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January 2007

What's Old is New Again

The new owner of Red Resort has both big and small plans for the area.

Written by Cindy Hirschfeld | 0 comment

At Red Mountain Resort, one of Canada’s oldest ski areas, the lifts carry skiers up the 2,900 feet of vertical at what could generously be called a leisurely pace. The abundant and unfettered expert terrain makes Red revered among skiing’s hardcore but potentially intimidating to novices. The base lodge restaurant is cafeteria-style, circa 1975, with a food selection to match. In other words, to many resort investors, Red, a five-minute drive from the town of Rossland in southeastern British Columbia, would appear ripe for a long-due makeover.

And yet Howard Katkov, principal of Red Mountain Ventures, the private investment group that purchased the resort in 2004, has other plans. “I view this as one of the last remaining pure ski resorts in North America,” he says. “We can be successful by maintaining and preserving the old and not following everyone else.”

His plans for accomplishing this, and whether Red will continue to attract enough skiers and riders who favor an undiluted ski experience over the usual resort off-slope amenities and distractions, should make the resort an interesting case study over the next decade and a half.

Katkov has two things going for him. One is his track record as a successful entrepreneur. After establishing himself as a real-estate lawyer and then developer in San Diego, Katkov started jane, a cosmetics company that he eventually sold to Estée Lauder, and helped launch dock3 Inc., a concierge-style service for corporate employees that now operates in 40 locations in the U.S.

Perhaps equally important, his vision for Red reflects his own desires as much as what he believes other skiers are looking for. Katkov, 56, first visited Red in February 2000, after hearing about the ski area for years from a friend, with the intention of finding a vacation home. “I wanted to get away from the gentrification of big resorts, and I wanted to go somewhere that wasn’t overdeveloped and was slightly off the beaten track,” he recalls. By the next day he’d purchased a lot, without even having skied at the mountain. “It was a leap of faith,” he admits, “but I loved the community.”

Three years later, when Red went on the block, Katkov took another leap of faith, from second-home owner to resort owner, “I realized that this resort needed an infusion of capital to sustain it and the community,” he says. “It was owned by six local guys who didn’t have deep pockets. The town was suffering, because there was no job creation.”

While Katkov aims to preserve the best parts of Red’s character, the resort is nonetheless poised to undergo the most dramatic changes of its century-plus history as a ski venue. As far back as 1896, the Scandinavian miners who came to work in Rossland held ski races on Red Mountain. In the 1930s local ski club members installed a rope tow and, in 1947, a chairlift, the second in Canada. Another chairlift was erected in 1965, on adjacent Granite Mountain. Strapped for capital, the all-volunteer Red Mountain Ski Club eventually sold the ski area to a local private investor in 1989.

In 2004-05, Red’s first season under Katkov, on-mountain improvements included the addition of a Magic Carpet and a six-acre terrain park. The following summer, a lift-served trail network for mountain bikers and hikers was created. For this winter, the area extensively reconfigured its parking lot (which locals have been anxious for) and renovated the base lodge. The latter is at least partial proof of Katkov’s conservation mission. “We’re redoing the lodge, not tearing it down,” he emphasizes. “There’s a lot of history and spirit in that building [the lodge’s original section dates to 1947]. We might move it someday, but we would never demolish it.”

Also on tap are eight newly cut trails, on about 100 acres already within the ski area, tailored to beginner and intermediate skiers and riders. And next year a new quad will replace the existing Silverlode lift from the base area, providing more efficient access to this terrain.

Balancing Old and New
The big question is, can Katkov develop a sustainable resort without destroying the retro feeling he wants to preserve? Doing so will require resolve.

To wit: While recognizing that Red’s core demographic is the adventure skier, and what he refers to as the “adventure family,” Katkov sees a need to accommodate a wider range of mountain users. Expanding lower-level terrain while still catering to Red’s hardcore skier base could create friction, but Katkov seems unfazed at the prospect. “We have an incredible amount of expert terrain and that won’t be impacted by the novice area,” he says.

Moreover, he says, “we have a natural filter at Red. There’s no international airport near the resort, and there are no five-star hotels.” The nearest large airports, in Spokane, Wash., and Kelowna, B.C., are three hours away by car, and the Castlegar airport, a half-hour’s drive, is at the mercy of fickle mountain weather. In other words, hordes of beginners are unlikely to descend on Red’s slopes, new terrain or not.

Red, in fact, has one of the lowest skier-to-acreage ratios among North American ski resorts. The area’s two cone-shaped peaks offer 1,585 acres of skiable terrain, and skier visits last season averaged less than a thousand per day. The resort’s permitted area actually encompasses 4,200 acres, which is now accessible to backcountry skiers but will gradually be absorbed into the ski area’s developed footprint.

Katkov aims for a long-term slow build, with 10 to 15 percent growth annually, to a total of 250,000 annual skier visits in 15 years. He’s confident those numbers can be reached, drawing a parallel to his experience in the cosmetic industry. “When [jane] started in 1994, that was a flat industry. How many people needed a new lipstick? But we took market share because we had the best product for the price.”

Real estate plays an important role in Katkov’s business plan. In spring 2007, the first resort-developed condominium properties, the 67-unit luxury-oriented Slalom Creek, are slated for completion. Sales at Slalom Creek are expected to total C$34 million; 33 units had sold by early December. Two other condo projects, of 18 units each, will follow.

Ultimate buildout will be 1,400 residential units at the base. Sotheby’s International Realty recently signed on to exclusively represent Red properties worldwide, a deal that Katkov terms a “third-party validation of our value proposition.”

To charges from local critics that he invested in Red solely for the real estate development opportunities, Katkov counters, “The cold truth is that this model just does not work without a real estate component. I made that very clear to the town before I bought the resort, so no one can accuse me of hiding behind the obvious. People who know me know how passionate I am about skiing.”

Still, how is this different from other resorts? For one, planned commercial space at the base area will encompass just 70,000 square feet, and 30,000 of that, according to Katkov, will be taken up by the day lodge and skier services. “We’ve engaged this community,” he notes. “We want to make sure we don’t compete with it.” And that’s the trick: building the bed base without gentrifying the community.

A second part of the answer lies in one of the more ambitious undertakings this season, the debut of the Mountain Project. Erik Kalacis, Red’s vice president of sales and marketing, describes this as a “marketing platform to promote the diversity of the mountain experience that brings together design, lifestyle, equipment, education, and events.” In simpler terms: teaching guests to appreciate (and participate in) natural mountain recreational opportunities.

The first expression of this goal is an activity center based in a newly-built, 800-square-foot log cabin at the base area. The center has a European-style guides bureau at its hub, through which guests can book everything from backcountry tours to telemark lessons, as well as a lounge, conference room, and tea bar. In addition, a local woodcarver (who’s also an avid snowboarder) will work in an outside “studio” this winter, adjacent to the cabin.

Partners so far include K2 and Da Kine, whose equipment will be available for rental, an Australian wool-marketing consortium, and W.L. Gore. Details of how these companies will connect with consumers in a way that “celebrates the values of the mountain lifestyle,” as Kalacis puts it, are still evolving; possibilities include gear and apparel demos and using the Mountain Project as a venue for manufacturers to brainstorm ideas and test product.

How sincere is Katkov is about retaining Red’s character—and that of nearby Rossland as well? Despite some uneasiness, the Rossland community in general supports the resort’s revitalization. For his part, Katkov says, “I’m sensitive to my relationship with the town. I view myself as a caretaker of their amenity.” And, really, it’s hard to doubt him and his team when he asserts, “We have passion. There’s no gimmick to that.”

If nothing else, credit Katkov for exploring new avenues for exposing visiting skiers to the mountain lifestyle. “His willingness to take a completely different approach to how to roll out and develop your resort is very rare for a resort owner,” says Robert Bernthal, who through his marketing firm the Rhizome Company has helped spearhead the Mountain Project. “His approach is a little more holistic.”

And though longtime locals may well scoff at the need to package the experience, “we believe it will change the way people think about going into the mountains, that it’s not just for the hardcores,” Bernthal adds.

Is that belief well founded? That’s the big unanswered question.