When Graham Lee was a student at the University of British Columbia, he was assigned a project to write a business plan that would be viable in the real world. Lee decided to write a plan for a real estate development company—something he had been interested in since he was a kid.
As it turned out, the project was a success. In fact, two years after Lee graduated, he returned to the business plan, and started revising it to start his own company. That was in 1989. Since then, RG Properties has become a successful real estate development and operating company in western Canada.
Initially, RG Properties got involved in industrial properties. “We built warehouses, offices and facilities for companies, such as Goodyear Tires, Alcan Aluminum, and CHC Helicopter Corporation,” says Lee, President and CEO. “Then, we expanded to in clude to commercial real estate development, which we are still pursuing. Right now, we have long-term holdings in shopping centres, a hotel, and major industrial buildings.”
Six years after starting the company, Lee was confronted with another idea surrounding a passion of his: hockey. While he was never a real player, Lee is a Canucks fan and he always enjoyed the spectator aspect of the game. “In 1995, I got involved in the hockey business,” he says. “The first project we did was an arena facility, called Planet Ice. We wanted to do something different than your typical municipality memorial building. Don’t get me wrong, community arenas are fine, but because we weren’t structured under the public sector, we were able to do whatever we wanted.”
Lee’s goal was to give the surrounding community the same experience that he enjoyed in his youth. And that’s exactly what he did. Located in Coquitlam, BC, Planet Ice has four NHL-sized rinks, a sports bar, concession stand, fitness centre and a pro shop.
“At first, Planet Ice wasn’t making much money,” Lee explains. “However, it was a huge success from a community point of view. It filled a huge need for ice time in the city. Municipalities needed more rinks. After a difficult couple of years, things got better and the arena started turning a profit.”
Carving out a niche
Since mid-1990s, RG Properties has added four more British Columbia arenas to their portfolio— enough to make the company an industry leader in developing and operating recreational facilities.
Perhaps their most successful arena is the one in Kelowna. “Around the same time we started on Planet Ice, I was on a plane, sitting next to a City Counsellor from Kelowna,” Lee recalls. “He was talking about this arena they were building, Prospera Place. A year later, that same Counsellor called me, said the developer’s cheque had bounced and asked if RG Properties could do the arena. We finished the 6000-seat facility in 1999.”
“Today, we have had by far the most events than any other North American arena that size,” he beams. “We have had Elton John, Cher and Don Henley, to name a few. The venue brings big performers to a smaller market and that had never really been done before. It’s a huge success for Kelowna. Prospera Place has been voted the best concert facility under 15,000 seats in Canada, by the Canadian Music Industry.”
It might be tempting to think an arena is just an arena, but at that time, RG Properties was a pioneer for the small-market arena development business. “When we built Prospera Place, it was the only building of its kind in North America that had the restaurants, club seats and suites,” Lee adds. “Before that, no one thought it would work in a small market. After cities saw that it could work, quite a few starting popping up all over Canada and the United States, using the same set up that we had created.” Thanks to RG Properties, the bar has been set and the market now knows small private-public partnership (3P) arenas are profitable for the company operating them and the surrounding community.
RG Properties’ 3P innovation and expertise in this type of project is showcased by their 2000 CCPPP Gold Award for Infrastructure (Canadian Council for Public-Private Partnerships). The company won for Prospera Place at the National Awards for Innovation and Excellence.
Watching the market
After 20 years in the industry, Lee has noticed the construction business has become less predictable, overall. “Right now, it’s a little more predictable, because the economy is soft, but on a whole, the business has really transitioned due to costs,” Lee maintains. “There was a period when you could have a really good idea of what your budget was going to be and how to make it work. Today, you don’t really know what you’re going to end up with cost-wise. In the last eight or nine years, there has been greater world-wide demand for building products, particularly in British Columbia. Steel prices are going up. There is an increase in glass prices. Commodities are moving up and down all the time.”
Admittedly, Lee is still concerned about the economy. “Despite promising indications, I think there are underlying issues that could still cause problems,” he says. “We are being conservative right now and not looking to do many things in the short term.”
Having said that, RG Properties is watching the market, waiting for opportunities. “We’re keeping our eyes open, so if things get worse we might buy existing assets of good value that we can hold on to for the long term,” Lee explains. Speaking of long term, the company has a lot of landhold on which they will continue to develop residential, commercial, as well as recreational facilities.
Making a difference
RG Properties has proven its ability to successfully design, budget, schedule, construct, finance and manage development projects from start to finish, and Lee is pleased with how far the company has come. “We are happy where we are, from a company perspective,” Lee smiles. “Now we’re in the process of giving back and doing more charitable work. We are opening our facilities to do big charity fundraisers; for example, we just did an all-day festival for the Sarah McLachlan Foundation. We are trying to take our knowledge and expertise, and apply it to creating legacies and fundraising opportunities.”