Red Mountain Properties Q & A

... an edited interview with Robert Felsch, Red Mountain Properties

1. How did you find your way from Australia to a small community like Rossland?

My wife Robyne and I had traveled previously in North America, and in 1999 we came to Rossland with our family to ski. We all liked the town; the ski hill was underdeveloped, but the place had a nice feel about it. We decided on a 12-month working holiday.

2. How did you get started?

The original concept was to build four units on a 10-acre parcel adjacent to the house we purchased at Red. We proceeded with this because the hotel was underway. Unfortunately they fell over just at the time we were getting started. When the 12 months were up we could no longer pull up and move back to Australia without losing a substantial amount of money.

3. What kind of development did you do in Australia?

I purchased land and developed units on that land. We live just north of Sidney and we were often buying old houses on large lots, knocking them down and re-building.

4. So Red Mountain was a new experience for you?

For sure. The market is so young at Red Mountain and it's still just a seasonal market. If the ski hill hadn't sold I had intended to acquire more land and continue developing there. But with the sale and other development at the hill we've moved on to the (Redstone Resorts) golf course.

5. How many dwelling units do you have?

We've finished 57 and we have approval for another 16. There's space for 95 units on my property but I'll end up with around 73. Topography is limiting, and I don't like to jam units too densely or we'd destroy what we're trying to create. I like a mix of housing styles.

6. Is the rate of development at Red Mountain sustainable?

The more development there is the more people want to be part of that development. Filling that first unit was very hard. Nobody wanted to be the first one to buy at Red Mountain, it was too risky. Now look at what happening there: the ski hill has pre-sold 40 units so far, and the Ash's development is selling too. As development proceeds we create an established market so there is less risk for people. The more development there is the more sustainable it is.

7. Did you consider developing elsewhere in Canada?

No. The clincher for me was when Andre Carrel (city administrator at the time) gave me such a clear picture of what and how the development would happen. In Australia it sometimes takes two years to get a development permit. Add a year to build so you're looking at three years to when you have it on the market. Carrel said it's going to take so long to do this, so long to do that. The water and sewer were already up there so we could move quickly. We had a clear outline from the city about what would happen and how it would happen. The biggest thing for any business, not just developers, is to have clear guidelines from the city that the city will stick to.

8. What other encouragement did you get?

There were several people within the city who were very encouraging. We did get a lot of discouragement from our neighbours and anybody who had any sort of accommodation in town. Right up until 12 months ago one of the nicest things was a lot of positive feedback from people in town.

9. Did you set and achieve milestones for the business?

I can't say I had milestones at the start. With the first four units it was basically survival. It has been more of a struggle than I anticipated and it continues to be that way with the golf course, but doing business here is still easier than in Australia.

10. Were there other key success factors?

You need a certain amount of money, that's for sure. If I was to look back on anything that was a key to our success it was basically grim determination. I don't think anybody appreciates what we went through in those first three years and it was pure determination not to be beaten that got us through.

11. Is this determination inherited or learned?

I think I was born with it. Since I was a little boy people have said you can't do this or that's too hard. Most things are achievable if you're determined to make them happen. I've never shied away from difficulties and challenges.

12. So what other challenges did you face?

Andre's departure from the city in July 2000 left a void for six months. Everything was lined up to go but there was basically nobody there that knew what to do. Councilor Laurie Charlton was also a challenge for us. He took on the role of technical expert and felt he had to approve every detail, which often meant changing what had already been agreed. This was a major obstacle for us, and delayed our progress by about 18 months. I believe in playing by the rules but when the rules keep changing it creates so much emotional turmoil in your life it's soul destroying.

13. Looking back would you change anything?

If I had have known what we'd go through in those first three years I never would have come to Rossland! But now, considering where we are now, I'm very happy with the way things have turned out. It is difficult having to live in two countries, since Robyne and I have strong ties and regularly visit our parents in Australia; but I love my life in Canada.

14. Has the community benefited from your enterprise?

Absolutely. I believe I have helped create a change of attitude. Many people doubted that units at the mountain could be filled at $200,000. I've given people in the whole district, not just Rossland, a belief in the area. People no longer think of the area as a smoky old industrial town. We can now envision something different. How instrumental I've been in that I'm not sure, but I definitely sense a change in attitude.

15. You've created something that is aesthetically appealing.

I may have cut down a few more trees than people would like but I've left as many as I could. I've also had battles with the city about putting in roads. I don't want to blast huge amounts of rock like living in a quarry. I'd rather have marginally steeper roads so we can leave as much of the natural landscape as possible. I want to keep the feeling of Rossland as this nice town in the woods.

16. Do you think the community recognizes and appreciates your enterprise?

People have said many times how much they appreciate what I've done. A developer often carries this negative 'evil' image, but if there weren't developers nobody would be living in a house. There are other developers who wouldn't be as considerate as I have been, but I don't think most people in town appreciate that. I want it done right rather than just maximizing profits.

17. What have you learned as an entrepreneur?

I've got an economics degree and I've done most of my master's degree in business. I've worked on building sites as a bricklayer and concreter, there's not much I haven't done. Probably what I learned the most was understanding local market forces.

18. What do we have to change to encourage more entrepreneurs and innovators?

You need a clear direction from city council. Changing the rules every time somebody new goes in is the worst scenario for an entrepreneur. There has to be certainty if people are going to take the risks.

19. How do you see Rossland evolving down the road?

We need a mix of people moving into Rossland, tradesmen and all sorts, including people running businesses via the Internet. With more employment we'll need more schoolteachers, more tradesmen, and other businesses will grow. When our population declines and the school population drops those people who are against change and development really need to assess things. The town has to grow. A city is like people, you either grow or you die. In 10 or 15 years Rossland will be a different town. We have to change and move forward or we won't have a town. Teck Cominco has employment plans over the next 10 years, and we expect the golf course to attract those younger people with families. I think the golf course will attract more permanent residents. The ski hill is seasonal but it injects a lot of cash into the town.

20. What is the City's responsibility to manage this growth?

The city and the residents have to put guidelines in place so it doesn't go haywire. People like myself simply need a clear outline of what we're allowed to do and how we're to do it, without any unnecessary obstacles.

21. Can we improve the current system in any way?

The current council system is not set up for open discussion and resolution of issues. It tends to be them and us. A few vocal people can hijack the system, like the golf course issue. It would be more constructive to sit down at the table, discuss things freely and come up with a vision that satisfies both the city and developer. There are developers out there who just want to make as much money as they can and then move on. I'm mindful that council has to put regulations in place for the worst situation, but for someone like myself, who works within the rules, those rules need to be consistent.

22. How damaging is it when the rules change?

In our business cash flow is everything; without it you're dead. Councilors must look to the bigger picture and avoid delays to the point where business is not viable. If we can't keep moving forward then we may as well pack our bags and go. One in two developers go bankrupt. It's a risky game. The rewards can be good but the risks are huge. People don't understand that.