Diversifying the base
Whistler may be learning from Bre-X and Doug the squirrel
By G.D. Maxwell
Last February, at the end of a Whistler day when all the locals and all the tourists marvelled at how sunny and warm a February day could be in the Coast Mountains, I was eavesdropping on an animated conversation unfolding après at Dusty’s. The red-faced gentleman doing most of the talking was trumpeting his investment acumen to his buddy, whose main role in the conversation seemed to be to start sentences his friend could interrupt.
He spoke in long, breathy bursts of words, like a revival tent preacher. Sharing the fervour of conversion common in those settings, he laid out the story of how he’d been tipped off to Bre-X, the Canadian gold mining wunderkind. Of how he’d already made millions off its meteoric rise in the investment world. Of how he’d dabbled at first, waded a bit, then plunged in with wild abandon, sinking not only his discretionary funds but virtually his entire RRSP into the golden goose. Of how it was a sure thing with maybe 90 million — or was it trillion — ounces of gold reserves in its Busang find. Of how he felt it was his mission to get his buddy in the money as well, after all, if they were going to spend their golden years doing the wild and crazy things they wanted to do, he didn’t want to carry some sandbagger along who was trying to live on Canada Pension.
Obviously, I don’t know what happened to that gentleman later in the spring of this year. Right now, I’d imagine he’s either fabulously wealthy and a completely intolerable "expert" or simply older and wiser and not nearly as dismissive of the benefits of Canada Pension as he was last February. Bre-X cratered in the smoke and acrimony of massive fraud. Innumerable people lost what financial pros call a bundle. Some, maybe the man at the bar, lost everything.
The ones who got burned badly by Bre-X had lost sight of the benefits of diversification.
Diversification operates at all levels to reduce risk. It is such an ingrained behaviour, in most animals, one might suspect there is a diversification gene grafted somewhere onto the double helix of life. Doug, the squirrel in my back yard, for example, scurries frantically about this time of year to hide food in seven or eight stashes around his turf. His puny squirrel brain knows it’s not safe to have all his winter’s food in one place.
Just like squirrels, businesses and towns seek to diversify as well. Whistler could be a great ski hill and Blackcomb could be a great ski hill but together, they wouldn’t amount to a hill of beans if they weren’t diversified into non-skiing activities like retail, food and beverage, and real estate. And you haven’t had to live here very long to remember the conscious effort expended by the municipality to encourage diversifying the resort beyond just skiing, to build tennis facilities, golf courses, bike trails and other amenities to lure visitors in the summertime, when the livin’s easy.
Having reached the point where Whistler Resort is no longer just a ski town but a burgeoning, year-round resort, what next? Right now, Whistler’s a two trick pony: tourism and construction. With construction entering the final act of its play — building up to building out — it won’t be long before our pony’s down to one trick and one trick only. What will we do with upwards of 1,500 residents who make their living from building? How many will move away to the next boom town? Will their exodus finally solve our housing problem?
As one-industry towns go, Whistler’s in an enviable position. Our plant doesn’t process fish that are rapidly disappearing. We don’t mill lumber that’s getting harder and harder to cut down without beheading a protester. Our crops don’t fail.
But just suppose a cosmic confluence of forces were to merge in time and space and something like this scenario were to play out. In the epic battle of Christianity versus Paganism, suppose El Niño manages to kick Ullr’s butt and this is the year of mild temperatures and not much snow. Unlikely, but we’re supposing here. Suppose we can’t get the World Cup off again this year with its ambitious end of November schedule and suppose the reason for cancelling it is not too much snow, but not enough snow. Suppose the cameras of the world capture the glory of Whistler basking in balmy autumn temperatures, the lower runs still green with grass.
Would people considering a ski vacation, but postponing that decision until they see what kind of havoc El Niño brings, look at those late November pictures and say to themselves, "Oh boy, let’s go to Whistler."? Especially after they’ve seen the pictures this month of Denver’s airport closed down because of a monster snow storm?
With the anguished cries of established businesses already worried about newcomers opening condos, restaurants, bars and retail shops, creating a pie with increasingly smaller slices for everyone, the outcome of our supposed scenario would likely be a rush to buy paper to put up on the inside of windows of closed businesses. Soft openings. Laid off staff. Not much in the way of traffic woes.
I’m not suggesting this scenario is the most probable one to play out this year. If I were a man given to betting, I’d bet against it. If I were a man given to prayer, I’d be kneeling. But I’m a man given to asking a lot of "What if" questions and wondering what the future might be like and how we might prepare for any given future.
Which is why I went to talk to Calvin Winter. In addition to owning what may be the least Whistler-like business in the valley, Calvin is also heading up an Economic Diversification committee of the local Chamber of Commerce. According to Calvin, the committee, several years into its existence, "...has a mandate to look at what opportunities there are for expanding the economic base of Whistler and specifically, to try and diversify away from straight tourism."
The committee’s approach to diversification is about as broad as it can be. If you view the local economy as a three-legged stool, with tourism and construction being the historic legs, everything else represents the third, diversifying leg. "That includes services for the first two categories and services for the permanent population, which is growing, and businesses which are totally diversified out of the local area such as Quantum, my business, which is exporting worldwide," Calvin explained.
"When we talk about diversification, we have to recognize, first of all, it’s already happening. We already have more and more businesses in Whistler that don’t depend directly on tourism. Some of the businesses are in an industrial setting — Function Junction — and a lot of the businesses are people working out of their own homes, doing design work for example, or a stockbroker who comes up and spends three days here instead of just a two day weekend," he said.
The immediate goals of the committee are twofold: the preparation of a brochure describing Whistler as an attractive place for business, and consciousness raising within the municipality and the general population about the benefits of economic diversification.
"We would like to make the muni staff aware of the advantages of economic diversification and to encourage (them) to be proactive in talking to prospective new businesses, not simply to say ‘Well, here are the rules, if you are within these rules we’ll continue your license application.’ But rather to be proactive and say, ‘Well, we’d like to encourage this type of activity in Whistler. Can we help you?’" is how Calvin explained it.
Having posed the question in muni hall myself, it would look as though there’s a long way to go. I found out about the licensing process, the possible need to get approval from the Planning and Building departments, and, well, that’s about it. In response to my question of whether there was anyone who could help me with getting insight into the more qualitative aspects of doing business in Whistler, I was referred to the Chamber of Commerce.
So with economic diversification being off the radar screen at muni hall and the Chamber’s efforts moving forward, what does the future hold for diversifying Whistler’s economy? To understand the future, it’s often helpful to look at the past. What’s the story behind some of the non-tourist businesses already working here? Why Whistler?
Calvin was, again, a good place to start. His business, Quantum Technology Corp., is about as far removed from life in Whistler as you can get. Started 16 years ago by Calvin and another graduate student from Simon Fraser University, and moved to Whistler almost four years ago, Quantum designs and manufactures scientific instruments and management systems for low temperature equipment. Very low temperature equipment.
"All the work we do is in the specific market of low temperature equipment used primarily in superconducting magnets and sometimes for cooling experiments. The superconducting magnets themselves are used for all sorts of different applications like materials property research, research in energy storage systems, research on fusion energy, and magnetic resonance imaging systems for hospitals," he said. "For an MRI, for example, we provide the cryogenic cooling system that provides liquid helium to keep the magnet cold. It’s a small, $100,000 addition to a $2 million machine."
Why move the business from Surrey to Whistler? "Well, given the opportunity to locate the business anywhere, because there are good courier services, because there are good Internet services, why not put it in Whistler?" he said. "When the customers came before, in Surrey, they came to visit us and on the weekend they’d go to Whistler. Now, we just save them the trouble."
Quantum employs about half a dozen people, scientists, engineers and managers. Like other businesses I spoke with, it has some difficulty finding qualified people in the local market and often, bringing people in from the outside is an uphill battle against the high cost of housing and slim pickings in the rental market.
Housing isn’t always a problem though. Sometimes, it’s a major part of the reason a new business opens in town. At least it was for Dr. Karen Smith. Like other professionals, when Karen moved to Whistler in 1984, a big part of practicing her profession — optometry — involved commuting daily to the city, in this case, North Delta. The logistics of child care and the grind of the Sea To Sky Highway conspired, after the birth of her second child in 1993, to force a decision she’d been moving toward for a number of years.
"I felt if I was going to live somewhere, I wanted to be part of the community as far as participating in the field I’d studied for," she explained. For several years, she shared space with an accountant and engineer above the Pharmasave in the village, working part-time in Whistler and reducing her commute to just several days a week. Days away from the birth of her first child, she had to relocate her Whistler practice to the suite in her house, where she ran it for five years.
In April of 1996, she and Dr. Donna Mockler opened their shared practice in Marketplace. Donna’s story was similar: a home in Whistler, a practice in the city and a desire to be part of the community. And although Donna still makes the trek to the city, their joint practice is rapidly growing toward being the equivalent of a full-time one.
"Now we’re open four days a week and as demand increases, we’ll expand our hours. Practicing in Whistler is what we’d both like to do. It’s a more relaxed atmosphere, more one-on-one relationships as far as dealing with patients here as opposed to a city environment. A nice balance," Karen said.
One person really glad to see Karen set up shop in Marketplace was her husband, Dave Williamson. His own business, GeoAlpine Environmental Consulting, needed the space her practice took up in their house.
"I was working out of the upstairs — just me — and the business was growing. I’d been talking to Ethan for a while, and he decided to join me. Then Mike showed up one day and said, ‘I hate the city, I want to move up here.’ I’d made the decision, the next guy who walks through the door, I’ll hire. That was it. I told Karen she’d have to leave," is how he told the story.
GeoAlpine’s business embraces all aspects of environmental consulting, from doing assessments and impact statements to compiling environmental inventories of land parcels and determining areas of least impact for future development. "We probably do 80 per cent of the assessments in the valley," he said.
But through working relationships and word of mouth, GeoAlpine has developed a significant reputation as top-notch environmental consultants on big, recreational projects. Current projects include proposed golf courses at Silver Star and Big White, expansion plans for Red Mountain and Panorama, and a ski hill project in Blue River among others. "Last year probably 80 per cent of what we did was outside of Whistler," Dave said. "This year, we’re doing a bit more in Whistler because the change in development rules has caused a minor stampede in applications."
So far, attracting the right people with the right skills hasn’t been a problem. "I have a resume binder, inch and a half thick, full of resumes from people who want to work out here. Not just students, but Ph.D.’s who want to move up here," he said.
The business is a partnership. Dave owns GeoAlpine, with Mike Cole and Ethan Askey operating their own practices under the GeoAlpine banner. Corina Andrus, a recent addition, pulls yeoman duty in any number of administrative support roles.
In a business described as multi-disciplinary, one of the disciplines GeoAlpine calls on is another business far removed from the tourist world: GPS mapping. Colin Ernst, a partner in Terra Pro GPS Surveys Ltd., came to Whistler about 10 years ago. "I started in Prince George as a forestry consultant and would go back and forth between there in summer and here in winter. Eventually, I moved here permanently about five years ago," he told me.
Terra Pro, a four year old company, does GPS mapping and surveying. "We use a string of 24 satellites, ground stations and field GPS equipment to make our maps and locate and do inventory work primarily for the forest industry or BC Hydro or West Kootenay Power," Colin said.
"Walking around, say, a cut block, we collect data in the field, bring in the data collectors, dump the data from the collectors into a PC and use proprietary software to correct that data. Then we export that data into a third party mapping software to produce maps," he explained. "We used to run around cut blocks with two people and a 50 metre chain to measure areas. It was labour intensive. We’d take two days to run around a cut block and map it out or figure out its area. Now I can go out with a GPS unit myself and do it in a matter of hours or I can get in a helicopter and fly around the perimeter of that cut block and do it in 10 minutes."
The company — whose best known effort may be the mountain bike trail map of this area — employs 15 people full time, five of them in Whistler, three mapping technicians, a support staff and Colin. "About two years ago, we put out a call for jobs here. We got about 80 applications, many from over-qualified people. The same ad in Prince George gets maybe 10 responses," he said in answer to how hard it was to find qualified people in the field willing to work in Whistler.
There are drawbacks, of course. Most of the clients are outside the area — though all like to visit — cost and availability of housing is a factor, as is business space. "We recently moved from smaller, cramped space to this space. I wouldn’t mind being somewhere else but as far as rent goes, this is affordable in Function. I’d like to be further from the train track though," he said as a train rumbled by just 20 feet outside his door.
There were no trains interrupting my conversation with Liz Forrester on the other side of Function. Liz is the self-described office manager, gear schlepper and sleeping bag washer for Canadian River Expeditions. In what might be the ultimate example of a snake eating its own tail, Canadian River Expeditions is a tourist business, in a tourist town, that doesn’t do a dollar’s worth of business here.
Johnny Mikes, the company’s owner, runs high-end river trips to Baffin Island, Firth River in the Yukon, Tatshenshini and other exotic locales. His head office, courtesy of well-placed advertisements and the Internet, is Function Junction, Whistler, B.C.
The company’s here because Johnny is here and there’s nowhere else he’d rather be. The equipment is elsewhere, the trips are elsewhere, the office is staffed by two people and, "an answering machine that says we’re at a seminar on 20 centimetre days," laughs Liz.
The final company I spoke to has played a big role in shaping the Whistler "look." When you walk into the Blackcomb daylodge, if you happen to ever look up, you can’t help but be impressed by the spider web of huge, laminated wooden beams. They shine with a deep, natural patina and warmth of honey-gold wood. Had it not been for the stubborn orneriness of Lauren Evanow and Peter Palkovsky, those beams would have been stained or painted grey, their beautiful grain and colour lost forever.
Lauren and Peter, along with chemist Brian Morse, own Bio-Wash Wood Restoration Systems. Bio-Wash manufacturers a complete line of environmentally friendly and ecologically sound water-based and water cleanup wood restoration, stripping and refinishing products. With $5 million in sales last year, the company’s head office is Peter and Lauren’s home.
The beams for the daylodge were marked and stained black from welding marks made when the lodge’s infrastructure was being built. "The interior designer was dead set on painting the entire inside of that lodge grey. In the end it came down to Lauren saying, "If you want it painted grey, you’ll have to do it yourself. We won’t do that part of the contract. Hire somebody else. I will not destroy or cover the surface of this wood," Peter told me. They won their point.
But finding nothing on the market to effectively deal with the task at hand, they ended up finding Brian Morse, creating products that hadn’t existed previously, and changing the way people take care of their wood.
Now, with a 23,000 square foot manufacturing plant in Delta, a full time Whistler staff of four, growth coming at the cost of losing bedrooms, 200 reps throughout North America handling their product line, large paint and finish manufacturers beating a path to their door, and a market share most companies would kill for, why manage it from Whistler?
"It’s the best place to live," said Peter. "And the worst place to do business from. You lose a whole day just getting to the airport and back. You have to pay long distance for every phone call you make. UPS can only give you second day service. But if I say to someone, ‘Oh, by the way, we’re in Whistler, grab your wife and come visit for a couple of days and we’ll show you what we do,’ that’s a big incentive."
Peter and Lauren keep their company here for the same reason other companies may decide to open or move here: the community, pace of life, recreational amenities, growing infrastructure and natural beauty.
A short time ago, the Chamber’s diversification committee asked for community input on what they should be doing and what are appropriate and inappropriate types of businesses for Whistler. The response was underwhelming. Perhaps there’s complacency in being number one. Maybe everyone’s waiting to see who gets the ball rolling first. Maybe it’ll take a Bre-X experience, but somehow, I think Doug the squirrel’s on to something we might be paying more attention to.