The Russian Front A winter nation is discovering skiing through a Whistler company

By Bob Barnett - The Pique Newsmagazine
April 11, 2003

One of the great laments of most people who have “discovered” Whistler in the last decade is that they weren’t in on things before the resort became huge. Since then, many people have gone east, to Sun Peaks, Rossland, Kicking Horse and Fernie to get in on a ski area before it gets too popular and too expensive.

But there’s a new area developing that may surpass them all. It’s just a little further east, in Russia.

Russia, land of Ladas, Cossacks and vodka, right? Say the word and the cliches and stereotypes of a cold war superpower trying to get up to speed in the 21st century ski world fill the imagination: a tractor with one tire removed powering a rope tow while portly apparatchiks dressed in drab, baggy clothing struggle to balance on 1950s era planks.

Nothing could be further from the truth – apart from the drab, baggy clothing that is in style everywhere – according to the head of a company that has designed ski areas in 25 countries around the world. Paul Mathews of Whistler-based Ecosign Mountain Resort Planners, says he had the same visions in his mind prior to his first trip to Russia, six years ago.

“When I first went there I was quite scared, because of the propaganda I’ve received growing up in North America. I had a lot of trepidation,” Mathews says.

“When I got there I was looking for mafia and military and bread lines and fat, ugly people, and what I found was quite… I was quite embarrassed by my perception of Russia and the reality of it. I really felt like an idiot.

“Why I would think a population of 150 million people wouldn’t have slim, fat, happy, sad… a whole range of people, I have no idea. It was childish and puerile for me to have ever had such a thing in my head.”

It was Arthur Doppelmayr, of Doppelmayr Lifts, who introduced Mathews to the real Russia in 1998. Doppelmayr had been contacted by a group that was interested in creating a new ski area in a town called Trekgorny in the Ural Mountains, a four-hour flight east of Moscow.

“Trekgorny was one of those secret cities, a city of 50,000 scientists in the Ural Mountains that didn’t exist. It’s not on any maps or anything,” says Mathews.

The Urals are the dividing line between Asia and Europe, a mountain range that Mathews says looks much like Quebec’s Laurentians and were formidable enough that Stalin moved much of the Soviet Union’s production of steel armaments, including tanks and howitzers, behind them when the Nazis were advancing toward Moscow during the Second World War. Following the war Trekgorny became an important centre in the Soviet Union’s cold war effort.

“This is a little different story than the typical switch from mining and forestry to tourism, this is switching from nuclear bombs or nuclear research, to tourism,” Mathews says of the town’s desire to build a ski area.

“So this is a real smart town,” Mathews continues. “You come along the main highway and then there’s just a little gravel road like you’re turning off, I don’t know, like you’re turning off the West Side Road on to somewhere. You go 300-400 metres, there’s three or four guards at this Checkpoint Charlie sort of thing, and then after 300-400 metres driving through the forest you open onto this broad boulevard with flowers and trees and the whole thing. A modern city with modern recreational facilities… a little bit of an academia look, almost a campus look in a way, but with a residential sector.”

Ecosign designed a master plan for the ski area at Trekgorny, which has been in operation for four years now and boasts the first detachable chairlift in Russia. Ecosign now has about seven ski area projects in the Urals, all of which are designed to serve the regional population.

The Trekgorny project caught the attention of some Russian authorities and in 2000 people from Mercedes Benz contacted Doppelmayr on behalf of their Russian client about developing skiing in the Caucasus Mountains. That client was Boris Berezovsky who, in addition to being the Deputy of the Republic of Karachaevo-Cherkessia and a member of the Duma, the lower house of the Russian parliament, also owned AvtoVas, Russia’s largest carmaker.
The Associated Press describes Berezovsky as “an influential member of former Russian president Boris Yeltsin’s circle… emblematic of the politically connected group of oligarchs who amassed huge wealth after the collapse of the Soviet Union.”

In recent years Berezovsky’s star has fallen. He resigned from the Duma late in 2000 to protest President Vladimir Putin’s move to keep regional governors out of seats in the upper house. Putin’s government then targeted Berezovsky in its anti-corruption campaign and Berezovsky became a bitter critic of the president. Berezovsky moved to London where two weeks ago he was arrested by British police after Russian authorities accused him of defrauding Russia’s Samara region of $20 million Cdn. Last fall a Moscow court issued an arrest warrant for Berezovsky in connection with the theft of cars from AvtoVaz.

“He’s a real character,” says Mathews. “I met him in France in May of 2000. I had an interview with he and Arthur Doppelmayr.”

But Berezovsky wasn’t the only one interested in skiing in the Caucasus. The federal government was interested in economic development in the region, specifically tourism. Part of the motivation was the government’s estimation that Russians spent $2 billion annually travelling abroad at winter resorts in the Balkans and central Europe. That number is now believed to be closer to $3 billion.

“It was a big, big issue,” Mathews recalls. “You see Russians, wealthy Russians, in Courcheval and Zurs and Lech, Verbier, St. Moritz.

“(The Russian government’s) goal was to keep about half of that money, repatriate it, by building an attraction to keep the money in the country. That was the goal stated to me by the minister of tourism.”
So the meeting in France led to an exploratory trip to the Caucasus Mountains to evaluate the region’s potential for mountain resort development. The Caucasus mountain range covers an area of about 65,000 square kilometres between the Black Sea and the Caspian Sea. The mountains, which straddle Russia and Georgia, are on approximately the same latitude as the Colorado Rockies and the tallest peak, Mount Elbrus at 5,642 metres, is the highest point on the continent.

“Our mission was to look at the infrastructure, railways, roadways, airports, hotels in the city, and then also at the mountains and try and connect the dots between a good physical site and the infrastructure – electric power grid and this sort of thing. So even if you have a beautiful site, if it’s so remote, if it’s going to cost $50 million to turn on the first light bulb, that’s going to be tough sledding.”

For nine days Mathews explored the Caucasus by four-wheel drive, on foot and by helicopter, examining mountain terrain, snowpacks and infrastructure available to support mountain resort development. A delegation from the federal government, including Deputy Chairman Victor Khristenko and ministers representing tourism and the economy, ensured Mathews had access to all areas and all the information he needed. In the evenings there were state parties, toasts and the speeches as he met the governors of the four republics in the region.

“It was the most amazing trip of my life, and Arthur Doppelmayr said it was the most amazing trip of his life,” Mathews recalls. “Berezovsky flew us down there from Moscow in his private Citation jet and there were these armoured Mercedes, because the Chechnya thing was going on. We had guards and this big train of 30 cars with police, and going way too fast for the Russian roads.”

The trip started in Sochi, a city on the Black Sea lined with palm trees and 80,000 tourist beds. Sochi is the gateway to the North Caucasus and a region that has been a place of recreation and recovery for Russians since Czarist times. Sochi was also a candidate to host the 1998 and 2002 Olympic Winter Games.

Inland from Sochi, in the northern foothills of the Caucasus, is Kislovodsk, a city of 150,000 that has traditionally been a place of convalesce for miners and the chronically ill. That doesn’t sound like a tourist attraction but the city’s sparkling mineral waters, a spa capacity for 32,000 and a large number of hotels offer huge potential. The city is pedestrian oriented, with parks and many pre-revolution buildings. And because of its history health services, including physiotherapists, trainers and medical staff, are plentiful. Mathews believed Kislovadsk can become a major spa and sports resort.

And then there were the mountains themselves.

“The Caucasus are an amazing place,” Mathews enthuses. “I’m hard pressed to name a mountain range – I may have missed a specific range up in Alaska or somewhere, but generally in the alpine areas of the world, and we’ve worked in 25 countries, so I’ve seen a lot of mountains in my career – this is as beautiful as I’ve seen anywhere.”

“And the funny thing about the Caucasus is unlike the Colorado Rockies or many other areas, they’ve done very little mining and forestry there. The whole thing is more or less in a pristine state, which puts a lot of responsibility on our shoulders. Their need for some clean economic development I think says that we should at least share the mountains and not just lock them up and throw away the key.”

Mathews visited three existing, rudimentary ski areas in the Caucasus, including Mount Elbrus and the Donbai ski area, where there is a nearby peak that looks almost identical to the Matterhorn. These areas have some great expert skiing, but most of the terrain is beyond the ability of 70 per cent of skiers.

A third area, centred around the town of Krasnaya Polyana in the Mzymta River Valley, offered huge potential. There is an existing ski area, called Alpica-Service, and one good quality hotel operated by Radisson SAS.

“When I flew around that valley the first time I said that valley could handle 50,000 skiers a day,” Mathews recalls. “It’s like Trois Vallee in France. It’s got huge, huge potential.”

Krasnaya Polyana is about 40 minutes up the road from the coastal city of Sochi. Krasnaya Polyana, which translates to Red Plateau, is only at 560 metres elevation, but as you travel up the valley you climb to 1,200 metres base elevation, and the town of Engelmany Polyana, named after a British botanist who studied the area’s trees and plants at the turn of the last century. It’s not known whether Engelman’s studies produced as much excitement as Mathews’.

“There are big verticals and great snow,” says Mathews. “It’s sort of a Mediterranean climate down here. It’s a bit like the southern Alps in Italy or France in that you have synoptic weather systems coming in over the Black Sea, picking up moisture and then hitting the mountains. So we were dealing very commonly with snowpacks anywhere from 3 to 6 metres.”

Ecosign has since compiled topographic details, done slope analysis, solar aspects and studied terrain pods. The data reveal an almost perfect ratio of beginner, intermediate and expert terrain and a natural capacity of more than 30,000 skiers per day. There’s also room for a championship golf course in the valley.

“So this is our baby,” grins Mathews.

Further study of the entire Mzymta Valley, which is more than 30 kilometres long and 420 square kilometres in size, led Ecosign to recommend seven ski areas could be built in a co-ordinated way, including three village centres, golf courses and Nordic ski facilities.

But ski area development is so new in Russia that the country didn’t even have a policy or framework for investment and development. Mathews advised that federal and state governments should provide the roads, power, sewer and other infrastructure to the region, and investors in the resorts should be able to earn the rights to some land development at the base of the ski area, much as prescribed under the Commercial Alpine Ski Policy in B.C.

“Russia’s a really interesting place right now because nobody really knows what the land policy is,” says Mathews. “I mean, I’m not sure if there was any private land before the revolution, and there certainly wasn’t any after the revolution, yet people have actually used and maintained and improved certain plots of land. Subsequently they’ve come forward and said agricultural land can be purchased. Land that people’s traditional homes are on can be owned. But there’s a sentiment against foreign ownership, not unlike many places in the world quite frankly. Austria and Switzerland being two examples.

“So, I knew the French model (for ski area development), the Swiss model the Austrian model, and I said the British Columbia model is probably best because it is basically 100 per cent state-owned land. You will need to allow some privatization of base lands if you’re going to get financing for hotels and things like that. So we recommended to them… implementing something along the lines of the B.C. Ski Policy.”

Mathews presented his report on the North Caucasus, and his recommendations on ski policy, to the Russian cabinet nearly three years ago. He’s been to the Russian White House three times since and has met the premier and various cabinet ministers during more than a dozen trips to Russia. Five of Ecosign’s staff members have also spent time in Russia as the Whistler company is now working on several projects in the country, including one in Krasnoyarsk well east of the Urals in Siberia.

Investment for development is coming from Russian companies including Gazprom, a huge gas and oil company that supplies about 40 per cent of the natural gas to central Europe. Gazprom is developing Psekahko Ridge, one of the ski areas in the Mzymta Valley that Ecosign designed and assisted with environmental studies last summer. The area should open in December.

Another project in the same area is being developed by a company headed by Vladimir Potanin, a man who owns about one-third of the world’s nickel resources.

“Potanin is about 45 or 46 and went to school with President Putin in St. Petersburg,” says Mathews. “He’s quite committed to building a ski resort to help the whole economy and Putin. He also owns Rosbank, the largest private bank, and is a trustee of the Guggenheim Foundation.”

Putin is a supporter of ski area development in Russia, and is a skier himself. But what about the average Russian?

“I think the Russians will take to skiing like ducks to water,” says Mathews. “They’re all winter people and they know how to dress for winter. So the market in Russia to me, with 150 million population, I would imagine they will become an alpine power. I bet 20 per cent of the population become skiers, and if that happens they are going to become one of the biggest alpine countries in the world. That’s my call on it.”

And contrary to North American cliches and stereotypes, Russians do have disposable income and are consumers, just like North Americans.

“Things are changing so rapidly there. Every time I go to Moscow it’s better, visually better,” says Mathews. “I’ve been going there every two or three months for six years. Streets get paved, flowers planted, buildings renovated… the dress of people, quality of their cars and everything are just… it’s like an order of magnitude improvement every two or three years, much like we’ve seen in China.

“So, I’m pretty optimistic. Even though I’ve been dealing with maybe a little higher ups than normal, the guys on the street are also just measurably better. Their economy seems to be stabilizing quite well. They’re not unlike Canada, they’re living off their resources right now, but they have a lot. So if that’s what it takes they need to do it.”

While Russians are just starting to discover skiing in their country, if resort development in the Caucasus takes off they may not have the slopes all to themselves for long. The federal government’s motivation to encourage ski development was to have Russians spend some of their vacation money at home, but Mathews feels the Caucasus have the potential for 30-50 ski areas which could generate 10-15 million skier visits annually. Eventually that could mean attracting central European skiers.

“That wasn’t their expectation at the cabinet level,” he says. “But I suspect that was a little bit of their own inferiority complex.

“When they asked the guy who’s working on the master plan for Zermatt, Verbier, Laax, Alp d’Huez etc. I told them ‘hey, this thing here is as good as any of them.’ So I think they’re changing a little bit, but at the same time we don’t expect that to be an instant thing.

“If we design and build this the way I think it can be done, I would imagine Europeans will travel there. A) It’s a very good quality experience. B) It will be very affordable in euros or Swiss francs, and C) it’s an exotic experience. I find the service here very different from Moscow, for example. These people are friendly, outgoing, they’re used to serving people. It’s a Mediterranean climate, they grow amazing tomatoes, cucumbers, vegetables and fruit down here, and they don’t use pesticides, because they can’t afford them.”

So if you’re looking to get in on the next big ski area before it gets to big and too expensive look east, way east, beyond all the stereotypes.