Revelstoke resort limping financially
By Allen Best
REVELSTOKE, B.C. – Financial troubles are slowing the work at Revelstoke Mountain Resort, the major new ski area that was opened last year. While the details are still being sorted out, marketing director Ashley Tait told the Revelstoke Times Review, the Nelson Lodge is still to be completed, but the timing has shifted. Some staff members have been shed.
Control of the project has been assumed by the Northland Properties Group, a Vancouver-based company that invested a reported $10 million into the project a year ago. Previous control of the project had been held by Don Simpson, a Denver-based developer of housing.
What you need to know is that we were overspent and in a very tough position,” Rod Kesleer, chief operating officer, told the Revelstoke City council at an Oct. 27 meeting.
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Revelstoke resort limping financially
Started by Peter, Nov 05 2008 08:26 PM
12 replies to this topic
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the suicidalskier of Muskoka
Posted 06 November 2008 - 09:02 AM
With these financial issues, I'd bet that the growth of the resort in compliance with their master plan will slump.
So is this happening because of a lack of skier visits or is it due to something else?
Will
So is this happening because of a lack of skier visits or is it due to something else?
Will
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Posted 06 November 2008 - 10:36 PM
This is just pure speculation but I think it probably has to do with the fact that the ski area is not as accessible as others in the region and the fact that they grew very quickly. I think that they may not have seen the expected numbers in the early few seasons, and have not been able to offset development costs as expected. I hope to make it up there but I might not until next spring.
-Bryan
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"You could say that a mountain is alot like a woman, once you think you know every inch of her and you're about to dip your skis into some soft, deep powder...Bam, you've got two broken legs, cracked ribs and you pay your $20 just to let her punch your lift ticket all over again"
Theres a place for all of God's creatures, right next to the mashed potatoes.
"You could say that a mountain is alot like a woman, once you think you know every inch of her and you're about to dip your skis into some soft, deep powder...Bam, you've got two broken legs, cracked ribs and you pay your $20 just to let her punch your lift ticket all over again"
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Posted 07 November 2008 - 07:12 PM
poloxskier, on Nov 7 2008, 01:36 AM, said:
I think that they may not have seen the expected numbers in the early few seasons, and have not been able to offset development costs as expected.
Revelstoke has only been open for one season now. This upcoming one will be their second.
-Sage
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Posted 07 November 2008 - 07:36 PM
I think it's fair to say that most large resort face financial difficulty in their first few years. Deer Valley, Park City Mountain Resort, Whistler, Moonlight Basin, Tamarack are just a few.
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Posted 07 November 2008 - 09:27 PM
Much more detailed article:
Credit crunch hits Revelstoke Mountain Resort
By Aaron Orlando - Revelstoke Times Review
Published: November 03, 2008 6:00 PM
The international financial crisis and credit crunch appears to have taken a toll on the progress of the Revelstoke Mountain Resort.
What is clear is that significant management and ownership changes are underway, and the credit crunch, as well as other factors, will cause a delay in the scheduled opening for many of the physical components of the resort and on-mountain infrastructure such as chairlifts.
Revelstoke Mountain Resort Chief Operating Officer Rod Kessler appeared as a delegation before Revelstoke City Council at their regular meeting on Oct. 27 and announced that control of the project had been assumed by the Northland Properties group. “I appreciate everybody’s few minutes this afternoon to talk about -- we’re in a different place,” said Kessler. “The City of Revelstoke was in a different spot than it was a week ago and so is Revelstoke Mountain Resort. I’m happy, very happy, very pleased to announce that the development and the operations have been assumed full responsibility by the Northland group, which is operated by the Gaglardi family out of Vancouver,” he said.
The Northland Properties Corporation is a privately owned corporation based in Vancouver. It is the parent company of the Sandman Hotels, Dencan Restaurants (which operates 36 Denny’s restaurants in Western Canada), Moxie’s Restaurants, as well as Northland Asset Management. The company is headed by billionaire Chairman Bob Gaglardi and president Tom Gaglardi, who is probably most well known for his involvement in a lawsuit following a failed bid to acquire ownership of the Vancouver Canucks.
Kessler went on say that Revelstoke Mountain Resort faced financial difficulties and characterized the increased involvement of Northland as a positive. “What you need to know is that we were overspent and in a very tough position. And I think we all need to recognize how fortunate we are to be where we are and have the opportunity to work with Northland and the Gaglardi family to move forward. The operating plan at this point is to open on time and to tighten down the project, approach it more conservatively than we have in the past,” he said.
Northland has been a partner in the project since November 2007 when media reports put the Northland stake in RMR at over $10 million. Because Northland is a private company, financial statements are not publicly available.
Kessler went on to request the city’s assistance in cutting through red tape at city hall, saying that safety would remain paramount. “We certainly will respect all the requirements that go there, but when it comes into the monetary side of putting in bonds and trying to finish this project I’d rather ask you to please work with your administrators to give us [the] time and the attention we need right now to make sure this hotel can open,” he said. “It is essential to move forward, that we get this hotel open this year, we get this project closed so we can get the money in the bank.”
Kessler went on to stress the Gaglardis’ commitment to the project, saying they had asked him to emphasize their belief in the community and the project.
Revelstoke Mountain Resort Director of Sales and Marketing Ashley Tait spoke with the Times Review later in the week to explain some of the changes and their practical implications, especially in the short term. Many of the timelines for completion of specific projects have been adjusted. “At this point we’re opening very soon. November 27 is our targeted opening, and as with any ski area, it’s always a targeted opening,” saying it’s of course snow-dependent, but that she was confident that with normal weather it would be open. “Between now and then, we’re continuing our on mountain development. On Friday we were flying in the towers for lift 14 -- this is the new chair that will be opening this winter,” she said.
The new lower Revelation Gondola, which connects the upper mountain and day lodge area with the village base, and the Ripper high speed quad chair, which will open up the North Bowl area are now targeted to open on Dec. 20, 2008.
The upper Revelation Gondola and the Stoke high speed quad chairlifts were the two opened last season. They will be opening on Nov. 27 as scheduled, said Tait.
She says a lot of additional work has been completed on runs, gladed areas and generally smoothing out areas on the hill to improve the quality of the riding.
Despite the statements made by Kessler at the Revelstoke City Council regarding management control of Revelstoke Mountain Resort, Tait said later in the week that the details were still being sorted out. “There is an anticipated shift amongst all the existing partners, the details have yet to be released and will be forthcoming.”
She said RMR is looking to streamline operations. “So, yes, we have seen some shifts and some downsizing going on, but that is from the same perspective in the way any other company would be downsizing right now.” She said one of the goals is to create leaner operations to allow the projects to move forward successfully. She said she didn’t have details on any partners that were now out of the project, saying that mathematically, an increased role for Northland would mean a diminished role for others.
She says the Nelsen Lodge will be completed, but likely in phases. “We are assessing which phases of Nelsen Lodge are opening when. It’s just a matter of when. All things are going to be opening, it’s just the timing. The timing has shifted. I don’t have a date for when things are going to be opening for this winter,” she said.
She says the only absolutes for opening day are the day lodge, the upper Revelation gondola and the Stoke chair -- all of which were opened last season.
She also said that changes have been made at RMR at the management level, but that the core leadership group is intact. “We have had some internal changes. We’ve had to downsize on some staffing.” She says that Paul Skelton remains as president and Rod Kessler as Chief Operating Officer. “All of the senior management team is in existence and we’re all working very closely together,” she said.
Tait says a major benefit of the change in ownership means the resort project is on a firmer financial footing. “The increased ownership [means] Revelstoke Mountain Resort can continue its growth and management, so it’s a positive thing to keep the resort in operations mode,” she says. “We’re making decisions every day that are to strengthen where we’re at and keep things moving forward, not just for the company itself, but for the community, and that’s something we want people to know, that we are working as hard as we possibly can to keep things moving forward.”
She says ongoing progress is one key message she’d like to get out to the community. “We are still going forward. There’s certainly, as you said, there’s lots of rumours going on. We have had to make some changes that [have] meant some shifts, but we are moving forward and we certainly want people in town to know that we are still operating.” she says, adding that as more information comes out, they’ll let people know.
Tait said the details of outstanding money owed to contractors was being worked on. “Right now I can just say that we are working with a lot of our partners to be coming up with terms that can work for everyone, and we have support from our ownership to keep moving forward.”
She said currently RMR is prioritizing projects in order to move forward as quickly as efficiently as possible. “Right now we’re doing an assessment of where the best placement for staff is ... to keep everything moving forward.”
“We will be opening things, probably in phases, is the easiest way to describe it.”
How does the international financial situation and management changes affect long-term goals? “Right now things have not been determined, but what I would say with the ownership change is that it strengthened the position of RMR. Just certainly right now with the economic time that we’re in it has certainly had an impact on just a lot of different companies ... across the country and around the world.”
“[The international credit situation] is something that we’ve been dealing with as well, so we’ve stepped back and done an assessment of the way we’ve been operating and now we’re moving forward with changes,” she said.
“All of our projects are moving forward. It’s just that we’ve had shifted timelines,” says Tait, adding the current situation was certainly based on the current international economic climate.
As for the larger 15-year development plan, Tait says real estate sales will be a factor. “The timeline for the master development plan is always just based on where you keep moving through development. When real estate is selling, that allows us to keep the expansion moving forward.”
“We have to revisit our timelines for some things, absolutely, but it will allow Revelstoke Mountain Resort to continue operations and be successful.”
Credit crunch hits Revelstoke Mountain Resort
By Aaron Orlando - Revelstoke Times Review
Published: November 03, 2008 6:00 PM
The international financial crisis and credit crunch appears to have taken a toll on the progress of the Revelstoke Mountain Resort.
What is clear is that significant management and ownership changes are underway, and the credit crunch, as well as other factors, will cause a delay in the scheduled opening for many of the physical components of the resort and on-mountain infrastructure such as chairlifts.
Revelstoke Mountain Resort Chief Operating Officer Rod Kessler appeared as a delegation before Revelstoke City Council at their regular meeting on Oct. 27 and announced that control of the project had been assumed by the Northland Properties group. “I appreciate everybody’s few minutes this afternoon to talk about -- we’re in a different place,” said Kessler. “The City of Revelstoke was in a different spot than it was a week ago and so is Revelstoke Mountain Resort. I’m happy, very happy, very pleased to announce that the development and the operations have been assumed full responsibility by the Northland group, which is operated by the Gaglardi family out of Vancouver,” he said.
The Northland Properties Corporation is a privately owned corporation based in Vancouver. It is the parent company of the Sandman Hotels, Dencan Restaurants (which operates 36 Denny’s restaurants in Western Canada), Moxie’s Restaurants, as well as Northland Asset Management. The company is headed by billionaire Chairman Bob Gaglardi and president Tom Gaglardi, who is probably most well known for his involvement in a lawsuit following a failed bid to acquire ownership of the Vancouver Canucks.
Kessler went on say that Revelstoke Mountain Resort faced financial difficulties and characterized the increased involvement of Northland as a positive. “What you need to know is that we were overspent and in a very tough position. And I think we all need to recognize how fortunate we are to be where we are and have the opportunity to work with Northland and the Gaglardi family to move forward. The operating plan at this point is to open on time and to tighten down the project, approach it more conservatively than we have in the past,” he said.
Northland has been a partner in the project since November 2007 when media reports put the Northland stake in RMR at over $10 million. Because Northland is a private company, financial statements are not publicly available.
Kessler went on to request the city’s assistance in cutting through red tape at city hall, saying that safety would remain paramount. “We certainly will respect all the requirements that go there, but when it comes into the monetary side of putting in bonds and trying to finish this project I’d rather ask you to please work with your administrators to give us [the] time and the attention we need right now to make sure this hotel can open,” he said. “It is essential to move forward, that we get this hotel open this year, we get this project closed so we can get the money in the bank.”
Kessler went on to stress the Gaglardis’ commitment to the project, saying they had asked him to emphasize their belief in the community and the project.
Revelstoke Mountain Resort Director of Sales and Marketing Ashley Tait spoke with the Times Review later in the week to explain some of the changes and their practical implications, especially in the short term. Many of the timelines for completion of specific projects have been adjusted. “At this point we’re opening very soon. November 27 is our targeted opening, and as with any ski area, it’s always a targeted opening,” saying it’s of course snow-dependent, but that she was confident that with normal weather it would be open. “Between now and then, we’re continuing our on mountain development. On Friday we were flying in the towers for lift 14 -- this is the new chair that will be opening this winter,” she said.
The new lower Revelation Gondola, which connects the upper mountain and day lodge area with the village base, and the Ripper high speed quad chair, which will open up the North Bowl area are now targeted to open on Dec. 20, 2008.
The upper Revelation Gondola and the Stoke high speed quad chairlifts were the two opened last season. They will be opening on Nov. 27 as scheduled, said Tait.
She says a lot of additional work has been completed on runs, gladed areas and generally smoothing out areas on the hill to improve the quality of the riding.
Despite the statements made by Kessler at the Revelstoke City Council regarding management control of Revelstoke Mountain Resort, Tait said later in the week that the details were still being sorted out. “There is an anticipated shift amongst all the existing partners, the details have yet to be released and will be forthcoming.”
She said RMR is looking to streamline operations. “So, yes, we have seen some shifts and some downsizing going on, but that is from the same perspective in the way any other company would be downsizing right now.” She said one of the goals is to create leaner operations to allow the projects to move forward successfully. She said she didn’t have details on any partners that were now out of the project, saying that mathematically, an increased role for Northland would mean a diminished role for others.
She says the Nelsen Lodge will be completed, but likely in phases. “We are assessing which phases of Nelsen Lodge are opening when. It’s just a matter of when. All things are going to be opening, it’s just the timing. The timing has shifted. I don’t have a date for when things are going to be opening for this winter,” she said.
She says the only absolutes for opening day are the day lodge, the upper Revelation gondola and the Stoke chair -- all of which were opened last season.
She also said that changes have been made at RMR at the management level, but that the core leadership group is intact. “We have had some internal changes. We’ve had to downsize on some staffing.” She says that Paul Skelton remains as president and Rod Kessler as Chief Operating Officer. “All of the senior management team is in existence and we’re all working very closely together,” she said.
Tait says a major benefit of the change in ownership means the resort project is on a firmer financial footing. “The increased ownership [means] Revelstoke Mountain Resort can continue its growth and management, so it’s a positive thing to keep the resort in operations mode,” she says. “We’re making decisions every day that are to strengthen where we’re at and keep things moving forward, not just for the company itself, but for the community, and that’s something we want people to know, that we are working as hard as we possibly can to keep things moving forward.”
She says ongoing progress is one key message she’d like to get out to the community. “We are still going forward. There’s certainly, as you said, there’s lots of rumours going on. We have had to make some changes that [have] meant some shifts, but we are moving forward and we certainly want people in town to know that we are still operating.” she says, adding that as more information comes out, they’ll let people know.
Tait said the details of outstanding money owed to contractors was being worked on. “Right now I can just say that we are working with a lot of our partners to be coming up with terms that can work for everyone, and we have support from our ownership to keep moving forward.”
She said currently RMR is prioritizing projects in order to move forward as quickly as efficiently as possible. “Right now we’re doing an assessment of where the best placement for staff is ... to keep everything moving forward.”
“We will be opening things, probably in phases, is the easiest way to describe it.”
How does the international financial situation and management changes affect long-term goals? “Right now things have not been determined, but what I would say with the ownership change is that it strengthened the position of RMR. Just certainly right now with the economic time that we’re in it has certainly had an impact on just a lot of different companies ... across the country and around the world.”
“[The international credit situation] is something that we’ve been dealing with as well, so we’ve stepped back and done an assessment of the way we’ve been operating and now we’re moving forward with changes,” she said.
“All of our projects are moving forward. It’s just that we’ve had shifted timelines,” says Tait, adding the current situation was certainly based on the current international economic climate.
As for the larger 15-year development plan, Tait says real estate sales will be a factor. “The timeline for the master development plan is always just based on where you keep moving through development. When real estate is selling, that allows us to keep the expansion moving forward.”
“We have to revisit our timelines for some things, absolutely, but it will allow Revelstoke Mountain Resort to continue operations and be successful.”
- Peter<br />
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Posted 10 November 2008 - 09:01 AM
This really shouldn't come as a surprise to anyone paying attention to the current economic situation. While it has great skiing and snow, Rvelstoke was all predicated on real estate sales driving revenues. This is especially the case b/c it is so far away from major population centers and is generally inaccessible. I will be surprised if the owners don't declare bankruptcy ala Tamarack, though most of it will eventually get built, it's just going to take a lot longer than planned. This has absolutely nothing to do with lift tickets, but then again, little does at the major ski resorts anymore.
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Posted 10 November 2008 - 10:32 AM
Tin Woodsman, on Nov 10 2008, 09:01 AM, said:
This really shouldn't come as a surprise to anyone paying attention to the current economic situation. While it has great skiing and snow, Rvelstoke was all predicated on real estate sales driving revenues. This is especially the case b/c it is so far away from major population centers and is generally inaccessible. I will be surprised if the owners don't declare bankruptcy ala Tamarack, though most of it will eventually get built, it's just going to take a lot longer than planned. This has absolutely nothing to do with lift tickets, but then again, little does at the major ski resorts anymore.
I don't think this is an issue of not being able sell enough real estate. Revelstoke sold the entire Nelson Lodge within hours of making it available. Now they are unable to build the properties that have been purchased because they can't get financing. Seems like the same deal with Tamarack, the buyers are there but the resorts can't get the real estate built.
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Posted 10 November 2008 - 07:37 PM
I bet a lot of those buyers who bought condos within hours are backing out of the deals now. The same thing is happening down here, there are too many condos on the market and new towers were built with deposits on all the units, then buyers ate the deposits and backed out as the economy went to crap. It takes time to build up a resort with a loyal following
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Posted 10 November 2008 - 08:49 PM
Andoman, on Nov 7 2008, 07:43 PM, said:
I'd bet the Winter Olympics will help them out a great deal.
Unfortunately, all of the events are held at Cypress or Whistler or otherwise in Vancouver, which is nowhere Revelstoke.
I hope the best for this new ski area that it succeeds in its prospects so that I may ski there some day.
-Matt
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Posted 11 November 2008 - 06:57 AM
skierdude9450, on Nov 10 2008, 11:49 PM, said:
Unfortunately, all of the events are held at Cypress or Whistler or otherwise in Vancouver, which is nowhere Revelstoke.
I hope the best for this new ski area that it succeeds in its prospects so that I may ski there some day.
I hope the best for this new ski area that it succeeds in its prospects so that I may ski there some day.
My construction news rag had an article about some extreme slope clearing going on at revelstoke for the super G, but I'll look again when I get back to the office.
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Posted 11 November 2008 - 07:13 AM
floridaskier, on Nov 10 2008, 10:37 PM, said:
I bet a lot of those buyers who bought condos within hours are backing out of the deals now. The same thing is happening down here, there are too many condos on the market and new towers were built with deposits on all the units, then buyers ate the deposits and backed out as the economy went to crap. It takes time to build up a resort with a loyal following
Exactly. But more importantly, there is a realization that real-estate driven business models in remote locales are not necessarily sustainable over the long-term. The Nelsen Lodge sold out at the peak of the bubble and I would argue that a lot of those buyers viewed it purely as an investment play and not b/c of some deep, abiding belief inthe quality of the Revie skiing experience. That's the definition of a bubble - valuing something purely on the expectation that someone else will pay more for it rather than on the fundamentals.
As for the Olympics - ha! Not only are they 300 miles away, the mythical Olympic boost did nothing to help a similar, real-estate driven resort in Utah known as The Canyons, and they had events next door.
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