Northwest Arkansas Democrat-Gazette
Canadian ski resort crowdfunding to snub corporate takeovers
A tiny Canadian ski resort forged by Scandinavian miners chasing an 1890s gold rush has become the unlikely recipient of a record equity crowdfunding raise, tapping into powder hounds’ quest to fend off a wave of consolidation led by Vail Resorts.
Investors are lining up to buy a piece of Red Mountain Resort in Rossland, British Columbia, drawn by its rebellious pitch of “Fight the Man, Own the Mountain.” The webbased campaign, the first by a ski resort, appears to have struck a chord with skiers anxious about a flurry of acquisitions that has put 39 resorts in the hands of just three corporations.
“Consolidation sometimes has the potential of stripping the soul and heritage out of these old-school resorts,” says Howard Katkov, chief executive officer of Red Mountain Ventures, who has publicly taken jibes at the purposebuilt villages and ubiquitous clock towers found at resorts such as Vail and Whistler Blackcomb. “It’s about preserving what we consider an endangered species.” Vail didn’t immediately respond to a request for comment.
On the first day of its Canadian fundraising in August, Red drew pledges for $394,000, the largest singleday amount for an equity crowdfunding campaign in the nation, according to Sean Burke, chief operating officer of FrontFundr, the online investment platform in Canada. As of last week, it had raised $355,132 with an additional $414,250 in process.
Ahead of its U.S. launch, it had received more than 3,500 reservations for as much as $13.3 million — 12 times the annual maximum permitted under U.S. regulations. The campaign is set to close Dec. 1 and has set a minimum target of $1.17 million for the offering to close.
Red has more to offer than hype.
Western Canada’s oldest ski resort is legendary for steep, long runs that have groomed national team racers and Olympic champions, including Nancy Greene and Kerrin Lee-Gartner. Located in eastern British Columbia’s Kootenay Rockies, just miles from the Washington and Montana borders, it boasts 300 inches of snow a year that’s dry and light.
Red’s fabled roots stretch back to Norwegian miner Olaus Jeldness, who arrived in the area in 1896 following the discovery of a massive vein of ore on Red mountain named Le Roi. Jeldness, who’d set a world record by ski jumping 92 feet at the age of 15
in his homeland, enthralled local townspeople hurtling down the hill on 10-foot long wooden skis with only a single leather strap to hold them in place. Within a year, he organized Canada’s first ski race — a 1.5 mile free-for-all from the summit, beating his lone rival by five minutes.
“The beauty of Red is that we have Rossland, a real, historic, gold rush-era town at
the bottom of the hill,” Katkov says. That town at its peak teemed with 7,000 people, 42 saloons, and the likes of “Popcorn Kate” and “Scrap Iron Nelly,” according to historical records at the local museum. Rossland’s one main street has preserved the architecture of that era but now sports a sushi restaurant, a trendy cafe and a gourmet supermarket.
“It’s this little gem of a place that no one really knows about,” says Jason Davies, a 45-year-old British snowboarder who invested in Red
and has visited slopes all over North America and Europe.
“I can still find pockets of untracked snow 10 days after a blizzard,” Davies says. Of course, one can also experience that at Colorado’s Silverton Mountain — by renting out the whole hill for $14,000 per day, the latest trend among the wealthy jet set seeking to escape crowds at the big resorts.
Crowdfunding investments in Red are tiered from as low as $780 up to $19,500. Along with the shares come
perks such as free lift tickets, custom-designed skis and, for those in the top tiers, free overnight stays in new mountain cabins to be built by the money that’s raised.
Red in recent years has worked to expand its offeraings for beginner and intermediate skiers and to upgrade infrastructure to appeal to a broader clientele. This season, a renovated mountain-side lodge reopens with heated flush toilets, a gleaming new kitchen and expanded seating. At its base, a Texas developer
is building a 106-room luxury boutique hotel. The Josie is set to open in late January just steps from the chairlift, featuring a head chef nabbed from one of Canada’s top restaurants.
On a recent conference call with potential investors, Katkov parried a question about whether such luxury could alienate the resort’s core base. Plans are also in the works for a 92-bed youth hostel that would offer what Katkov calls “the young dirtbag skier” a place for $31 a night
that’s a two-minute walk to the chairlift.
On average, Red’s 4,200 acres of terrain gets 150,000 visitors a season; Whistler Blackcomb’s 8,171 acres, north of Vancouver, attracts about 2 million people.
“Vail is speaking to a certain demographic, I’m speaking to a different one,” Katkov says. “The Whistlers, Vails, Jackson Holes, they’re catering to the 1 percent. There’s nothing wrong with that, but a young family can’t go to those resorts.”