Three Sisters “was never [supposed to be] a residential development,” says Casey, his face turning a noticeable shade of red. “It was always supposed to be a golf resort. The provincial government supplied grants for infrastructure because they were supposed to be resorts. That was to be an economic driver in the Bow Valley.”
It’s not just the missing revenue and jobs that infuriates Casey. Canmore and the province have invested millions of dollars in infrastructure, including roads and a new, state-of-the-art waste-water treatment plant in anticipation of Three Sisters’ planned resort. “If the development proceeds as planned, it covers the costs of our up-front investment. But if it doesn’t, it puts the town at risk.”
Despite the ongoing loggerhead between Three Sisters and the town, Spring Creek seems to be flowing along just fine to its 10- to 15-year build-out goal of eight single-family lots, 1,050 condo and townhouse units, three hotels with 200 rooms and 25,000 square feet of commercial space. The place buzzes with activity. Landscapers are busy planting poplars in the courtyard, and construction workers are putting the finishing touches on Rundle Cliffs Mountain Lodge, a luxury multi-family unit that allows owners to periodically rent out their properties through an in-house vacation home rental management agency.
Perhaps the biggest reason for Kernick’s success is that he knew exactly what he was getting into. A local boy and experienced Canmore developer, he was well acquainted with the town’s political process.
Born 47 years ago, Kernick left town for an engineering degree at the University of Calgary. After a few years making aluminum beverage containers, he returned to Canmore to start “developing communities.” First on the list was Canyon Close, a 49-lot residential subdivision at the base of Grotto Mountain. Next was Grotto Mountain Village, a 125-lot residential community for mobile homes. After that it was the 417-lot Eagle Terrace residential project, overshadowed by Mount Lady MacDonald.
Now that he’s just finished building a hotel near the Calgary International Airport and a 285-unit residential community in Windermere, B.C., his attention is again fixed firmly on Canmore, specifically on the land his grandfather had purchased in 1927, when it was a dairy farm. Just as Dad had done, Kernick bought out his father (and uncle) and prepared to turn their Restwell Trailer Park – the mobile home park and campground they’d built on the land in the mid-1950s for employees of Canmore’s booming coal mine – into a 21st century real estate development his grandfather could never have imagined.
It took only four years for him to purchase the land, plot out an area redevelopment plan that the municipal government quickly passed and, by 2006, build and sell all the units in Spring Creek’s first multi-family building. Now he’s ready to start building number 4. All the while, the 175 mobile homes that will remain on the property for another decade or so are each generating $500 a month in lease payments.
Three Sisters, in contrast, took roughly a decade to build anything more than a golf course that could generate revenue. Three Sisters’ bankruptcy application states that one of the factors contributing to the developer’s insolvency was “the lengthy and complex processes associated with developing property in the Canmore area,” which “constrained cash flow even before the economic downturn.” What the application doesn’t say is that Three Sisters has had four owners and several different plans over the last two decades, changes that consumed more time than was anticipated.
Another difference is that, unlike Three Sisters, which sold lots to builders who then built and sold homes, Kernick has built something of a miniature empire to make Spring Creek a reality. He not only owns the land, but he’s also building the homes, condos and hotels (which he’ll run, too). He even owns the construction and landscaping equipment, and will operate Spring Creek Vacations, which will manage short-term rental units, as an in-house division.
“I’ve cut out the middlemen,” he says. “I can plan for the future better because I own the land. We know our margin and we can control it.”
Kernick also maintains that by keeping his prices reasonable, the recent downturn has affected him less than other developers. While some condos have dropped $50,000 or more in the last year, he hasn’t reduced prices at all. His buildings are almost all sold out and he’s pushing ahead with new ones.
Some locals are concerned that Kernick, like Three Sisters, will all but forget about the hotels.
“I will build mine,” he says emphatically. “I’ve always had a vision and a plan, and I’m committed to seeing it through. This is my legacy project.”
It’s hard not to believe him. As the baby boomers prepare to retire at exactly the same time as Kernick finishes the pièce de résistance of his development portfolio, it seems inconceivable that it won’t succeed.
Besides, there are strong signals that the market is beginning to rebound. Although Kernick says “everyone was affected” when the economy collapsed last year and local real estate sales fell off, he doesn’t seem concerned. Even with Three Sisters in receivership, customers are starting to visit its sales office again, like songbirds returning to the Bow Valley after a long winter.
“I’m bullish,” says Kernick. “I think we’ve turned the corner.”
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