Jay Peak & Burke...

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Jay Peak - Too good to be true owners charged with EB-5 fraud

https://finance.yahoo.com/news/sec-vermont-allege-ski-resort-191625870.html

Pretty sad for Northern VT. There were many promises of long term manufacturing high tech jobs in Newport that kept falling through. Given the exchange rate, I expect the Canadian traffic was way down this winter. The vultures should be heading in to pick the carcass of the resort.

It probably puts the final nail in the coffin of Burke Mountain which has struggled through multiple owners and failed attempts at development

I expect parallels will be made with the proposed Balsams project now that the Balsams sketchy financing has come out. Bill Steger is a real pro at telling folks what they want to hear.
 
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Seems a bit cold pb.

Our trip this year showed the mountain as busy as it was last year. I did notice less French-speaking, but otherwise no noticeable change. They don't make a ton of snow, normally get more than enough naturally, so their conditions for much of the year were worse than some others. If there was an affect in their traffic, that would be the root cause, IMO.

Their tree-skiing was still very good, however. The snow's there...just have to know where to find it.

Jay's so self-enclosed, it would be curious to see how the carcass could be picked over. The folks at the Resort are operating under "status quo" and one of the existing operations has been put in charge, for now.
 
In several of the articles there is photo graph of the financial structure of the fraud. Unfortunately it appears that they have assets so comingled that even if there is viable financial model somewhere, extracting it out of the non performing assets is going to take awhile and ultimately the way that is done is bankruptcy. Operating under status quo sounds like a nice way to go, but the numerous creditors and investors all most likely have paper coming due and until a bankruptcy filing is made each creditor and investor will be filing liens and attachments on every asset to the point where the business cant continue. Optimistically, if there is a viable business plan buried under the fraud, the bankruptcy is consolidated and a plan of reorganization is filed and if lucky there is debtor in possession financing issued to allow the business to continue operating until the entire mess is cleared up. Given the extent of the fraud I would far more expect that the assets will be consolidated and sold at auction eventually either as one package or in individual lots which ever is higher. Unfortunately, there will be multiple entities that will be challenging the process so it may take a few years to resolve and during this period the resort would not have the operating capital to run.
 
http://vtdigger.org/eb5-an-investigation/ has been on this case for several years. It is much more complex than just the Jay Peak resort: add in an unfinished hotel at Burke Mountain, a hole in the ground for an unbuilt biotech plant, and millions spent on upgrades to the Newport airport. Plenty of blame to go around and lots of folks are going to be hurt financially and in terms of reputation (lots of politicians hoodwinked).
 
Money Talks?

What got this party started was the federal EB-5 program, which helps foreign investors get U.S. residence in exchange for investments that lead to the creation or preservation of at least 10 jobs!

Maybe allowing wealthy foreign nationals to buy their way into the country isn't such a good idea after all.

Give me Les Otten any day!:)

cb
 
There was a good article in today's (or maybe yesterday's...) Caledonian that was very reassuring. Quiros is basically persona non grata in the area, but Bill Stenger is staying on as a consultant, and Steve Olson, who is running the place for the management company that was brought in seemed appreciative. He also completely seems to "get" it -- first order of business will be rebuilding the bridges that Quiros burned (e.g. with the Kingdom Trails group), and keeping everything running smoothly. And removing the "Q" from QBurke, which the locals found indescribably irritating. They'll be thrilled with that particular development.

We live in the western Whites and only made it to Jay once this year, but there was a good crowd there for a midweek day. I think they were doing Canadian at par again for lift tickets, so that was a help for the Canadians.
 
A fairly extensive report on the Jay Peak fraud

https://www.bloomberg.com/features/2016-eb5-northern-kingdom/

It doesn't cover the Burke mountain mess. Burke recently opened the new lodge complex. It was only partially finished when the EB-5 fraud stopped everything. The local contractors on the project who are all out of big money had a choice of finishing it on their own dime in hope of getting some money back if and when its sold as a completed project or just walk way and get a far lower payback for the sale of a partially completed project. I expect both ski area are hoping a major snow year will boost the financials so that a new buyer will take the hook.

Why does the Balsam project come to mind when I read this ;)
 
Sadly Rite Aid corporation did the same thing in Berlin NH. They bought out a mix of occupied and unoccupied properties in the middle of Berlin NH, drove out the businesses and then let the buildings deteriorate until they started falling down. Berlin stepped in to have them stabilize the buildings and Rite Aid demoed the entire block leaving a gravel lot in the center of town. Rite Aid wasn't a total fraud like the Newport project was but they did get caught going on a expansion binge that was unsustainable.

Newport is a nice town to visit, they are right on the lake and the public waterfront access is great. Some nice paddling on the Black River that runs right into the south bay. Skiers just driver through it in the winter when it can be quite drab. Not sure if its still there but the hardware store has ice cream stand that is open well into early winter. If the exchange rate is good they get a lot of Canadians visiting to shop but lately its shifted the other way.
 
Why does the Balsam project come to mind when I read this ;)
Because it is another tainted level of rhetoric you are trying to make as an unrealated subject that has nothing to do with the Balsam project. I'm sorry but once again you are trying to correalate and connect projects which are really unrealated. I find it interesting that the Moderaters here give you the space to express your political ideals which is stated as something that is really not to be a part of this board so stated in the rules of this board. I challege you and the Moderaters to stand tall and really get back to a stance here to talk about hiking and what makes that work and get off of bashing the ski areas. peak bagger when was the last time you and some of the others here that have a hair trigger that put down skiers got off there rumpus and realize that skiers are hikers too. Unlike hikers that are not skiers. Really get off it and realize that most of us see a bigger picture.
 
I don't agree with you and you obviously think I have something against skiers, I don't and don't know why you think I do. I am against shady if not ultimately criminal practices that do damage to local businesses, regions and individuals. Skiers especially those who elect to buy into housing are ultimately impacted by projects that fail due to byzantine financial manipulation. In any Ponzi scheme there are winners and in Jay Peaks and Burke's case, at least a portion of the upgrade to the facilities were reportedly funded by diverting funds from EB5 investors of other projects. Sure the skiers get a free ride for a few years with improved facilities, but if the financials don't pencil out its not sustainable, eventually the resort turns into a Saddleback or Evergreen Valley. The skiers can always go to another area but the folks who bought into the failed scheme and the locals who live here by choice or by lack of any opportunities don't have that luxury.

In the case of the Balsams, the scope of the project is much larger than the current footprint of the current resort. It will impact forever "sensitive wild areas" with a substantial increase in footprint and with expected subsidiary development it will change the surrounding area . I personally think its a potentially major improvement to the area, but only if the underlying financials are such that its not a boom and then bust. At first Les Otten came into the area and represented that he had the financing in place and had to act quickly or the opportunity would go away. Numerous state agencies, non profits like the AMC, American Rivers and SPNHF all did their best to let the project proceed despite significant concerns. As deadline after deadline about start of construction has been missed, the veracity of Otten's claims are legitimately being questioned. Minor little details like the inadvertently revealed past and future substantial subsidy by Northern Pass and the out right arm twisting by Les Otten of local political boards to change their stance against NP, which should have no linkage with the Balsams, also calls into question how solid the financing in. The recent reveal that the project will die without significant escrowed deposits for what are essentially time share vacations from prospective owners is another indication that the financials are not solid as represented. The intentional delay of filing for a key state permit due to cost is also indicative that things are less secure then represented.

Thus the linkage of two large ski resort projects in what is traditionally the areas of interest to some on the board based on redevelopment of what effectively were failed/marginal ski areas financed by suspect financing at best and potentially fraudulent in Jays and Burkes case is in my mind legitimate.
 
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Because it is another tainted level of rhetoric you are trying to make as an unrealated subject that has nothing to do with the Balsam project. I'm sorry but once again you are trying to correalate and connect projects which are really unrealated. I find it interesting that the Moderaters here give you the space to express your political ideals which is stated as something that is really not to be a part of this board so stated in the rules of this board. I challege you and the Moderaters to stand tall and really get back to a stance here to talk about hiking and what makes that work and get off of bashing the ski areas. peak bagger when was the last time you and some of the others here that have a hair trigger that put down skiers got off there rumpus and realize that skiers are hikers too. Unlike hikers that are not skiers. Really get off it and realize that most of us see a bigger picture.

I have enjoyed peakbagger's posts and learn a lot from them. To me, my engagement in New Hampshire and White Mountains region is more than just the trail or waterway, whatever season I enjoy them, it is about local issues that may effect the things I like or are of tangential iterest ... sometimes for no more than intellectual curiosity . Struck me he's always been careful to avoid a political slant but we are all free to express opinions relevant to topical items as long as we are civil about them. Perhaps what offends some people is that VFTT has a standard of civility enforced by the moderators, and accuracy enforced by the participants. VFTT has long been a reliable source of information for me ... even of some therapeutic value when I can't be out there myself ... and peakbagger has long been a major contributor to that experience.
 
I challege you and the Moderaters to stand tall and really get back to a stance here to talk about hiking and what makes that work and get off of bashing the ski areas.

[Mod Hat]
I don't see anything here as bashing ski areas. Employment in the north country, and expansion of ski areas on National Forest land and expanding into other hiking terrain is on topic for VFTT. We have threads on a variety of issues that aren't specifically hiking related but still have impact on the community (Northern Pass, windfarms). As long as people are respectful of others these topics are of interest to lots of our readers. While we do have rules against political posts, there's nothing here that rises to the level or partisan political rhetoric.
[\Mod Hat]

As a poster and a skier, I echo many of peakbagger's concerns. I think the fiasco at Jay/Burke is relevant to the expansion plans for The Balsams which I doubt will ever move forward at this point.
 
As a poster and a skier, I echo many of peakbagger's concerns. I think the fiasco at Jay/Burke is relevant to the expansion plans for The Balsams which I doubt will ever move forward at this point.

Thanks, I was going to post on this last night but you have now echoed my thoughts so it is unnecessary. As much as the north country really needs this, I can't see that it is feasible in any way.
 

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