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Thread: Balsams Update - Go Big or Go home

  1. #151
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    This is a tough one for the area. The projects timing lined up with a sustained real estate boom that is starting to sputter. It could be the "straw that broke the camels back". Many folks along the RT 3 corridor centered around Colebrook were most dependent on the old Balsams and were banking on the new project. I expect many including myself figured the financing was a house of cards but that ultimately the investments would be made in the resort and then the original developers would cash out and somehow precipitate a financial reorganization so that the resort could keep operating on sustainable debt load. The Jay Peak mess is depressingly a potential parallel, albeit with less entities to sue and get settlements. The only way to make the Balsams project viable is to make it big so it can be developed as destination resort as compared to weekend resort due to the long distances and poor highway access from major markets. It does have the potential to be supported by the "millennial" approach to recreation which is spending on experiences rather than assets, but the business model was predicated on that someone with cash was going to want to buy the units to begin with.

    There has been haggling over the BFA financing since early in the project. The BFA has consistently asked for additional information to the application that the developer was unwilling or unable to provide. Pure speculation on my part is that one of the sticking points was transparency to the public, which generally is not something a developer wants to reveal. The usual sticking points in a complex deal is who holds the most senior debt and how does the revenue flow out to the developers and debtors. Generally a developer puts a minimum amount of their own money into a project and they put in place methods of getting their money out quickly. The banks/credit unions are desperate for investments that pay more than T bills so they are willing to lend but they in theory have strict policies on the risk they are taking. The one exception to that was the Northern Pass money, in the final offer to the SEC it became obvious that the loans were effectively bribes to various entities. NP wrote the money off as a cost of doing business. If the loans got paid they went back into an economic development pool controlled by NP. I expect that this debt became far less "senior" to Service Credit Union's investment which means SCU get paid first if the project fails. With NP money out of the picture I expect the problem is they need some entity with big pockets that is willing to take a back seat to SCU.

    Interesting to note that the current governor was involved for many years with the Waterville Valley resort and he has been very hands off on this project.
    Last edited by peakbagger; 08-29-2018 at 06:40 AM.

  2. #152
    Senior Member skiguy's Avatar
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    Quote Originally Posted by peakbagger View Post

    Interesting to note that the current governor was involved for many years with the Waterville Valley resort and he has been very hands off on this project.
    With all do respect Sir I happen to be a supporter of the Governor and find this comment to be politically offensive. Let's all be transparent here and stick to the facts of the matter within your thread please.
    "I'm getting up and going to work everyday and I am stoked. That does not suck!"__Shane McConkey

  3. #153
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    Not sure where you take offense. I am stating the truth. The governor was involved with the Ski resort ownership prior to running for office. He also has said little with respect to the Balsams project prior to and during his tenure despite it being a major economic project for the Northern Part of the state.

  4. #154
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    Quote Originally Posted by peakbagger View Post
    Not sure where you take offense. I am stating the truth. The governor was involved with the Ski resort ownership prior to running for office. He also has said little with respect to the Balsams project prior to and during his tenure despite it being a major economic project for the Northern Part of the state.
    It's an obvious conflict of interest, as it has been with every other ski related project that has come before the Executive Council from which he has abstained. To be fair, he did weigh in previously saying the loan guarantee didn't make sense.

  5. #155
    Senior Member skiguy's Avatar
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    Quote Originally Posted by peakbagger View Post
    Not sure where you take offense. I am stating the truth. The governor was involved with the Ski resort ownership prior to running for office. He also has said little with respect to the Balsams project prior to and during his tenure despite it being a major economic project for the Northern Part of the state.
    It's about transparency and a potential conflict of interest. Once again I find your statement with it's underlying political tone offensive and not congruent of the guidelines of this board.
    "I'm getting up and going to work everyday and I am stoked. That does not suck!"__Shane McConkey

  6. #156
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    My understanding is that the governor was no longer connected with Waterville valley prior to his election as governor. Not sure if that was so when he was on the executive council.

    I guess Ski Guy feels that there is underlying political tone and I do not.

  7. #157
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    Quote Originally Posted by peakbagger View Post
    My understanding is that the governor was no longer connected with Waterville valley prior to his election as governor. Not sure if that was so when he was on the executive council.

    I guess Ski Guy feels that there is underlying political tone and I do not.
    He resigned from WV after he won the election.

  8. #158
    Senior Member ChrisB's Avatar
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    Quote Originally Posted by JoshandBaron View Post
    He resigned from WV after he won the election.
    Here is an interesting (two-year-old) article about the Govs impact on the resort during his brief tenure as CEO.

    Many of his expansion plans were delayed/thwarted due to regulatory process and procedures. WWV is a private corp so the financials are unknown.

    But, "facts is facts" and we got a governor whose family is in the ski biz. I doubt they give a hoot about the Balsams. It's in another time zone from their operation and they have problems of their own at WVV.

    cb
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  9. #159
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    Quote Originally Posted by ChrisB View Post
    Here is an interesting (two-year-old) article about the Govs impact on the resort during his brief tenure as CEO.

    Many of his expansion plans were delayed/thwarted due to regulatory process and procedures. WWV is a private corp so the financials are unknown.

    But, "facts is facts" and we got a governor whose family is in the ski biz. I doubt they give a hoot about the Balsams. It's in another time zone from their operation and they have problems of their own at WVV.

    cb
    I'm be curious how ski resorts view competition in the industry. I'd think that anything that good for the NH ski industry would be good for most reputable places, but I'm not familiar enough with the industry to get a feel for the answer.

    I can tell you that going skiing in CO (I first skied at Vail in 2002 I believe) has made me want to visit other ski areas other there - and I have: Winter Park, Steamboat, A-Basin, Keystone, Loveland, Cooper, Copper, Breckenridge, and Beaver Creek. I'd argue that Vail's success is what brought me to the other resorts.

  10. #160
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    Quote Originally Posted by skiguy View Post
    It's about transparency and a potential conflict of interest. Once again I find your statement with it's underlying political tone offensive and not congruent of the guidelines of this board.
    Can you expand upon what you mean by 'transparency and a potential conflict of interest'? It's unclear what issues with transparency and conflicts of interest you are referring to.

    I found a quote that indicates the Governor supports the idea, but given the lack of specifics (and now the withdrawal of the BFA application), there might not be a lot the Gov. could weigh in on. Given the Gov.'s potential conflict of interest, being quiet is probably a good strategy. Ultimately he would have to approve the Loan, so a decision was coming down the pipe that appears will no longer need to be made.

    The statements about the Gov.'s involvement with WVV, and hands-off approach with Balsams both appear to be factually accurate. I'd agree with the opinion that it is an "interesting" note, as I'm sure people would have wanted to know the reasons behind the Gov.'s decision - regardless of the decision itself.

    As for any insinuation of impropriety on the Gov.'s account, since it's not clear what would benefit the Gov more (Balsam's failure or success), I think it's hard to assume any intent one way or the other from the statement. That's just my interpretation of it though.

  11. #161
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    Pressing on past real or imagined slights, the caption on this Globe article adds a bit more clarity to the reason for turning down the loan guarantee

    State officials say developer Les Otten’s business plan offers no assurance the loan he seeks would be repaid

    https://www.bostonglobe.com/business...znI/story.html

    I would like to see the source that the Globe used but this would be a non starter for the state of NH. The original claim was the loan would be secured by the tax revenue on the new construction. Even if the resort owner went belly up, there would still be taxes due to pay the loan. I envisioned a TIF district being created where the resort pays the taxes into the TIF and the loan payments are made from the TIF. I expect there were other approaches to making sure it gets paid but unless the state backed debt was senior debt backed by a secure cash flow versus subordinated I don't see how the state would have signed on.

  12. #162
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    Quote Originally Posted by peakbagger View Post
    Pressing on past real or imagined slights, the caption on this Globe article adds a bit more clarity to the reason for turning down the loan guarantee
    I don't get offended by much and I have been called just about everything under the sun but I don't care, so I am not the best judge of what is offensive (I have been told that I am an insensitive asshole) so my question is "Is this somehow offensive or is it just funny?" I say it is great and hysterical.
    "I'm getting up and going to work everyday and I am stoked. That does not suck!"__Shane McConkey

  13. #163
    Senior Member Quietman's Avatar
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    As a NH taxpayer, I welcome this decision. The proposed resort is a bunch of 900-1200 vertical trail pods, unless I am missing something. Lots of acres, but not so much continuous vert. SR is similar, but has pods with 1,500 plus vert. I welcome Les to prove me wrong, but this was a pie in the sky from the start as far as I can see.

  14. #164
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    Quote Originally Posted by Quietman View Post
    As a NH taxpayer, I welcome this decision. The proposed resort is a bunch of 900-1200 vertical trail pods, unless I am missing something. Lots of acres, but not so much continuous vert. SR is similar, but has pods with 1,500 plus vert. I welcome Les to prove me wrong, but this was a pie in the sky from the start as far as I can see.
    As a taxpayer, who don't like the mountain setup?

  15. #165
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    Ok, I'll simplify. I don't trust Les with $28 million, and the layout for the resort is lacking any serious vert that would entice skiers to drive 1 1/2 hours north of 93 or 1 hour past SR on 2 lane twisty roads in winter.

    Gee, why wont a bank lend him the money unless the state guarantees it? Too risky!

    Just my opinion.............

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