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Intrawest moving headquarters to Colorado

News confirmed to staff in a memo from CEO Bill Jensen

After 34 years in British Columbia, Intrawest is pulling up stakes and moving its headquarters from Vancouver to Greater Denver, Colorado by the end of 2011.

The move was publicized on Tuesday when the Vancouver Sun obtained a leaked memo to staff from Chief Operating Officer Bill Jensen.

Intrawest confirmed the memo in an email on Wednesday.

As reported by the Sun in the memo Jensen called it a logical step for the company: "With shared services and Intrawest's two largest resorts already in Colorado, this relocation is the logical next step to the continued growth of Intrawest, and is consistent with the company's long-term business strategy," states the memo.

Intrawest, which is now owned by Fortress Investments, has been slowly divesting itself of properties in B.C.

In January 2010 the cash-strapped company sold its stake in Panorama Mountain Resort to a group of local investors.

In November, Whistler Blackcomb was launched as a separate company in an initial public offering, with Intrawest owning a 24 per cent minority stake in the publicly traded company.

In December 2010, the company announced that it had sold Kadenwood, one of its remaining real estate developments in Whistler, to Ecoasis.

On the other hand, Intrawest ULC still operates two large-scale resorts in Colorado, Winter Park and Steamboat. Other resorts owned or partially owned by the company include Blue Mountain in Ontario, Tremblant in Quebec, Snowshoe in West Virginia and Stratton in Vermont.

The Intrawest office in Vancouver has been downsizing in recent years since their acquisition by Fortress, and a spokesperson for the Vancouver Economic Development Association told the Sun that the total staff at headquarters is now between 20 and 25 employees. It's unknown how many of those staff members will be going to Colorado, although the memo suggested that all of the senior managers would be making the move.

According to Timothy Renshaw, editor of Business In Vancouver magazine, the move is understandable in the circumstances but bad for Vancouver as a whole.

"From their business point of view it does make sense, but from the larger business perspective it points to the issue of maintaining those Grade A offices and centres here in B.C. and Metro Vancouver," he said, noting that Intrawest was a B.C. success story until recently. "(Intrawest) has been in transition for quite a while, so it's not entirely surprising."

Renshaw said there is a trend in B.C. of head offices moving elsewhere.

"A lot of our concern revolves around the loss of head offices," he said. "(Companies) get to a certain point here and they disappear, and those are really big losses for the city and for B.C., because head offices bring really good jobs here and attract other head offices. It's one thing Metro Vancouver has a real issue with because of the higher cost of living here, and because the relative compensation can't compete with bigger places in the U.S."

James Brander, a professor in the Sauder School of Business at UBC, said the announcement was "sad," given Intrawest's history in the province, but said the good news is that Whistler Blackcomb appear sot be in a strong position.

"This is just one more step, and not a very surprising step for Intrawest," he said. "The important thing is that Whistler Blackcomb seems to be doing reasonably well and has recaptured its financial stability. The company that used to be its owner and manager is less important."

Prior to the announcement, Brander said, Intrawest's presence was already in decline.

"When the company was bought by Fortress that was really the end of Intrawest as a genuine Intrawest company - it was just a branch of Fortress with an office in Vancouver. Which made sense with Whistler Blackcomb here, but with most of that sold off it didn't make sense."

Both Club Intrawest and Intrawest Resort Club Group operations are separate to the corporation, and are not affected by the move. Both will remain in Vancouver.

The memo did not say when the move would take place, but Jensen suggested that it would be business as usual for the next few months.

Intrawest has been in operation since 1976 as a residential and real estate firm, expanding into mountain resorts by the mid-1980s with the acquisition of Blackcomb Mountain. The expansion continued until the company went public in 1996, the same year the company merged with the Whistler Mountain Ski Corporation to create a single entity known as Whistler Blackcomb.

At one point Intrawest's portfolio included dozens of resorts with real estate opportunities, including Copper Mountain, Colorado; Les Arcs and Flaine Montsoleil in France; Mammoth Mountain in California; Sandestin Golf and Beach Resort in Florida; the Village at Squaw Valley in California; and Mountain Creek in New Jersey.

The company also got into heli-skiing and owns Canadian Mountain Holidays - one of the largest heli-ski operations in the world.

The trouble for Intrawest started in 2006 when the company was purchased by Fortress Investment Group, a private hedge fund, for roughly $2.8 billion. Its value plummeted in the financial crisis.

Meanwhile, Fortress struggled to pay back its debt in a soft economy. In order to generate revenues and finance the debt, Intrawest began to sell off properties, and at one point in early 2010 the company's creditors tried to force an auction of remaining assets.

The company managed to avert the auction and restructure its debt, and in the fall it was announced that the company would raise money by selling off shares in Whistler Blackcomb through an IPO.

 

 




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