Balsams Update - Go Big or Go home

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The claim is that currently the Balsams is a deteriorated facility which has gotten more so since 2011 when it finally closed and then stripped clean by the current owners. There is no significant property tax revenue and more importantly no jobs associated with a defunct resort. Realistically its currently a fire waiting to happen which befell many other grand resorts. The ski area will just slowly grow in after whatever infrastructure that can be removed is removed, like Evergreen Valley in Stoneham (I will make a plug for Jeremy's lost ski areas website). The golf course might try to survive but I expect it will become a hayfield eventually. The theory with making the state loans is that there will be taxable value created due to new construction and that's where the state expects to be paid back. There is the equivalent of a Tax Incremental Financing (TIF) district in place where any increase in property taxes associated with the project goes back to pay off the state loans. There is also the state room and meals tax for a large portion of any money spent by customers. Thus the rational for state and federal loans or loan guarantees.

I think the theory is even if the resort doesn't make it long term that the taxable assets will remain and be a better potential revenue source to the state and county than is what is there currently. The resort claims that even with this warm winter that they kept snow records and they would have had a reasonable winter with low enough temps to retain the snowpack. They are on the same snow track as Jay Peak which usually has snow even on a poor year elsewhere. Generally on low snow winters like the past one Northern NH does seem to keep a snow pack as evidenced by the trucks with Mass plates and trailers full of sleds heading north. The Balsams concept has a pipeline to the Androscoggin River so they have an unlimited supply of water for snow. In past years many of the major resorts in the region are seriously limited on water available for snow making and the Balsams will not have this limitation. Les Otten made his first millions at Sunday River where he bet that snowmaking and extensive terrain was the future and two warm winters in a row proved him right, when other slopes were closed or very terrain limited Les had the snow guns cranking. If he hits a couple of winters in row where southern New England and even the Whites has a low snow year, that could pull traffic up to the resort and some of the skiers will buy into the real estate development which is the real profit maker.

There is also another little known advantage that I expect the Balsams is banking on. Power for the resort is coming from the Coos Grid through the Millsfield Wind Farm. The Coos Grid is currently significantly undersized for the amount of renewable power plants connected to it to the point where there are many days where the power cannot be shipped to southern NH and on to the rest of New England. In this situation the power plants in Coos County are forced to limit their production. With the exception of the Berlin Biomass plant which can be idled, the hydros are run of the river so they don't have much option to turn off and the windfarms have an incentive in place where they can pay to sell power and still make a profit if the wind is blowing. The Balsams is upstream of the congestion point so they have the potential for cheap electric power from the wind farm. The wind farm can also sell power directly to the Balsams without paying transmission fees to Eversource. The combination of the two is a low cost for power which is major competitive advantage compared to other resorts farther south as the electric power to run the snow gun pumps and compressors is a significant portion of a lift ticket.
 
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http://www.colebrookchronicle.com/Aug262016.pdf

For those who haven't experienced a sales presentation from Les Otten there is an article in the Colebrook Chronicle today that give a glimpse of it. Interval Ownership (IE time shares) got a real bad rep years ago and despite Les's presentation it still sure looks like a sucker bet. Then again there reportedly "a sucker born every minute" so I expect there are folks who will take it hook line and sinker.
 
I've inquired on that offer and concluded it was a lousy deal with too much in the control of others over the associated use and maintenance cost/fees. My interest is only in fee simple.

Also, I was turned off by the Disneyworld like character of the comprehensive project. I'd opt for more tranquility and fine dining in such accommodations.

On the other hand, we bought a timeshare, a house sleeping six, on Cape Cod over 30 years ago and have enjoyed it tremendously every year since. A fun family tradition. Bought it knowing it would not be a great real estate investment but at the time needed something like that to force me to take a vacation. From those standpoints it has paid off nicely.

The Balsams deal could turn out to be such a rich experience for some. Plus, there's the gratification of participating in the restoration of this landmark and the gracious living it represented.
 
Thanks for the updates. I think the younger generations are more into the Disneyworld/cruise ship all-inclusive resort vacation. Doesn't appeal to me, but I think I am in the small minority. And a lot of folks these days are not interested in being tied to one location. They like the idea of having mobility. Again, not my bag, but I can understand the thinking. That notwithstanding, it still strikes me that getting people to this remote location will be a challenge, though with population growth in the US continuing to dramatically increase, I suppose eventually the Balsams won't be that remote.
 
A recent piece on the Balsams discussing the Global Warming rational for the project. https://www.abqjournal.com/910379/s...n-bet-big-on-climate-change-proof-resort.html

Interesting coincidence to find it on a day where the temp just got over zero degrees!

I think the kids call it climate change now. It's my understanding that the theory doesn't preclude it from being cold ever, just less consistently. I suspect you were jokin, but when members of Congress believe snow in February is a counter-argument to climate change evidence, I worry that a dangerous failure of reasoning becomes normalized.

I am curious if the snow at the Balsams is truly less impacted compared to areas a couple hours south. The anecdotes in the article don't have much sway with me.
 
That area of NH does tend to hold in the cold longer then the rest of the state. During low snow years, snowmobile folks from southern NH and Mass tend to head north until the trails are open and frequently they end up on the RT 3 corridor heading up toward Colebrook. Jay Peak also tends to get and hold the snow on low snow years in the rest of the region. The area north of RT 2 also tends to hold the cold weather which I suspect its more important then snowfall to the Balsams as its being designed for intensive snowmaking fed from what is an expensive but essentially limitless supply from the Androscoggin River (at least until the environmental effects of significantly more run off back from Dixville Notch to Errol is determined). Realistically global warming is long term event and the Balsams developers have much shorter time frame.

Given the recent election and the strong speculation that the "rich are going to get richer" that may play well into this project.
 
(at least until the environmental effects of significantly more run off back from Dixville Notch to Errol is determined). .

Actually, one of the concerns is that a portion of the water from the Andro will be turned into snow that melts and flows into a different watershed (the Connecticut).
 
I think that issue is one of those to be resolved by a fairly costly study that the developer put on an indefinite hold just about the time that it became apparent that a significant source of future funding is from Northern Pass's checkbook which is closed until NP gets approval.

I do agree that they are fighting topography, the Balsams complex looks like it flows west and the various ski slopes also seem to flow west.
 
Two very different links

First a very nice PR piece.

http://www.bostonmagazine.com/news/article/2017/01/15/les-otten-balsams-ski-resort/

I do wonder how running for governor jibes with being a recluse?

And then a proverbial major thorn

http://www.conwaydailysun.com/newsx...elationship-between-balsams-and-northern-pass

It will be interesting to see it the SEC accepts this request as germane to the NP discussion. I expect if they do it may make for interesting reading although I expect NP will probably try to label it confidential for official interveners' use only.
 
I like how the article concludes by using the phrase "controversial" project. Isn't every project controversial? How about a possible hotel on the Cog? :p
 
It will be interesting to see where it goes from here. More than few contractors were quite disappointed as the date to start work drifted from 2015 to 2016 to whatever the new date will be. I expect most will elect to work on the new Glen House which should be starting construction in about 6 weeks. The marketing effort for the condos has been pretty quiet, I expected if they hit the minimum sales goal it would have gotten a lot of PR. The SEC decision on Northern Pass is in theory out this fall so expect that it will be 2018 before they really start ramping up.

Unlike the Cog hotel, they do have the major permits in place so its a matter of when they want to start spending money once they get some lined up.
 
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I got an email this week from Les Otten/Balsams about "getting in on the ground floor" with condos or something and an overview of what the resort is expected to be. I didn't read the whole thing but I took it as a positive that this is moving forward.
 
Isn't it nice to know that Les's marketing team feels you are potential buyer of one of his time shares ? ;)

Its moving forward in parallel with NP. If NP goes, the Balsams has access to plenty of NP cash, if it doesn't go, I expect the Balsams project will drop out of the headlines and remain what it is today, a very sad reminder of what once was.
 
The "ground floor" opportunity is like a hotel room/suite condo with certain benefits/amenities that'll cost extra if/when the project gets rolling. I reviewed a summary of the offering but decided I prefer "fee simple". However, if you are certain that you like the destination and will spend a lot of time there, it's not a bad deal. They have a rental program for when you're not using it but I didn't see a great prospect of making any money on the rental.

It was a classy place at one time, with activities, food and service commensurate with the price. I fear the ambience will be lost with the disneyland approach. Hope it succeeds though, from the perspective of the local economy and the best use of the assets and history.
 
I think you got it Stan, if someone thinks they will get long term use of it, then a timeshare has its value but realize that its not fee simple, the resort can and will adjust the fees along the way and there will really be no resale market until the entire resort is built out as the developers will always be coming out with new ground floor opportunities. Even though the resort will rent it when its not being used no one should consider it as an investment (except for a bad one). The history of Evergreen Valley http://www.nelsap.org/me/evergreen.html should be reviewed by anyone considering signing on the bottom line. A walk through Les Otten's American Skiing venture http://www.newenglandskihistory.com/skiareamanagement/americanskiingcompany.php should also be reviewed.

The fairly frequent history of these developments is that the resort is an assemblage of multiple ownership entities that all are dependent on each other. Frequently a management company is between these entities and any cash transfers between the entities are managed by the management firm by extracting a percentage fee of the transaction. Even if the entire resort is running a loss the management entity makes a cut of the intercompany financial transactions. The other issue is that if things get rocky, one money losing entity, like the ski area may declare bankruptcy and it gets sold to another investor that may or may not honor the deals made with unit holders. In many cases slopeside condo owners or units along the golf course lose free or reduced cost access to the facilities they were promised and end up either paying a new fee or losing much of the value of the unit. Heck Wildcat at one point sold lifetime passes, they worked under the original owner but ceased to exist under subsequent owners. At least the resort shouldn't suffer the ignominious fate of Evergreen where the ski resort was on WMNF property so the ski lifts were sold and the woods were allowed to grow back with the lodge at the base of a non existent ski area.

I too would really like to see the jobs and upgrade of the Balsams and that's what the developers of the project are banking on. Unfortunately to date their credibility has been stretched as promises made have not been kept. Generally the developers get their cash out quick but the inevitable secondary investors who set up shop on the roads heading to the resort and the businesses who set up inside the resort are the ones that bear the brunt of the damage when expectations are not met.
 
One of my co-workers has a timeshare in Rangeley. He's constantly complaining about the fees and increases surcharges that are tacked on. Its gone from $227 to almost $1k. He said when he first bought it, it was better than a week's stay at any place in the area, now its more.
 
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