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Fight the Man. Own the Mountain: Interview with Red Mountain’s Howard Katkov

post #1 of 18
Thread Starter 

If you haven't heard, Red Mountain, BC has just launched the world's first Crowdfunding for Equity Campaign. Here''s my interview with the owner.

 

Fight the Man. Own the Mountain: Interview with Red Mountain’s Howard Katkov

post #2 of 18

For those who prefer reading to listening . . . 

 

http://finance.yahoo.com/news/red-mountain-resort-makes-history-130000427.html

 

"ROSSLAND, BC--(Marketwired - August 22, 2016) - RED Mountain Resort, the oldest ski resort in Western Canada, is dropping into the history books this week. The fierce, independent mountain that is the first stop on British Columbia's famous Powder Highway is bucking the trend of MegaResort mergers and acquisitions and taking its next capital campaign to the people via equity crowdfunding . . ."

 

The reservation goal is $10 million.

 

" . . . This "Test The Waters” stage allows parties to express interest in the investment without handing over any actual loot  now or later. (Imagine a hyper-convoluted “Like” Button that is 100% risk-free. Drop $1,000 or $10,000, no commitment necessary.) If Test the Waters gains sufficient traction from people like you, RED will will move on to the next round with offering actual equity in the company, unique tiered perks and rewards with each investment sure to appeal to ski and snowboard enthusiasts especially, and a $1,000 minimum buy-in, all fully regulated by the SEC and in accordance with Canadian securities laws. 

 

Money raised in round 2 of this campaign will go toward improving the adventure here at RED. Think of this as investing in your own happiness, like a cold craft beer or getting your car detailed at the end of a long winter. Plans include remodeling the Paradise lodge; additional run development for expanded cat skiing on Mount Kirkup; building a new restaurant, clubhouse, and overnight on-mountain cabins at the top of Grey Mountain; and the extension of the Silverlode chair to allow access to both Granite Mountain and Grey Mountain.  For spring and summer activities, we’ll be building a multi-use trail for hiking and mountain biking from the base area to the top of Grey Mountain connecting to the Seven Summits trail system. Your Investment will also be supporting the creation of an annual local academic Scholarship fund for higher education. You can be a part of all of this - and more importantly, an owner of all of this. . . ."

post #3 of 18
Can someone help me understand why i would "invest" rather than buy a day ticket or season pass? It looks like you can enter a lodge (I imagine there's already a main lodge) and some a few lift tickets or a season pass, but at a vastly more expensive price. Maybe you can vote. But you don't actually "own" anything in any way beyond what a day tripper owns. What's the value for the investor?

For what it's worth, I'd love to own part of a mountain. But to me that would mean an included season pass, an affordable option to purchase housing, maybe no outside members allowed (like at the Ontario private clubs, in order to reduce crowds).
post #4 of 18
Quote:
Originally Posted by Metaphor_ View Post

Can someone help me understand why i would "invest" rather than buy a day ticket or season pass? It looks like you can enter a lodge (I imagine there's already a main lodge) and some a few lift tickets or a season pass, but at a vastly more expensive price. Maybe you can vote. But you don't actually "own" anything in any way beyond what a day tripper owns. What's the value for the investor?

For what it's worth, I'd love to own part of a mountain. But to me that would mean an included season pass, an affordable option to purchase housing, maybe no outside members allowed (like at the Ontario private clubs, in order to reduce crowds).

 

Well, there is the possibility of return on your investment I suppose.  You're buying equity in the business so presumably if there is profit you would receive an ROI when you sell?  Or perhaps a dividend?  They also mentioned perks and other things.  So there's that.

post #5 of 18
Those are good questions to understand the answer to. Is the ownership dividend paying, or are you just financing a ski hill for the general public? Is your ownership resellable? Or is it basically for all intents and purposes a donation? What kind of return (monetary or otherwise) will you get by buying into the mountain?
post #6 of 18
Quote:
Originally Posted by Metaphor_ View Post

Those are good questions to understand the answer to. Is the ownership dividend paying, or are you just financing a ski hill for the general public? Is your ownership resellable? Or is it basically for all intents and purposes a donation? What kind of return (monetary or otherwise) will you get by buying into the mountain?


For sure..I don't think I'd throw money at it unless there was some possibility of monetary gain.  Which could also mean a loss I suppose.  For the good of mankind?  Dunno..I suppose some might feel that way too.

post #7 of 18
Fwiw, I'd love to be part of a true co-op mountain. Is this what the ski fields are like in nz?
post #8 of 18

it might work, "fight the man" taps into local sentiment perfectly. However i see it as just another attempt to raise much needed capital  Red needs a lot and day ticket sales are pretty handicaped by location. 

post #9 of 18

I don't see any non skier investing as it will be difficult to sell your shares in the future and dividends will likely be non existent or meager as $ is needed for capital improvements and operating income likely almost all goes to pay operating expenses.

 

If you are a local then you probably don't care about the 6 cabins that Red wants to put on top of Mt. Grey, but you might or might not want to help pay for a day lodge on Mt. Grey.

post #10 of 18
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post #11 of 18
What is the dividend look like on those investments for mtn? Might be a safer bet.
post #12 of 18
Quote:
Originally Posted by Metaphor_ View Post

Fwiw, I'd love to be part of a true co-op mountain. Is this what the ski fields are like in nz?

 

Maybe @rojoke can swing by and answer that one. 

post #13 of 18

From the interview: "...but you haven't fallen victim to the corporate takeovers and Ponzi schemes that we're seeing in the ski industry these days".

 

Does anyone have any clarification of what the interviewer means by "Ponzi schemes"?  As a long time follower and past participant in the ski industry this caught my attention.

post #14 of 18
Quote:
Originally Posted by skinorthamerica View Post
 

From the interview: "...but you haven't fallen victim to the corporate takeovers and Ponzi schemes that we're seeing in the ski industry these days".

 

Does anyone have any clarification of what the interviewer means by "Ponzi schemes"?  As a long time follower and past participant in the ski industry this caught my attention.

I googled ponzi scheme ski resort;  and google came back with a hit for Jay Peak ponzi scheme

post #15 of 18
Quote:
Originally Posted by skinorthamerica View Post
 

From the interview: "...but you haven't fallen victim to the corporate takeovers and Ponzi schemes that we're seeing in the ski industry these days".

 

Does anyone have any clarification of what the interviewer means by "Ponzi schemes"?  As a long time follower and past participant in the ski industry this caught my attention.

 

I think he is referring to ski resort development that is really just a real estate play. I think Tamarak might fit that definition but I'm not really up on the details of its failure.

 

I also think that the interviewer has a anti corporate, big is bad, alternative energy agenda.

post #16 of 18
Quote:
Originally Posted by raytseng View Post
 
Quote:
Originally Posted by skinorthamerica View Post
 

From the interview: "...but you haven't fallen victim to the corporate takeovers and Ponzi schemes that we're seeing in the ski industry these days".

 

Does anyone have any clarification of what the interviewer means by "Ponzi schemes"?  As a long time follower and past participant in the ski industry this caught my attention.

I googled ponzi scheme ski resort;  and google came back with a hit for Jay Peak ponzi scheme


Lots of talk in the northeast in the last few years about funding based on the U.S. EB-5 idea, which means getting money from non-U.S. investors in exchange for green cards.  The idea is build resort infrastructure and create new jobs in the long run.  Vermont has been in the news related to EB-5 the most because of Jay & Burke, and Mt Snow.

 

http://www.epicski.com/t/146764/jay-peak-and-burke-2016-issues

 

WSJ used "Ponzi" in the title of the article in April 2016:

http://blogs.wsj.com/law/2016/04/14/sec-suit-alleges-massive-ponzi-like-scheme-centered-near-vermont-ski-resort/

post #17 of 18
That was the situation I immediately thought of.
post #18 of 18
Thread Starter 

Here's my follow up interview with Howard Katkov. In just 6 weeks, they have raised received over $4.5 Million in pledges. 

 

Interview with Red Mountain Owner Howard Katkov, October 12, 2016

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