Howard Katkov clicks out of his skis for a quick uphill walk to Grey Mountain's peak. It is -22, clear, and the snow sits so thick on the mountains' trees that they look like giant chubby ghosts. Nothing but snow and sunshine cover the summit. Here, Mr. Katkov sees what others do not: a restaurant and private clubhouse.
It is part of his imaginative expansion plans for Red Mountain Resort, and he's asking others to pay for it. The capital won't come thanks to lift tickets, hot-chocolate revenue, or private-equity investments, but through crowdfunding, targeting everyone from ski bums with duct tape holding their mitts together to wealthy elites who don't understand why their low-rent counterparts don't just buy new mitts.
The campaign's slogan – "Fight The Man. Own The Mountain" – aligns with the anti-corporate attitude locals in ski towns tend to adopt. Rossland, in the Monashees, fits into that category.
"Who's the man? To me, the man is Big Corporate," Mr. Katkov, Red's chief executive, says as he warms up by a woodstove fireplace in a ski-patrol shack on Grey. Mega-resorts, he says, are only concerned about shareholders. Lift lines and spas are poisoning ski areas. "That's not skiing. That's the gong show."
Red is playing on ski culture's habit of resisting change. Skiing and snowboarding, Red warns in its marketing material, risk becoming "pursuits for the elite like polo or Formula 1."
The pitch highlights Vail Resorts Inc.'s $1.4-billion takeover of Whistler Blackcomb Holdings Inc. last August. And while Red does not explicitly criticize Resorts of the Canadian Rockies, which owns four competing resorts in Alberta and B.C. and two more in Quebec, snow fans who whine about corporations frequently paint RCR as the boogeyman of skiing. Wealthy business professionals own Sunshine Village near Banff and another former oilman controls Lake Louise Ski Resort, two playgrounds with significant international traffic.
But no matter how much Mr. Katkov insists the goal is to keep Red local and fend off outfits such as RCR and Vail, expansion and attracting more skiers and riders remains the purpose.
Red Mountain Resort.
Ryan Flett/The Globe and Mail
There is a smattering of community-owned ski operations in North America, but they tend to be small joints just happy to keep afloat. Red has, indeed, struggled at times, but this marketing campaign will never give it co-op cred such as Mount Cain on Vancouver Island, Wapiti Ski Club near Elkford, B.C., Shames Mountain near Terrace, B.C., Mt. Timothy at Lac La Hache, B.C., or Pass Powderkeg in Alberta's Crowsnest Pass. Red's crowdfunding participants will not have a representative on the board. No one expects them to paint the picnic tables at a volunteer work bee.
Further, Red's current private-ownership group, including Mr. Katkov, cannot divorce themselves from big business. Mr. Katkov, for example, was a real estate player in San Diego County in the 1980s, building about 3,000 homes and apartments.
Then he founded Jane, a makeup company, and later sold the parent company to Estée Lauder in 1997 for about $60-million (U.S). Now he lives in Rossland and Solana Beach, Calif. (He will not disclose what he and other investors paid for Red when they purchased it.)
Red's crowdfunding pitch, while perplexing locals, has caught on. It launched the effort in August, hoping to raise $10-million. So far, 3,092 people have pledged more than $11-million, although the initial campaign is to survey interest rather than write cheques, more of a promise ring than a wedding band. Now, Red's American CEO needs to find out if those who signed up online will make good on their non-binding nod. Mr. Katkov reckons he needs about $6-million to finance his expansion plan, ranging from the imagined clubhouse at Grey's summit to remodelling an existing mid-mountain lodge.
"This is an experiment," Mr. Katkov says. "This is unknown territory. It has never been done before."
The plan calls for a public restaurant and private clubhouse for the new investors on the top of Grey; six overnight cabins perhaps near the top of Grey; a remodelled mid-mountain Paradise lodge; expanded catskiing on Mount Kirkup, which abuts Grey; construction of hiking and biking trails for summer fun; and the creation of an annual local academic scholarship fund. The clubhouse, cabins, and Paradise lodge are on the top of the to-do list. The summer infrastructure would give it an edge as big ski resorts search for ways to diversify in the face of climate change.
Red deploys dude lingo, calling the campaign a "killer investment" and dubbing the investments "shred equity." Participants will own everything from the chairlifts to "that one tree your buddy relieved himself on last winter. Every asset we've got, man."
The pitch is part of Red's in-house marketing campaign, complete with a comprehensive website, slick videos, and catchy updates. The idea alone has made the campaign worth it given the scads of free press and buzz it is generating.
But the campaign confuses Red's regulars. A few, reluctant to give their names because, well, they are regulars, say they do not feel like Red has explained the purpose behind the project. Red recently expanded, after all, by putting a chairlift on Grey. A new hotel is under construction.
And the investment deal isn't as simple as Red makes it out to be.
Potential shareholders are not investing in the hotel that is under construction because others own it. It is not yet clear how the crowdfunders would be treated if Red sold itself. It is possible, one day, investors may actually make money as they would in the stock market, but perhaps that is a stretch.
Instead, Red is enticing potential investors with a reward system containing six tiers: Chip in $1,000, for example, and get access to the clubhouse and five transferable lift tickets good for five years. Pony up $25,000 – the top of the reward ladder – and get a five-year family season's pass or two seven-year passes; two pairs of custom skis or snowboards; 10 transferable adult lift tickets good for five years; priority booking the cabins on Grey; and access to the private clubhouse. These goodies, Mr. Katkov points out, translate to a return on investment.
Brian Pow is a vice-president at Calgary's Acumen Capital Partners, a financial firm. He has a warning for potential investors. Do it to say you did. Do it for the custom skis. Do it for the lift tickets. But don't do it to get rich.
"They're selling a lifestyle. That's how people should think of it," Mr. Pow, who once invested in a catskiing operation, says. "I wouldn't throw a lot of your nest egg into it."
Indeed, Red's cuddly crowdfunding campaign is still a corporate transaction with cross-border regulations involving stacks of complex financial documents. Red must file documents with the U.S. Securities and Exchange Commission. Canadian securities regulators will be involved.
The private-ownership group will have to open its books, provide details on share structure, and other corporate details. "That's what people need to understand," Mr. Pow says.
Dave Townsend and two pals came from Australia for a one-month ski adventure, hitting Red in early January. They buy into the keep-it-local angle and are not bothered by the idea that the folks who once paid millions to buy Red are now asking average patrons to cover expansion costs.
"I think it is a great idea that big companies aren't going to take it over," Mr. Townsend says over a pitcher of beer at Rafters, Red's gritty-in-a-good-way après-ski pub. "I actually thought about investing to help."
Even Rafters is part of Mr. Katkov's pitch to woo the hometown crowd. Locals were horrified when Red planned to renovate the base lodge, which hosts Rafters. For decades, Red's regulars have stored their skis in banged-up yellow, red, blue, and green wooden lockers in the basement, loving their quaint fire hazard. In the pub, they had decorated the walls with pictures of loved ones skiing and goofing off. When Red renovated, it kept the old-school lockers (and installed sprinklers) and when Rafters was ready to reopen, it returned the old pictures to their original spots. Red argues this commitment to preserving the mountain's 112-year history should allay concerns that the makeover tied to the crowdfunding campaign will trash its small-town vibe.
And then there is Trail, a town of about 7,000 people, best known for its smelter, and about 15 kilometres away from Red. Trail's tiny airport, Mr. Katkov hopes, will soon allow for more traffic.
"That's what's going to blow this place up," Mr. Katkov says of Trail's potential.
Then he catches himself. An explosion of skiers runs against Red's keep-it-cozy pitch. "But we don't want to blow this place up."