Olympics

New York investment firm plans to take Whistler Blackcomb public

Resort suffered ‘adverse effect’ on skier visits because of the 2010 Olympics, company says

 
By Brian Morton, Vancouver Sun October 12, 2010
 
 

New York based-Fortress Investment Group plans to turn Whistler Blackcomb into a public company after losing an estimated $6.2 million because of the 2010 Winter Olympic Games.

In a preliminary prospectus filed Friday with securities commissions across Canada, a new company called Whistler Blackcomb Holdings Inc. will issue an unspecified number of shares at a yet-to-be determined price.

Details as to price and number of shares are regularly omitted in preliminary prospectuses and are set only after interest from potential shareholders can be gauged.

Whistler Blackcomb chief financial officer Kevin Smith refused to speak about the matter Monday, saying in an e-mail: “Given that we are in the IPO [initial public offering] process, we are not able to comment.”

The Vancouver Sun did not hear back Monday from Fortress managing director Gordon Runte.

Bruce Moore, managing director of CIBC World Markets, one of the underwriters, also refused to comment on the Fortress plan.

Whistler Blackcomb, the largest and most-visited mountain resort in North America has been saddled with debt ever since Fortress acquired Intrawest in 2006 for $2.8 billion US.

Fortress renegotiated its debt earlier this year and avoided having the facility auctioned off during the Olympics.

Fortress noted in the prospectus that the resort generated revenue of $218.7 million in fiscal 2009, including $104 million from lift operations, $40 million from retail/rental operations and $11.8 million from real estate.

In the prospectus, Fortress estimates that, despite excellent snow conditions in the 2009-10 season, “visitor aversion” related to the Olympics cost the resort $6.2 million Cdn.

But it noted that hosting the Olympics resulted in a dramatic increase in global awareness, including an increase in awareness from 19 per cent to 42 per cent in Germany and from 32 per cent to 45 per cent in the U.K.

In June, there were reports that Fortress was exploring the possibility of selling Whistler Blackcomb to Russian billionaire Vladimir Potanin.

According to a Wall Street Journal article, Potanin, the main shareholder of metals giant OAO Norilsk Nickel, expressed an interest in the resort.

His investment vehicle, Interros Co., is building a new ski resort in Sochi, Russia, home of the 2014 Olympic Games.

A survey in August concluded that the hotel occupancy rate to the end of June was lower than the recession-plagued 2009.

bmorton@vancouversun.com

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Trying to gauge the ‘Olympic effect’ on Whistler property sales

By Derrick Penner, Vancouver SunJanuary 30, 2010
 
 Let the sales pitch begin.

With the 2010 Olympics at Vancouver and Whistler’s doorstep, one local real estate insider has crunched a decade’s-worth of Whistler sales results to make the case that the 2010 Olympics have given the resort’s real estate a boost.

“I still think there will be a good, positive side to the Whistler story,” Rudy Nielsen, president of research firm Landcor Data Corp., said in an interview.

Nielsen chronicles a doubling of Whistler’s property values and widening sphere of international buyers there over the last decade to support his case.

“I think people will realize that this is a world-class place to be, and not only Whistler but Vancouver and British Columbia,” he said.

Landcor, in a report released this week, has compiled a list of trends from examining the resort community’s sales as recorded by the B.C. Land Titles office. Between 2000 and 2010, with the 2008 financial crisis that dented markets everywhere notwithstanding, Whistler saw 8,990 property sales among the 13,134 residential properties within the resort.

And the Landcor data records dramatic price increases over the decade, with a lot of the gains coming in the first half of the decade. The average price for a condominium rose 101 per cent over the decade to $380,000 by 2010. Town house average values increased 104 per cent to $677,000 and

detached homes saw the biggest gain rising 141 per cent to hit an average of almost $1.4 million in 2010.

In Whistler right now, Lisa Bjornson, general manager of the Whistler Real Estate Co., said it is difficult to tell if the Olympics are having an effect on the market, but there is an assumption they will.

Bjornson said the community’s real estate counterparts in Park City, Utah, host of alpine events for the 2002 Salt Lake Olympics, told them sales would dry up in the three months leading up to and three months following the Games, but agents have been making sales.

“We just don’t know who, if anybody, is buying after the Games as a result of the exposure yet,” Bjornson said. “We just know that a lot of people are going to be here.”

However, University of B.C. real estate expert Tsur Somerville expects that the gains Whistler is seeing come more from the improved Sea to Sky Highway and not the additional exposure.

“I’m not saying it’s zero,” Somerville said in an interview, but he is skeptical that the Games will give Whistler better exposure to the market of buyers likely to buy ski-resort property than it has already had.

Somerville, director of the centre for urban economics and real estate at the Sauder School of Business at UBC, released a report, co-authored with Jake Wetzel, on the effects that staging Olympics have had on property prices host cities. They found that being an Olympic host city did not bump property prices up any more than surrounding, non-host locations.

Any gains, Somerville said, were more attributable to general economic conditions that were shared by non-host regions, or as a result of infrastructure improvements independent of the Games.

depenner@vancouversun.com

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