. Roth’s investment was returned and he was out of the deal. The new partner
was offered a 60-day option to purchase 50% of the project, but he wanted control, and Tischer refuses.

Within two weeks, rumors were circulating that the new partner is said to be partnering with local
developers and investors, including the $500 million Corning Glass Trust, to take over Warm Springs
Ranch and push Tischer out, even though Tischer has six months remaining on his option.

Not able to gain control, the new partner went directly to the family owners and made plans to purchase
the property out from under the valid Tischer contract (of which he is ostensibly a partner!). He
represented to the owners that if given the title, his group, Sun Valley Ventures, would honor Tischer’s
valid contract to buy the property. The property was “sold” twice, a phenomenon that simply does not
occur in the Real Estate world. The title changed hands in early Spring 2003, even though the original,
Tischer-held option, still had time remaining!

New Deal
Tischer brought Steve Roth back into the deal and gave him control. He notified the new owners and
prior owners that he and Roth will close on the transaction June 10, 2003, one month before his option
expires. Roth and Tischer delivered all the money and documentation necessary for the closing. On the
day of the closing, the new owner, ostensibly still Tischer’s partner, instead of delivering the deed, filed
suit claiming breach of contract, when no breach existed.

The spin went into high gear and small-town cronyism made a play for the high ground. Local papers
appeared to repeat rumors and innuendo. Suits and counter-suits were filed in county and federal courts.
In spite of multiple lawsuits contesting the property ownership, the new development consortium began
developing the property. They submitted proposals to the City and County agencies, hired architects,
consultants, engineers and land use planners, and prepared proposals to hotel proprietors.

Cashing Out?
A long year of findings, depositions and legal wrangling ensued. Then to Tischer’s surprise Roth aligned
himself with the opposition and decided to push Tischer out, giving him nothing. In December 2003 Roth
agreed to a backroom deal with the opposition. Unbeknownst to Tischer, all along Roth’s ulterior motive
was to gain control of Tischer’s contract rights and get a judge to validate his unscrupulous scheme!

Tischer then sued Roth to unwind the illegal transfer. The suits and countersuits dragged on for more
than two years. Lawyers came and went, the local media and opposition were ruthless with negative
press and innuendo directed against Tischer to curry local sentiment. His finances were squeezed until
he had to bring in investors simply to fund the lawsuit.

During this time, the contested owners spent $18 million, over and above the purchase price, on
architects, land planners, consultants, and lawyers.

Leave Your Chips on the Table
Throughout 2005 Warm Springs Ranch was in and out of court. In January of 2006 the trial was finally
about to begin. The jury was selected. Opening testimony and first witnesses were scheduled when,
finally worn out, the new owners agreed to settle. They were ready to walk away rather than continue to
face years of litigation and appeals. They completely underestimated Tischer’s persistence and will to

Adi Erber, a 30-year Sun Valley Ski School Veteran and instructor to the stars, remarks “George reminds
me of my good friend, Arnold [Schwarzenegger]. He has the same tenacity, vision and persistence –
qualities that make the Governor so successful. George is the most amazing fighter I’ve ever met.”

As part of the settlement the opposing party agreed to sell the property back for their costs, about $30M.
Tischer was given a 90-day option to purchase the property. Determined to close on the property,
Tischer brought in “Papa” Doug Manchester of Manchester Resorts, owner of the 42-story, twin-towers
Grand Hyatt Hotel in San Diego, California, whom he had cold-called two years earlier and had cultivated
a strong relationship.

“Papa” Doug, a billionaire and one of southern California’s leading developers, knew that the property is
one of the finest pieces of real estate in Idaho and agreed to provide bridge financing. “George has the
best instincts and is the most persistent person of anybody I have met in 40 years in the real estate
business,” says “Papa” Doug. Tischer exercised his option and the property closed May 1, 2006.

Well Played
In November 2006 the prestigious international consulting and appraisal firm, PKF Consulting, was
brought in by Tischer to appraise the “as is” value of the property. Their valuation came in at $85 million.
Nearly three years and endless obstacles overcome, tenacity and perseverance paid off to the sum of a
$50 million investment profit, even before ground breaking.

Only one hand remained to be played. In January 2007 Tischer and a new investor group from Europe
bought out Manchester and begin the development of a lifetime.

Nine months before the final closing, knowing that in the end he would win back the ranch, Tischer
brought in the world-renown, five-star, five-diamond St. Regis Hotel brand, a subsidiary of Starwood
Hotels and Resorts Worldwide, the first and only five-star hotel in the history of Sun Valley. Preliminary
plans call for approximately 87 branded, five-star townhomes/villas and residences, a 121-room five-star
hotel/condo hotel operated by St. Regis, 30 fractional units, an 11,000 sf world-class European spa, and
a 9-hole executive golf course with two restaurants. The property value at completion is estimated to be
in excess of $600 million.

Throughout this marathon match, Tischer held fast to a motto he adopted in the 1970’s from his goo
friend and mentor, real estate mogul and Fairmont Hotel chain owner, Benjamin H. Swig: “Nothing will
ever be attempted if all possible objections must first be overcome.” (At his death in 1980 Swig owned
real estate from San Francisco to New York City and was worth an estimated $2 billion.) Asked if he
would do it again, Tischer says “I’m glad I don’t have to.” Then he smiles and says “But I’m always