recession – Whistler Museum and Archives Society

Whistler at 22% Interest – Part 2Whistler at 22% Interest – Part 2

July 5, 2022 Whistler Museum 0 Comments

Find Part 1 here.

When the financial crisis of the 1980s hit Whistler even the prime real estate at the base of both mountains did not make it through unscathed. Dick Gibbons and Jack Cram were partners in Fitzsimmons Condominiums and Stoney’s Restaurant, where La Bocca is today. With a completed Whistler development under their belts, they were approached by Whistler Village Land Company (WVLC) about potentially purchasing the unfinished project where the Carleton Lodge now stands.

The base of Whistler Mountain in 1981 showing the Carleton Lodge under construction. The Pan Pacific Whistler Mountainside Hotel can be seen on the right. The base of the mountain looks a bit different today! Arv Pellegrin Collection.

At the time the foundation was partially complete and it was anticipated that this building would be a day lodge and gateway for both Whistler and Blackcomb Mountains, however WVLC’s finances were dire and there was not enough money to finish the project. Dick recalls a conversation with Neil Griggs, President of the WVLC “I don’t want to exaggerate this, he literally begged us to finish the Carleton Lodge. I seem to recall he had tears in his eyes.”

Together with additional partners, they negotiated a deal wherein they agreed to finish the project on the condition that if they were unable to sell the 32 condominium units for a certain price the development permit charges would be refunded. Throughout the build the architect, building contractor, and many partners felt the financial strain. By the end of the project, Dick Gibbons and Ken Mahon were the only two left to finance and run the show.

*Dick Gibbons and Gilbert Konqui in 1981. It was all hands on deck to get the Carleton Lodge and The Longhorn completed. Whistler Question Collection.*

When the Carleton Lodge was finally completed in November 1982, few residential units sold and Dick Gibbons ended up running The Longhorn because nobody else would buy it. The unsold residential units were transferred to the people involved in the development according to their investments, and development permit charges were refunded as initially agreed after the court got involved.

When Dick Gibbons was asked how he was able to balance his finances while many in Whistler could not, he said, “Being a little more risk adverse than some others might be was good for me at times and bad for me at other times because you miss opportunities. I sold quite a bit of real estate when the market had its peak in Vancouver because I thought it pretty much couldn’t go any higher.” Obviously real estate in Vancouver did eventually increase, but selling these real estate investments left Dick in a more comfortable position when interest rates skyrocketed, although it was still a difficult period.

Signs for The Longhorn and Nasty Jack’s can be seen while the Carleton Lodge is still under construction in 1982. *Arv Pellegrin Collection.*

Interest rates had an impact throughout all of the Whistler community. Bruce Watt, who had been a patroller since 1974, decided his family needed better financial security which led to him getting into real estate, a career he has loved and where you will still find him today. On the other hand, the ugly unfinished Village led realtor Drew Meredith to make “the mistake of running for Mayor in 1986” (his words, not mine) where he served for two terms.

While similar circumstances led to very different decisions, a consistent sentiment when talking to long-time locals about this time is that they would not want to do it again. The Village was started just in time, a year later and it may never have happened.

Whistler at 22% Interest – Part 1Whistler at 22% Interest – Part 1

June 28, 2022 Whistler Museum 3 Comments

In the early 1980s, just as the development of Whistler Village was starting to boom, the economy bottomed out and interest rates skyrocketed. Whistler Village was left with 27 unfinished lots as owners, developers, and contractors were going bankrupt at unprecedented levels. Remembering the mess left behind as construction halted, Drew Meredith said, “Imagine standing in Village Square looking up towards Mountain Square and all you see is half finished concrete foundations with rebar sticking out of it. Rusty, dirty rebar. The stroll was there but on both sides of the stroll was just chaos. Very tough to sell that to anybody who wants to come for a holiday.”

*Construction in Whistler Village halted when the economic crisis of the 1980s reached Canada leaving many lots unfinished. Eldon Beck Collection.*

Canada’s inflation had accelerated throughout the 1970s, reaching over 10% in 1980. To curb inflation, the Bank of Canada raised interest rates to a peak of 21%, however inflation remained high. During this time interest rates for home loans reached 22% and Canada went into a recession. To top it off, in November 1981 the federal government ended the Multiple-Use Residential Building (MURB) program of tax credits. With multiple-use residential on the second and third floor of every building, much of Whistler Village was constructed with the understanding that MURB would provide tax incentives for investors. With the MURB program coming to an end many investors poured the foundations quickly to make use of these incentives before it was too late.

While some developments in the new Whistler Village had opened, most were just a foundation as the economic crunch really hit. Whistler had prioritised small developers in the building of the Village and many struggled to continue and could not pay their land taxes.

*Aerial view of the construction in Whistler Village, December 1980. Whistler Question Collection.*

The Whistler Village Land Company (WVLC) was a non-profit arm of the municipality incorporated in 1978 to oversee the sale and development of the Village. As land was sold, the WVLC would use the income to pay their liabilities, including loan repayments and development costs for municipal assets, notably the Arnold Palmer Golf Course and the Resort Centre intended to host a pool and ice rink (eventually the province dictated that the Conference Centre would be built instead). However, in the early 1980s when more lots were placed on the market they would not sell. To further financial woes, in July 1982, only 60% of taxes were paid to the municipality on time and they could charge a maximum of 10% on late payments, less than the bank’s interest rates. Between 1981 and 1982, the municipality’s capital budget was almost halved from $1 million to $650,000 and in 1982 municipal staff took a 2.5% pay cut.

With finances in dire straights, WVLC staff were let go and WVLC operations transferred to the municipality. With debts of approximately $8 million, no way to pay them, and creditors knocking, concerns were mounting that the banks would repossess assets worth far more than the loan amount. Banks could then sell these lands independently to developers, while the government would get nothing for the sale and still have to pay liabilities.

Bringing in the big guns. New Mayor Mark Angus takes Lands Minister Anthony Brummet and Assistant Deputy Lands Minister Chris Gray for a tour of the rebar with WRA Executive Director Earl Hansen in January 1983. Whistler Question Collection.

Whistler went to the provincial government for assistance. On January 6, 1983 it was announced that Whistler Land Company Developments, a new Crown corporation, had acquired the assets and liabilities of WVLC for $1. Government studies showed that all outstanding debts would be paid with future land sales and continued development would create many jobs, plus the expected revenue from tax and tourism. While there was uproar at the time about a taxpayer bailout, the provincial government went on to recoup far more than the initial investment through the land sales of Village North, and today Whistler brings in 25% of BC’s annual tourism revenue.

*Looking at some of the unfinished construction in Whistler Village. Whistler Question Collection.*

Hear how some of the Whistler community dealt with the economic crisis next week in Whistler at 22% Interest – Part 2.

“Last person leaving Whistler, please turn out the lights.”“Last person leaving Whistler, please turn out the lights.”

May 4, 2013 Whistler Museum 2 Comments

Spring in Whistler is so full of distractions (skiing, biking, golfing, climbing, WSSF, Dine In Whistler…) you might be excused if you hadn’t noticed that a provincial election campaign is well underway.

Regardless of your level of awareness, the election is happening May 14th, and it matters. Want proof? Well if it weren’t for some very heavy involvement by our provincial government three decades ago, Whistler as we know it simply would not exist.

By 1980 the highway from Vancouver had finally been paved, the RMOW had been formed, Blackcomb Mountain was shaking up the ski scene, and construction was well underway turning Eldon Beck’s vision for Whistler Village into reality.

But what should have been a time to rejoice was quickly turning into a nightmare scenario.

A major recession hit North America in late 1981. The economy was failing, real estate sales plummetted, interest rates were in the %20-%25 range, and the Whistler Village Land Company (the provincial crown corporation set up to oversee the development of Whistler Village) was on the verge of bankruptcy. As long-time Whistlerite and ski-resort-management guru Peter Alder recalls, the mood was so pessimistic that a common catchphrase around town was “Last person leaving Whistler, please turn out the lights.”

At this point construction was very much underway on the original village plan (which spans from Skier’s Plaza to the pedestrian bridge over Village Gate boulevard), but several buildings remained in varying states of construction: exposed re-bar, concrete foundations, and boarded-up windows were everywhere. There was a serious risk that the original design for the village would be abandoned, undeveloped lots would be sold off to recover debts, and these properties would then be developed without any over-arching design.

Thankfully, the provincial government, then led by Bill Bennett Jr.’s Social Credit Party, began investigations to see whether saving Whistler was even worthwhile. Satisfied that Whistler wasn’t a lost cause, accomplished and well-connected BC businessman Chester Johnson was put in charge of a restructured Whistler Land Company, with $21 million of provincial funds to kickstart the reboot.

Mr. Johnson’s determined leadership was just what the doctor ordered. He oversaw the reconstruction of the conference centre so that it better suited the resort’s needs, fought off calls to bring in a casino, while respecting the architectural sensibilities of the original Whistler Village design. By 1984 some normalcy was returning to the situation, and Whistler was once again set upon a successful bearing.

It’s hard to say what exactly would have happened had the BC government chosen not to intervene (a politically expedient decision at the time; recall the wide-ranging calls for austerity following the 2008 recession) is impossible to predict, but it was clear at the time, and perhaps even moreso in hindsight, that the decision would have a huge influence on Whistler’s future.

All that to say: those who think that provincial politics have no impact inside our cozy little Whistler bubbles… you’re wrong. There are many more examples than the above story, but probably none so dramatic.

From bitumen pipelines, natural gas plants, and IPP hydro facilities, to tourism promotion, post-secondary education, healthcare funding, our rising deficit, arts & culture and more, there are many contentious issues at play in the upcoming election. Make sure to come out to Monday’s all-candidates meeting at the Whistler Public Library, where you’ll have a chance to ask pointed questions and get informed on the issues that matter most to you.

Then make sure you’re registered, and show up to vote on May 14th at the Whistler Conference Center, courtesy of Chester Johnson.