Intrawest Corporation

Mountain Life
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Mountain Life

The 12,300 employees of Intrawest Corp. are true believers at the Church of the Holy Demographic. Day in and out, Intrawest preaches the gospel of "recreation and revenue around the clock." Caught up in their conviction that they possess an unassailable formula for resort renaissance success, Intrawest executives cited Thomas Jefferson's "life, liberty and the pursuit of happiness" at the company's annual meeting last November as a rationale for their ski villages.

"It's so simple," says Intrawest CEO Joe Houssain, "it's like magic."

In 1998 Intrawest sold $226 million (CDN) of real estate, up from $118 million the year before and amounting to 37.5 percent of the company's revenue. Since the mid-Eighties the company has sold 4,117 residential units at its 13 wholly owned or partnership ski resorts; has 2,051 under development and another 13,129 held for future development. It plans to sell 1,700 units in the current fiscal year. Growth in real estate sales has led to growth in resort operation: While the industry has been flat, skier days rose an average of 9 percent annually over the last five years at Intrawest resorts.

This success, first demonstrated at Blackcomb in the mid-Eighties, has spawned much imitation. Intrawest seeks out resorts that have a minimum of 400,000 annual skier days, are near a sizeable city, possess a definable culture and have the potential to excel, but are deeply underutilized. Then it invests between $300 million and $500 million (at buildout) in mountain improvements, village redevelopment, warm beds and "entertainment retail" to create a sense of liveliness year-round. It develops residential property as a "revenue annuity" that will provide year-round rental income to the company.

Typically, 80 percent of residential buyers at Intrawest projects put their properties in rental pools, where they split income roughly 50/50 with the management company. Intrawest thus has a cache of "warm beds" filled with people who buy lift tickets, shop, play golf, dine and otherwise shed money.

Intrawest typically retains 15 to 20 percent of the retail space it develops for its own shops and restaurants, then leases the rest to retailers and restaurateurs who fit into a detailed plan of precisely what should go where in the village.

This model is the standard for the entire resort renaissance. "The type of real estate development we do creates a new attraction that goes beyond the skiing side of the business," says Gary Raymond, president of Intrawest's resort development group, who runs a sales staff of 300, "and we think that has been a major success of our resorts. We believe people are choosing our resorts for a lot more than the skiing."

Says CEO Houssain: "We don't consider ourselves in the ski business." This philosophy underlies the resort renaissance phenomenon. Intrawest believes aging Baby Boomers aren't content to sleep three families to a condo, ski six of seven days and eat pizza for dinner. They want a polished experience.

Baby Boomers' 72 million kids-Echo Boomers-form a cadre almost as large as the 78 million Boomers and are pushing their parents to buy mountain homes. Skiing and boarding remain as solid family activities; renaissance villages introduce some of life's finer touches into the mix by producing an experience that is both exotic and familiar.

"Vail would represent the grandfather of all pedestrian villages in North America," says Raymond. "What does Vail represent? Vail's a copy of the truly great European resorts."

Intrawest's critics say it applies a cookie-cutter approach to diverse communities. The company employs landscape architect Eldon Beck to lay out each of its villages (Beck cut his teeth designing Vail's pedestrian core), but tries to incorporate local elements. "Our modus operandi is to be able to take the experience we've got and marry it with the culture of that area," says Coyle, noting that other architects work within Beck's plan.

The firm does, however, have a formula based on small condominium units: Intrawest doesn't build large units because their affluent owners tend not to rent them, creating "cold beds" that don't generate cash (anything costing over $500,000 is rarely rented out by owners). Additionally, Intrawest units are built on the small side so that guests are likely to get out-and into nearby shops and restaurants.

For more info, contact: (888) MTN-PLAY; www.intrawest.com.

Mammoth Mountain, Calif.

Mammoth, a joint venture in which Intrawest owns 58 percent of the resort, is slated to become a $500 million project. "It's the biggest thing on our radar," says Dana Severy, the company's vice president for resort development.

At Mammoth, Intrawest saw an enormous pool of customers in the Los Angeles basin. All Intrawest properties depend on a nearby metro area: At Whistler, 80 percent of resort property buyers come from Vancouver; 65 percent of Copper's buyers are expected from Colorado's Front Range.

The company projects 95 percent of Mammoth's buyers to hail from Southern California, even though the ski area is a 5 1/2-hour drive from Los Angeles.

"You'd be amazed how many people drive up for the weekend," says Greg Ashley, Intrawest's vice president for marketing. Intrawest's strategy is to pull some Californians back to the southern Sierra resort and to capitalize on heavy summer traffic through Mammoth Lakes to Yosemite National Park. The company plans to develop 2,200 residential units and 131,000 square feet of retail space over 10 years at Mammoth's base. The first development project, Juniper Springs, was launched last April; 129 of 174 condominiums sold in the first weekend, for prices ranging from $212,000 to $950,000-about $380 per square foot.

New on-mountain amenities in the last year include an 8-passenger high-speed lift, a high-speed quad and the Panorama Gondola. The Sierra Star Golf Course-eventually the site of 1,000 residential units-is to open this spring.

Stratton, Vt.

Acquired by Intrawest in 1994, Stratton has received a $31 million on-mountain infusion since then. The base redesign now underway will add 1,300 lodging units and 30,000 square feet of retail space to the existing village, which encompasses 1,200 condos-only 100 of which are presently rented out regularly.

The "first priority" has been snow, says Michael Cobb, vice president of marketing and sales at Stratton. The result: A $15 million system that covers three-fourths of the mountain.

Late last summer, work began on refinishing the existing village. "Stratton has sort of a Bavarian architecture, which hasn't held up so well," says Justin Smart, vice president of resort development at the ski area. This is being replaced with architectural finishes and details more evocative of New England.

While the company awaits state approval for its master plan (expected this spring), it has been developing individual projects. Last April, two-thirds of the first phase of the 75-unit Long Trail House condominiums sold the day units went on the market. Buyers paid an average of $303 a square foot-$140,000 to $670,000 per unit.

"This is really the core of our real estate plan," says Smart. "We're creating a New England common, around which there will be a total of 400 units like Long Trail House."

Development of new units at Stratton-107 in 1998, 132 in 1999-is affecting the local real estate market, according to Walt Hersom, owner of Wells Real Estate in nearby Manchester Village: "It has caused a lot of the 20- and 30-year-old ski chalets that are off the mountain to go unsold. For those, there's a glut on the market." Such properties command no more today than they did a decade ago, Hersom said. A buyer can get a 20-year-old, four-bedroom chalet for "under $100,000."

Read Mountain Property: Intrawest Snapshots

8-passenger high-speed lift, a high-speed quad and the Panorama Gondola. The Sierra Star Golf Course-eventually the site of 1,000 residential units-is to open this spring.

Stratton, Vt.

Acquired by Intrawest in 1994, Stratton has received a $31 million on-mountain infusion since then. The base redesign now underway will add 1,300 lodging units and 30,000 square feet of retail space to the existing village, which encompasses 1,200 condos-only 100 of which are presently rented out regularly.

The "first priority" has been snow, says Michael Cobb, vice president of marketing and sales at Stratton. The result: A $15 million system that covers three-fourths of the mountain.

Late last summer, work began on refinishing the existing village. "Stratton has sort of a Bavarian architecture, which hasn't held up so well," says Justin Smart, vice president of resort development at the ski area. This is being replaced with architectural finishes and details more evocative of New England.

While the company awaits state approval for its master plan (expected this spring), it has been developing individual projects. Last April, two-thirds of the first phase of the 75-unit Long Trail House condominiums sold the day units went on the market. Buyers paid an average of $303 a square foot-$140,000 to $670,000 per unit.

"This is really the core of our real estate plan," says Smart. "We're creating a New England common, around which there will be a total of 400 units like Long Trail House."

Development of new units at Stratton-107 in 1998, 132 in 1999-is affecting the local real estate market, according to Walt Hersom, owner of Wells Real Estate in nearby Manchester Village: "It has caused a lot of the 20- and 30-year-old ski chalets that are off the mountain to go unsold. For those, there's a glut on the market." Such properties command no more today than they did a decade ago, Hersom said. A buyer can get a 20-year-old, four-bedroom chalet for "under $100,000."

Read Mountain Property: Intrawest Snapshots