The Wintertime Fall of Intrawest

There’s been quite a bit of hand wringing and gnashing of teeth regarding the fact that Whistler and Blackcomb resorts, the sites for the upcoming Olympics, may be involved in a different kind of competition this month.

Banks who hold a ton of debt for Intrawest, owner of the resorts, are getting pretty antsy about repayment problems and so are threatening to capitalize on all that Olympic publicity by putting it on the auction block during the Olympics.

Maybe it’s just a publicity stunt to generate some interest among potential buyers. Or maybe it’s an attempt to spur Fortress Investment Group, which bought out Intrawest for $2.8 billion in 2006 (and weighted it down with $1.5-billion in debt), to start paying back some of it back.   

Whatever, the damage to a once-proud BC business and entrepreneurial story is already done.

Like a good predator, Fortress moved in after Intrawest overextended itself by buying up a bunch of resorts in the previous 10 years. Founded by CEO Joe Houssian in the 1970s, who retired after the buyout,  Intrawest was always a swashbuckling sort of real-estate focused entrepreneurial operation.

It’s MO was to continually hunt for opportunities – or at least it was until it was eaten up by the much bigger New-York based Fortress.

Unfortunately, the company has had a revolving door of management ever since, and has hurt further by last year’s economic slowdown  which impacted lift passes and resort condominiums around the world.

Certainly, Fortress was integrating the many aspects of the company into a focused, well-managed operation that was more suited to its size than the seat-of-the-pants style of entrepreneurship of the Houssian years.

But it also was a Wall Street private investment fund, with all the dangers that brings. Those dangers were realized when investors ran for the hills after the big Wall Street crash in 2008. Bankers who were backing Fortress eventually lost patience with Fortress’ inability to pay down Intrawest loans, and started foreclosure proceedings.

Maybe the auction will happen, and maybe it won’t.  But I don’t particularly care about the effect on the Olympics.

I’m more concerned that a BC-based business that was once-dominant in the resort industry has apparently become just another “asset” to be haggled over by lenders and owners.

I’m also concerned that it will be passed around like a football as everybody involved tries to extricate every last cent from their own blundering.

Forget the gold and silver of the Olympics. These guys are playing a far different and much meaner game.