The Intrawest Corporation
The Intrawest Corporation
Revenues: C$194.7 million (1995)
Stock Exchanges: Toronto Montreal Vancouver
SICs: 7011 Ski Lodges and Resorts
The Intrawest Corporation, based in Vancouver, British Columbia, Canada, is the fourth largest operator of ski resorts in North America. Its ski resorts, with a combined two million skier days (one skier paying for one day of skiing), include Blackcomb Mountain and Panorama Resort in British Columbia, Mont Tremblant in Quebec Province, Snowshoe Mountain Resort in West Virginia, and the Stratton Ski Resort in Vermont. In 1996, the company also purchased a 33 percent share of the Mammoth Mountain Ski Area, which included Mammoth Mountain and June Mountain, in Mammoth Lake, California. Intrawest also developed several major residential and commercial projects in Canada and Seattle, including the Gateway Urban Centre in Surrey, British Columbia; Park Plaza in Edmonton, Alberta; the Pacific Reach Business Park in Vancouver, British Columbia; and Arbor Place in Seattle. However, the company began divesting itself of non-resort-related properties in the mid-1990s. Its stated corporate strategy in 1996 was to become North America’s leading operator of mountain resorts, primarily through acquisitions in the United States.
Intrawest Properties Ltd. was formed in 1973 as a Vancouver real estate development firm by Joe Houssian, a native of Regina, Saskatchewan, with a master’s degree in business administration from the University of British Columbia. He was joined in this venture by a Lebanese cousin, Mo Paris, who had financial contacts in Europe and the Middle East. Paris would leave the company when it went public in 1991.
For the first six years, the company concentrated on residential real estate, developing 26 projects encompassing about 1,800 apartments, townhouses, and single-family homes in Vancouver, as well as in Edmonton and Calgary, Alberta. In 1979, Intrawest Properties Ltd. and Intrawest Equities Ltd. were merged to create the Intrawest Development Corporation.
Intrawest expanded into commercial real estate in 1981 when it acquired the Cedarbrae Shopping Centre, then under construction in Calgary. That was followed by development of the Glenmore Landing Shopping Centre in Calgary, completed in 1985, and the Lonsdale Quay Public Market and Hotel, a mixed-use development in North Vancouver completed in 1986. In the mid-1980s, Intrawest also expanded into the United States, completing its first major U.S. project, Arbor Place, a $28 million residential and office complex in Seattle, in 1989.
The First Resorts: Blackcomb Mountain and Mont Tremblant
In 1986, Intrawest acquired half interest in Blackcomb Skiing Enterprises, which operated a ski resort on Blackcomb Mountain at Whistler Village, British Columbia, from the Aspen Skiing Company. That entrée into the resort business would eventually change the company’s strategic focus.
Aspen Skiing, originally a partnership between 20th Century Fox and Alberta businessman Alan Graham, had formed Black-comb Skiing Enterprises and begun developing Blackcomb in conjunction with the British Columbia provincial government in 1978. The resort opened in 1980, and after a new T-bar lift was installed in 1985, boasted the greatest vertical drop in North America: 5,280 feet.
Blackcomb quickly gained popularity among skiers. But by 1986, 20th Century Fox, then owned by U.S. billionaire Marvin Davis, had decided to sell its ski operations. Hugh Smythe, a Canadian from New Westminster, British Columbia, who had been managing Blackcomb, met Joe Houssian at a Young Presidents Association dinner in Vancouver, and talked to him about purchasing the resort. Houssian, then 36, who admitted knowing practically nothing about the ski-resort business, negotiated to buy 50 percent of Blackcomb Skiing Enterprises for about $3.7 million, with an option to acquire the other 50 percent in five years for $5.8 million.
Intrawest then launched a $112 million expansion and upgrading of skiing and resort facilities at Blackcomb Mountain, adding a mountain-top restaurant and ultimately increasing resort capacity from 4,000 to 14,000 skiers per day. As a result, skier visits increased from 278,000 in 1986 to 972,000 in 1995. Blackcomb Skiing Enterprises had a management lease with the provincial government of British Columbia, which owned the mountain property, to operate the ski resort until 2029.
As part of its purchase of Blackcomb Skiing Enterprises, Intrawest also gained development rights to 118 acres at the base of the mountain, along with 8,000 “bed units” under Whistler Village’s land-use regulations. Intrawest sold several parcels of land and assigned bed units to other developers to promote immediate use of the ski resort. In 1989, Intrawest also began developing residential projects of its own on the remaining land. By 1993, the company had completed more than 1,400 “resort units.”
Intrawest went public in 1991, raising $26 million for 27 percent of the company’s equity. Later that year, the company paid an estimated $22 million to acquire Mont Tremblant Resort, Inc., which managed a four-season resort and Canada’s oldest operating ski area in the Laurentian Mountains north of Montreal, Quebec. The Mont Tremblant Resort, which had opened in 1939, included a summer beach and tennis club and 16,500 acres of mountain terrain leased from the Quebec provincial government. The lease ran through 2051.
As it did at Blackcomb, Intrawest expanded and upgraded resort facilities at Mont Tremblant, investing $48 million between 1991 and 1995, and increasing capacity from 8,500 skiers per day to 14,500. Included in the expansion were a 1,000-seat mountain top restaurant, an 18-hole golf course, and The Edge, the first new peak opened for skiing at Mont Tremblant since 1943. To help finance the expansion, Intrawest sold 23 percent of Blackcomb Skiing Enterprises to the Nippon Cable Company in Japan for $18 million.
Along with Mont Tremblant Resort, Inc., Intrawest also acquired 1,800 acres at the base of the mountain, which the company intended to develop as a $400 million, master-planned community, much like Whistler Village, including retail shops, several condominium and townhouse developments, and a full-service hotel projected to be completed by 1997. Intrawest was to have a 49 percent share of the proposed 308-room Chateau Mont Tremblant. Also in the works was Vieux Tremblant, a recreation of “old Mont Tremblant” with several renovated buildings from the 1940s. In 1994, Tremblant received Quebec’s Grand Prize for the Development of Tourism.
In 1993, the Intrawest Development Corporation officially changed its name to the Intrawest Corporation. The company also acquired its third ski resort, Panorama Resort, near Inver-mere, British Columbia, for about $7.1 million. Panorama, a family-oriented resort at the edge of the Bugaboo mountains, included a 107-room hotel, a tennis complex, and about 300 acres of land for development.
Intrawest also entered into a joint real-estate venture with Ralcorp Holdings, Inc., which owned the Keystone Resort in Keystone, Colorado, to develop a resort village called The Village at River Run. Ralcorp Holdings, a subsidiary of the Ralston Purina Company, also owned the nearby Breckenridge Ski Resort.
Intrawest entered the $4 billion vacation-club industry in 1993 by forming the Intrawest Resort Ownership Corporation, with Intrawest Resort Club members receiving an annual allotment of points that entitled them to stay at various club properties. The first Intrawest Resort Club, a 45-unit condominium development at Blackcomb Mountain, opened in 1994, and the company sold 500 memberships in the first six months. By 1996, Intrawest also had resort club facilities at Tremblant and had plans for club resorts in southern California, Hawaii, the Caribbean, Costa Rica, Mexico, and Florida.
Focusing on Resort Properties in the 1990s
Intrawest, which had retained an ownership interest in many of its larger residential and commercial developments, began divesting itself of all non-resort-related real estate in 1994, selling nearly half of its non-resort properties, including The Newmark and Belltown Court residential and retail developments in Seattle, and Station Tower, a high-rise office complex in Surrey, British Columbia, for $158 million. In 1996, Intra-west’s remaining non-resort properties consisted primarily of undeveloped land and residential projects under construction. Emphasizing its decision to become “a pure resort company,” Intrawest also reorganized into three operating divisions: the Resort Operations Group (with Smythe as president), the Resort Development Group, and the Resort Club Group.
Intrawest expanded its interest in the U.S. resort market in 1994 by acquiring the Stratton Ski Corporation, owner of the four-season Stratton Mountain Resort in southern Vermont, which included a 27-hole golf course, golf school, and sports and tennis complexes. Stratton was purchased from Victoria U.S.A., which had owned the resort since 1988.
The company followed up in 1995 by acquiring the Snowshoe Mountain Resort and the neighboring four-season Silver Creek Mountain Resort in West Virginia, which included an 18-hole golf course and 10,000 acres of land. Snowshoe, which opened in 1973, averaged 400,000 skier visits per year, making it the largest ski resort in the midatlantic and southeastern regions of the United States.
In January 1996, Intrawest announced that it had purchased a 33 percent interest in the Mammoth Mountain Ski Area, which included Mammoth Mountain and June Mountain, in Mammoth Lake, California, east of San Francisco in the Sierra Nevada mountains. With more than one million skiers annually, Mammoth was the official training center for the U.S. Olympic Ski Team, and ranked second only to the facilities at Vail, Colorado, in popularity and size.
Intrawest also acquired all the developable real estate owned by Mammoth Mountain including 92 acres at June Mountain and 14 acres in the town of Mammoth Lakes, and negotiated right of first refusal if Dave McCoy, founder, president and controlling shareholder of Mammoth Mountain, or his family decided to sell his remaining interest in the ski area. McCoy had reportedly opened Mammoth Mountain in 1938 with a portable rope tow he bought by selling his Harley Davidson motorcycle. He purchased June Mountain in 1986.
Intrawest was basing its strategy for growth on the aging Baby Boomers. In the company’s 1993 annual report, founder Joe Houssian, then president and chief executive officer, wrote, “The largest group of buyers of vacation homes is between the ages of 45 and 64. The baby boom generation, which over the past 40 years has fueled so many industries, is now emerging as a catalyst in the leisure and resort industry.” In 1994, Houssian said Intrawest’s goal was to become “the dominant player in the North American mountain resort industry of the 21st century.” Houssian, who became chairman in 1994, was the largest individual shareholder in 1996 with four percent of the company’s stock.
Mont Tremblant Resort, Inc.; 2742241 Canada Inc.; Intrawest U.S. Holdings, Inc.; Intrawest U.S.A., Inc.; Intrawest Resort Ownership Corporation; The Stratton Corporation; Blackcomb Skiing Enterprises Ltd. (96.6%); Blackcomb Skiing Enterprises Limited Partnership (77%).
“Intrawest And Its Drive To Be The Best,” Ski Magazine, October 1995.
Leidl, David, “Joe Houssian on Intrawest,” BC Business, December 1992, p. 33.
Munk, Nina, “Perfect Partners,” Forbes, May 23, 1994, p. 90.