Monday, May 21, 2012

Whistler's Empty Storefronts

It's been over a month since we last cast our eyes northward to Whistler and noted property owners had begun dumping properties to cut losses while they could, and over two since we noted some properties were selling for 50% of their previous values.

The winter ski season is now over and by all accounts it was a highly successful one courtesy of Whistler’s epic snowfall levels.

Several room-night records were broken, and Whistler Blackcomb’s latest quarterly results, released May 9, show increases in both revenue and skier visits. Overall, room nights are expected to be at least 10% higher than last winter.

So businesses should be leaping for joy, right?

Apparently they're celebrating by closing up shop.

One of the local news rags, The Pique, is reporting that Doc Branigan's restaurant is now closed due to the fact that this building has been foreclosed upon by the bank.

Will they locate somewhere else in the Village and re-open?
"Branigan's was working toward changing the liquor license so the restaurant could offer more entertainment varieties in the space but, a spokesman said, (but with this development) the shareholders decided to cut their losses and cease operations."
The Elephant & Castle restaurant in the Delta Whistler Village Suites has also stopped operations.

Property manager Drew Meredith said Calgary-based restaurant chain Original Joe's has purchased the Elephant & Castle brand and the new owners of the chain have no plans to open an Original Joe's outlet in Whistler.

In the village itself, the doors of the Pizza Café are also closed and have been for more than a week.

The European café at the corner of Lorimer Road and Main Street appears to have also closed. The cafe is notable because the owner, Miro Kolvek, was one of the six candidates in the running for the job of mayor in the last municipal election.

The Savage Beagle nightclub also closed last month.

The foot and apparel store Merrill, located in the Village Centre beside Eddie Bauer, is preparing to shut down. Store manager Dave Booth said June 27 will be the final day of operations.

Food Plus in Creekside is also closing, and Loka Yoga is looking for a new location starting June 1 after receiving notice that its rent is being more than doubled.

And it's the last tidbit that has some wondering if it isn't time to reexamine the way the municipality conducts business. The lifeblood of any municipality are it's taxes. Are Whistler's simply too high?

According to Loka Yoga’s owner the rent at the Saint Andrews House location where they had set up shop was set to jump from $2,500 to $6,700 per month!

Why the huge jump? Apparently it costs $12 per square foot each month just to cover property taxes in a Village commercial space. If that figure is accurate, that’s $8,400 per month for a 700 square foot space — just to cover the property taxes.

Whistler is now beginning to face the dreaded deflation scenario. As property values drop, revenue from property taxes falls. Meanwhile businesses, hurting from declining revenues, cannot afford the property taxes currently in place, let alone handle any increase to offset the drop in revenue from property owners.

And any cut in the tax rate can only impact municipal amenities, services which are crucial in a resort destination like Whistler.

The hard times are only just starting for the Sea-to-Sky community and the catch-22 is under way.

(hat tip to Patiently Waiting for the news links)


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  1. I took my family skiing to Whistler on Saturday - patios were very nearly full, and the streets were packed with people. Activity everywhere.

    Luxury cars litter the parking lots.

    The village looked every bit as busy as I've ever seen, and the ski season was one of the most crowded I can remember.

    Real estate valuations may be falling, and I have no clue how retail is faring, but there is no shortage of visitors. The village just keeps growing in size.

  2. I thought Whistler would get unbelievable more awesome after it was bought out by Fortress Investments (yet another PE vampire ala Bain Capital) via a highly leveraged buyout. Between whistler village council sucking high taxes, and cash flowing out to the hedge fund guys in New York, no wonder the lifeblood is evaporating there.

    Joe Hussein is a genius cashing out at the peak, even if he was forced to by a hedge fund.

  3. You caught an important point here regarding property taxes. It cannot be overstated how difficult the coming RE deflation will be on municipal revenue.

  4. Took my family to W. last weekend and it was dead. But the weather was great!

  5. hey! interesting to read this now, halfway through the year. The market took a slide but now everything looks like it might be coming back again Victoria BC Real Estate

  6. A beautiful place to live is now getting more affordable. But resistance restricted building lots are still 110,000. But try finding another small Canadian town of 10,000 people that has that kind of infrastructure.

    1. Resort property is usually the canary in the coalmine where trends are concerned. That is to say that when we see prices falling sharply in areas like Canmore or Whistler we can expect trouble is brewing elsewhere even if nothing has yet happened. In this case we are getting a snapshot of the health of the countries whose citizens make up much of our ski tourism. Europe is deflating, Japan is still suffering the ill effects of its tsunami, China is going through a massive housing correction and Australia is so tied to the purse strings of others it is an inevitable casualty. The list goes on. What we are seeing though is the conclusion to a great period of credit excess that spans the entire globe. It is absolutely everywhere now and nobody will be immune to its effects as it unravels. As the delevering grows in earnest I think we will see cities like Canmore and Whistler suffer a hurtful decline in their fortunes that will run for many years. So the idea that this represents an improvement in affordability strikes me as a depressing comment. It is really more of an unfolding tragedy and I find it difficult to see the sunny side. It won't be pretty to watch.


  7. Boom-bust, boom-bust, boom-bust.....only difference is that this is going to be a deeper bust than usual and it should take many years to fully resolve.

    Merchants are not fools. They have the numbers in hand daily and know the cycles of the seasons as well as the larger cycles of the market. Getting out at the top (even if the business is closed and not sold) is sometimes more prudent than fighting through a losing season and watching your cash flow wither.

    Some might say that what is being witnessed now is that the rats are jumping off the ship. The picture that paints is a negative one. But maybe it is so.

    Just ask yourself why rats jump off a ship in the first place. Usually they have an insiders edge to trouble that is coming and that is therefore something that all of you should be paying attention to. Is this an early warning that trouble is brewing in the economy?

    Business's are choosing voluntarily to close thier doors.They are doing so before they have been forced to close by slow conditions and falling revenues. They are quitting while they are still strong.

    Now why do you think they would do that?