Deep snow, deep pockets
It's a billion-dollar bet on climate change. As global warming melts the world's great ski resorts, real estate developers are gambling on Revelstoke, B.C. But will the mountain's heavy snowfall outweigh its remoteness?
DAVID EBNER

Globe and Mail Update

January 29, 2008 at 6:48 AM EDT

REVELSTOKE, B.C. — Snow pours down.

In the remote mountains of British Columbia near the small town of Revelstoke, snow pours almost constantly, an average of 15 metres annually, an astounding amount that has made Revelstoke and nearby Rogers Pass famous for the snow-obsessed in Canada and beyond for decades.

Now, four real estate developers are planning to spend $1-billion - with $80-million already on the table - on Revelstoke Mountain Resort LP, a giant new ski area that opened last month on Mount Mackenzie in eastern British Columbia. At its core, this is a huge property play in a place that's essentially in the middle of nowhere.

Underpinning the big bet is the snow. In Revy, snow doesn't drift down. It doesn't just fall idly from the grey, stormy sky above. It pours.

Its backers believe this snow will make Revelstoke Mountain Resort a long-term winner in the hypercompetitive business of recreational real estate. That's because the white stuff seems to be becoming extinct at a lot of famous resorts in Europe and elsewhere.

Call it climate change real estate.

For the real estate players behind the mountain resort - and the planned village of 5,000 homes at its base - climate change could prove a bonanza.

"If, 20 years from now, we only get half the snow, it's still much more than anyone else," says Hunter Milborne, one of the four developers.

Mr. Milborne is also the Toronto-based managing director of Sotheby's International Realty Canada.

Snow, not an issue just a couple of years ago, is now on the minds of all resort operators. Aspen Skiing Co., owner of one of the most famous ski areas in the United States, has started savesnow.org, calling snow "an endangered species," urging mountain enthusiasts, in bold text, to "call the President right now."

Mr. Milborne and his partners are seeking to transform the mighty slug - the nickname for the slow double chairlift that ran a short way up Mount Mackenzie at the old Powder Springs ski hill - into an international destination.

The other deep-pocketed owners include Robert Powadiuk, a Toronto developer, and Don Simpson, founder of the large Denver-based apartment firm Simpson Property Group LP. Mr. Simpson has visited the region for two decades. "I've always thought it was the best skiing in the world," he says.

Last month, Northland Properties Group of Vancouver - the closely held owner of the Sandman Hotel chain and two restaurant chains - paid more than $10-million to sign up. Northland is led by billionaire Bob Gaglardi, one of the richest people in Canada.

So far, $80-million has been laid down on Mount Mackenzie, for infrastructure that includes an eight-person gondola and a four-person chairlift. The lifts rise up more than 1,400 metres, ranking them just behind Whistler-Blackcomb, north of Vancouver. With the gondola extension planned for next year, Revelstoke Mountain will be shooting for the No. 1 spot.

The backers' 15-year, $1-billion plan is to build a mini-Whistler - but without the madding crowds. At the base of the hill, where the first volley of real estate construction has begun and is slated to be ready for the start of next winter, there will be condos, of which more than 100 have been sold. More exotic are the 20 single-home lots of about an acre apiece, which sold for between $650,000 and $1.5-million - many zoned for their own private heli-pads.

The challenges remain enormous. Revelstoke, a town of about 8,500, is remote, a hard five-hour drive from Calgary and a long six-hour haul from Vancouver; the nearest sizable airport, in Kelowna, B.C., is still a two-hour drive away.

Then there's the competition in B.C., starting with Intrawest ULC's Whistler-Blackcomb, as well as Kicking Horse east of Revelstoke and Red Mountain to the south, both of which are established, expanding and excellent destinations.

Revelstoke Mountain, however, packs a counterpunch. It's no mere ski area. It's a "Snow Rodeo," as one epic run is named.

To differentiate itself from mountain rivals and other recreation challengers, the owners of Revelstoke Mountain are trying to create a winter destination like no other. Last year, they bought a local heli-ski company and a cat-skiing operation, the term for an increasingly popular type of backcountry skiing. One idea is to sell guests passes with a certain number of vertical metres, to be used to ski inbounds at the resort or to venture farther afield.

"Adventure," chief operating officer Rod Kessler says riding the upper chairlift with snow swirling during an early season storm, "is part of who we are. We have a lot of things to prove. It's still the beginning of the beginning."

It has drawn international attention. As Revelstoke Mountain pulls half of its current real estate buyers from outside Canada - the United States and Europe - it is this type of lure that adds to the rugged and remote appeal as the developers try to conjure a mix that will succeed in a crowded real estate market.

"This sort of prime, central property simply does not exist elsewhere," says London-based Chris Kirkland, a former financier now working in property development who bought a lot that will have a heli-pad.

Mr. Kirkland owns a chalet in 3 Valleys in France, as well as a condo at Whistler. But it is Revelstoke - which he first visited last winter for heli-skiing - that stands out. "It was sensational. The snow was amazing and it was the best tree skiing I have ever done."

For all the hype, snow is integral.

Last October, in Davos, Switzerland, another winter playground, the United Nations World Tourism Organization held a conference bringing together people from about 100 countries, warning that the entire tourism industry - winter and summer - has to get ready to adapt to climate change as fast as possible.

Zul Haji, a Calgary-based investor, was intrigued by the concept of climate change real estate. He paid $450,000 for a condo, one of the many units snapped up in a single day last March as Revelstoke Mountain Resort sold $70-million of real estate in its first offering.

"With global warming, as we get less and less snow at lower elevations, a lot of ski hills will be out of business," Mr. Haji says. "That was my main motivation."

So, as snow pours down, Mr. Simpson from the U.S. ski capital of Colorado says the white stuff - and its year-in, year-out reliability - is key for Revelstoke Mountain to draw enough money and people to make the $1-billion project work, trying to rival the likes of Whistler.

"Snow in Revelstoke is just so dependable," Mr. Simpson says. "It's always abundant."

*****

THE MORE, THE MERRIER

Traditional industries in southeastern British Columbia - forest products and mining - have been fading for years as economic fuel for the sparsely populated region, which is increasingly dependent on tourism.

And the arrival of another major ski resort is a big boon for everyone, say officials at existing facilities. Rather than being fearful of losing customers to a new player, they believe the opening of Revelstoke Mountain Resort will shine a light on the region in general.

"There's immense competition in the travel business and anything that brings attention like Revelstoke to British Columbia is important," said Marke Dickson, marketing manager at Panorama Mountain, near Invermere, B.C., about three hours west of Calgary.

Panorama is one of eight ski areas in B.C., including Revelstoke Mountain, that have banded together to collectively market themselves under the banner of the "powder highway."

Stuart Rempel, head of marketing at Whistler-Blackcomb, which like Panorama is owned by Intrawest ULC, said ski areas take a long time to establish themselves, and B.C. destinations have to consider their competition far beyond the next mountain.

"Our major competitor," Mr. Rempel said, "is not really other ski areas. It's the beach resorts. It's Las Vegas. It's Disneyland. Those are our true competitors."

David Ebner

THE BET: $1-billion over 15 years, gambling on ever-abundant snow in remote Revelstoke, B.C.

THE BACKERS: Developers Robert Powadiuk, Hunter Milborne and Don Simpson, as well as Bob Gaglardi, owner of the Sandman hotel chain and one of Canada's richest men.

THE PAYOFF: A climate change real estate bonanza, cashing in on snow at a giant ski area when it's disappeared elsewhere

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