Monday July 28, 2014





Foreign Exchange: Sun Peaks investment part of maturing of city economy

Murray Mitchell

Jen Farough, daughter Anikka, 6, and Mike Farough pose for a picture while enjoying a weekend at Sun Peaks Resort. Daughter Ashtyn, 9, was taking a ski lesson.

Sun Peaks celebrates its 50th anniversary this season. This is the second in a two-part series highlighting some of the history of the development of the ski resort.

There is no bigger or better example of the power of globalization on the economy of the Thompson region than Nippon Cable Co.’s investment at Tod Mountain.

The purchase by the privately held Japanese company of a historical ski hill in B.C.’s Interior — a hill that struggled financially through a succession of owners — ignited what would become $750 million worth of development a mere 45 minutes from downtown Kamloops.

That investment, starting with Nippon’s purchase of mountain tenure and development rights in 1992, 31 years after it opened, came at a key time for the region’s economy.

Seed capital to build lifts and create a master plan would encourage hoteliers and housing developers to put money into the resort, creating million-dollar homes, jobs and result in thousands of new tourists from Europe and Asia coming here each year.

Resort spending diversified Kamloops’ economy, helping shield the city from the shock of closure of Weyerhaeuser’s Kamloops sawmill, shut down of Teck’s original Afton project and the Convergys call centre, to name a few of the biggest that would fall in the intervening years.

While investment at New Afton and Highland Valley Copper dwarfs Nippon Cable’s investment, those companies are
Canadian.

“The biggest reason (for investment) was the potential,” said Sun Peaks Corp. vice-president and general manager Darcy Alexander.

“The Coquihalla was just built in ’87 and it opened up the Interior. The population in the Interior was growing. It had good economic prospects. The attraction of Tod was its ability to serve everyone, from beginners to experts.”

At its peak, the mountain sees about 1,300 people working on the hill, including part-timers, seasonal workers and volunteers.

The mountain is dominated by the corporation, which has a statutory seat on the resort municipality’s council. Its master plan sets out the future of development in a detailed way that municipalities typically lack.

The “corporation,” as its known on the hill, remains dominant. But Christopher Nicolson, president of Tourism Sun Peaks and one of the original key staffers on the mountain, noted there are now 83 businesses registered with the association. Most of those owners are resident.

Those businesses range from construction firms to hotels, cafes and property management companies.

“It’s diversified,” Nicolson said. “There’s been a shift in the past five or 10 years. You might have had a similar number of services with construction before, but they were based elsewhere.”

Among the original small businesses now part of the 18-year-old Sun Peaks is Bolacco Café, which set up in the Coast
Sundance Lodge in 1996.

“There was nothing here,” said Konrad Glowczynski, who co-owns the lodge along with his wife, Elizabeth.

Konrad, originally from Poland, lived in Italy and Vancouver before coming to what was largely an unknown mountain in the B.C. Interior. And like many who move to a ski resort, it was about lifestyle rather than money.

“It was a struggle in 1996,” he acknowledged.

Today, winters are busy in the peak season and August is also a good month. But Glowczynski said he and other restaurateurs would like to see more business during non-peak times, particularly during week days.

“I don’t downhill anymore,” said Glowczynski, who raised three children on the mountain. “I cross-country. I came here, not for the business, but the lifestyle.”

Alexander’s goal to increase and spread out traffic is the same, something he is confident will occur in time.

Today the resort has about 7,500 beds — a remarkable growth story considering it started from just a handful of residences on Tod Mountain.

Veteran Kamloops hotelier Tim Rodgers said the resort has undoubtedly been good for the city, but not for its hotel industry.

Before there was nightly accommodation on Tod Mountain, Kamloops hotels offered packages to out-of-town skiers. Skier visits at one hotel reached about 1,200 a year.

“Now I’m lucky if I get 10 a year,” said the Best Western Plus manager.

Sun Peaks also draws tourists who would otherwise stop in the city.

“They’re definitely a competitor,” Rodgers said. “In summer they have low rates and we lose buses. (But) for the city, it’s a huge economic gain.”

One of the biggest benefits citywide is service by WestJet from Calgary and Vancouver, something Rodgers said wouldn’t be here without the skiers that Sun Peaks attracts.

The resort is part way through phase 2 of its master plan, which anticipates 24,000 beds at build out. That will be accompanied by a second village site and more lifts on the mountain.

“For the first 15 to 18 years it rolled along just as we thought,” said Alexander, who managed the resort from Day 1, after starting with Nippon Cable at a Kelowna golf resort several years earlier.

“The recent downturn has really slowed things from a timing perspective.”

Despite that slowdown and shaken faith from the United States market in real estate investments, Alexander said the resort has grown to a place where it is sustainable.

As it is, Sun Peaks can brag on several fronts, including status of Delta Sun Peaks as the only four-diamond hotel in the area, creation of a resort municipality and presence of 11 lifts accessing 1,500 hectares of terrain.

“We have one of the bigger ski resorts in B.C. and Canada in terrain,” Alexander said. “Are we at a critical mass? Yes…. We don’t need to grow to be successful at this stage.”


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