Silver turns to gold

KELLOGG – Five hours after leaving his home in Newport Beach, Calif., Richard Grundburg can be snowboarding at Silver Mountain Ski Resort.

A direct flight from Los Angeles to Spokane makes the trip to Kellogg comparable to driving to Lake Tahoe or Mammoth Mountain for the Southern California businessman. But in terms of lift tickets and real estate, Kellogg is a fraction of the cost of the better known ski destinations, said Grundburg, the owner of a $300,000 condo in the unassuming former mining town.

“I didn’t care about chi-chi restaurants or glitz,” he said. “I’ve got plenty of that in California.”

Buyers like Grundburg are transforming Kellogg’s landscape. A century ago, the town was a hub for prospectors hoping to strike it rich on North Idaho’s silver and lead ore. Now, the sought-after commodity is affordable ski property in a revamped Superfund site.

Developers have eight projects in the planning or construction phases, which could eventually bring 3,000 new condos and single-family dwellings to Kellogg. The real estate offerings are aimed at an affluent but bargain-hunting crowd — people who want resort property but lack the net worth to buy into Park City, Sun Valley or Aspen.

The new construction is a sea change for Kellogg, a working-class town of 2,400 people whose economy never fully recovered from the loss of 2,500 jobs at the Bunker Hill Mine and Smelter complex in the early 1980s.

Two years ago, when Silver Mountain first began advertising 346-square-foot studio condos for $100,000, skeptical locals wondered who would buy them. Now, speculation centers around the profits outside investors earned from flipping the units.

Silver Mountain has since sold out two more phases of condos, with penthouses priced up to $800,000. The next project is Galena Ridge, an 18-hole golf course and up to 900 residential units on 565 acres that were part of the Bunker Hill complex. Redeveloping the site will reclaim part of an area that “built the Silver Valley,” according to Silver Mountain officials.

A San Diego developer, meanwhile, is building the 21-unit Alpine Village Resort in Kellogg, with condo prices ranging from $180,000 to $980,000.

Elsewhere in town, Creekside Funding, a Utah development company, plans to start construction this spring on 150 units in a phased development that could eventually put 1,028 condos and homes on a hillside overlooking Kellogg’s eastside. Other developers have bought up historic brick buildings for condo renovations.

$800,000 considered affordable

Affordability is a common theme in the developers’ marketing pitches. On the national scene, ski property priced between $400,000 and $1 million is considered low-end, according to Dennis Hanlon, president of the Rocky Mountain Resort Alliance. But affordability, naturally, is in the eye of the beholder.

“Locally, when someone hears that a two-bedroom unit sold for $800,000 in Kellogg, Idaho, they’re shocked,” said Stephen Lane, Silver Mountain’s marketing director. “You tell someone in Tahoe, and they say, ‘What’s the catch? Is it next to the maid’s closet?’ “

Interestingly enough, Silver Mountain counts a growing number of Inland Northwest residents among its condo buyers. Some of those families have been priced out of a lakefront cabin, so they’re buying a ski condo instead, Lane said.

Kellogg is an opportunity for the affluent “but not wildly rich” to buy resort property, said Jeremy Jensen, president of Creekside Funding.

Grundburg, 35, and his wife bought their two-bedroom condo two years ago, dividing the $300,000 cost with a business partner. The couple wanted a place for family recreation with their two preschool-aged sons, as well as a real estate investment for future appreciation.

Buying into a 21-square-mile Superfund site initially gave Grundburg pause. But after researching state and federal programs to remove or contain soils polluted by historic mining waste, he said he felt comfortable with the purchase.

“It’s a lot of value for the money,” he said of the condo. “My friends in LA said, ‘You’re going to a Superfund site where?’ Now, I’m the one laughing.”

The Grundburgs bought one of Silver Mountain’s condos, whose “eclectic mining” architecture includes corrugated metal accents and crossbeams reminiscent of mining timbers. Buyers appreciate the touches, said Neal Scholey, Silver Mountain’s director of real estate sales. When he shows condos to prospective purchasers, they’re often more interested in the historic mining photos in the hallways than the furnished units’ earth-tone decor.

Mining gone from Kellogg

But like many new real estate developments, the condos pay homage to something that has disappeared.

In other parts of Shoshone County, 485 workers still make a living from hard-rock mining. But the industrial process of blasting ore from underground caverns, crushing it into powder and extracting the minerals has been scrubbed from Kellogg. In the early 1990s, community leaders rewrote Kellogg’s comprehensive plan, purposefully removing heavy industrial zoning from within city limits.

It was a calculated decision, said Walter Hadley, Kellogg’s planning administrator. City leaders had pegged their future to resort development.

“If you truly wanted to pull it off and become a destination that people would want to come to, it wasn’t compatible to have smelters adjacent to condos and golf courses,” Hadley said.

Some old-timers still believe that mining will come back to dominate the local economy like it did in the 1950s and 1960s, he said. “I hope it will come back. … But it won’t be in downtown Kellogg.”

Keith Dahlberg sometimes has trouble recognizing the town where’s he’s lived for nearly 40 years. When Dahlberg moved to Kellogg in the late 1960s, smelter stacks belched sulfur dioxide smoke over the valley.

“Everyone said you can’t do anything about it — that’s the smell of money,” said the retired physician. “It still was a nice town.”

Jobs were abundant and community involvement was strong, he said. Dahlberg often wonders how a wealthy, part-time population will affect Kellogg.

“It will probably be pretty interesting to people-watch,” he said. But the new residents won’t have kids in school. They won’t coach Little League, or volunteer to sit on the planning commission or work on PTA boards, Dahlberg said.

“A lot of them won’t have any accountability in terms of being local citizens,” he said.

Wine tastings and tapas

For Dale Brown, Kellogg’s transformation is long overdue. Brown and his wife are former New Yorkers who moved to Kellogg in 1989. They’d spent two years searching for an ideal retirement place after Brown took an early buyout from the airlines.

“One of the big reasons we moved here was Silver Mountain,” Brown said. “We had seen other ski resorts grow… I went to Breckenridge in the 1960s when it had a single chairlift. A friend tried to get me to buy a condo, but I thought, this place isn’t going anywhere.” He said he turned down a similar real estate opportunity in Utah’s Park City.

The Browns arrived in Kellogg shortly before a $17 million gondola began ferrying skiers to the top of Silver Mountain, replacing a windy, dangerous, seven-mile drive. Brown became a Realtor and got involved in local economic development efforts. He predicted a real estate boom by the mid-1990s.

But years passed with Silver Mountain attracting primarily day skiers. Silver Mountain’s first condo launch two years ago finally leveraged other real estate investment, Brown said. The ski hill is owned by Jeld-Wen Communities, an Oregon company also known for its residential golf developments.

“I think that quietly, there’s quite a transformation going on,” said Bill Rathbone, a San Diego attorney who’s developing the Alpine Village Resort.

On a recent weekday, Matt Lazarus, the owner of the year-old Mountain Tapas restaurant in Kellogg, was searching for linguisa, a smoked pork sausage. He planned to serve it at a sold-out wine tasting — relatively new territory for a traditionally blue-collar town.

When condo owners reach a critical mass, more fine dining and shopping establishments will emerge, helping revitalize Kellogg’s commercial district, Rathbone said. His projects are part of the transformation. Alpine Village Resort’s first phase of 21 condos is scheduled to open in June. Rathbone has three to five more condo buildings planned.

Grundburg, the condo owner from Southern California, said he’s reveling in Kellogg’s undiscovered state while he can.

“My snowboarding’s gotten so much better because there aren’t any lift lines,” he said. “You don’t have to wait 15 minutes for a 10-minute run. …But I know that’s not going to last.”