Mt. Snow EB-5

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EB-5 solution sought at Mount snow

Posted Monday, September 11, 2017 9:12 pm

By Mike Faher, Special to the Reformer

DOVER — Mount Snow administrators have asked the
federal government to "expedite" approval of an independent EB-5
regional center in Vermont so they can solicit more foreign investment before
year's end.



That news came Thursday as Peak Resorts, Mount Snow's Missouri-based parent
company, reported its latest financial results.



Analysts asked the company several questions about the troubled EB-5 investment
program. In response, Mount Snow leaders said they are working hard to separate
the Dover resort's expansion plans from Vermont's EB-5 center, which federal
officials have threatened to close.



"Going forward, we don't believe that [the state] is going to have a major
impact on our ability to raise funds, because we'll be raising those funds out
of our own regional center," said Tim Boyd, Peak's president and CEO.
"We will not be raising them through the state of Vermont's regional
center."



The federal EB-5 program, which offers visas and permanent U.S. residency to
foreigners who invest in job-creating projects, has been driving growth at
Mount Snow.



The resort raised $52 million in its first EB-5 offering. After a prolonged
federal approval process that caused financial stress at Mount Snow and Peak,
the companies gained access to that money in December and quickly put it to
use.



Mount Snow administrators in June broke ground for their new, EB-5-funded
Carinthia Lodge, which is expected to be ready for the 2018-19 ski season.



Foreign investment also is paying for the 120-million-gallon West Lake
snowmaking expansion at Mount Snow. During Thursday's earnings report, Boyd
touted that project several times and said it is "ahead of schedule and
nearly complete."



"We expect to have it fully filled by early November, when we'll begin to start
making snow," he said. "The long-term benefit that will be realized
here will be our ability to open more terrain quicker, (and) that will result
in more skier visits (in the) early season for us."



Mount Snow is eyeing a major housing expansion for its next EB-5 project - the
creation of 102 luxury condominium units with "ski-in, ski-out"
access.



But the EB-5 program, coordinated in Vermont through a state-operated regional
center, has come under intense scrutiny due to allegations of large-scale fraud
at Jay Peak Resort.



Citing the Jay Peak scandal, U.S. Citizenship and Immigration Services last
month announced plans to close the state's EB-5 regional center. State
officials vowed to appeal that decision, arguing that the center should be
phased out slowly rather than shut immediately.



Mount Snow administrators hadn't commented on that development until Thursday,
when Boyd brushed aside concerns about any fallout for the resort's expansion
projects.



"From our perspective, the problems that the state of Vermont has had are
all centered around the Jay Peak project," Boyd said. "That part of
it hasn't had any real effect on us." Mount Snow previously has signaled
its intent to establish its own EB-5 regional center in order to continue
pursuing foreign investment. But Boyd disclosed that the company asked
Citizenship and Immigration Services to approve a new regional center in
December, months before that news was made public.



"It was always our plan, once the state started having problems with the
Jay Peak issue, to move out of that regional center and move into one of our
own so that we aren't associated with that state organization," he said.



The question is whether federal officials will approve Mount Snow's EB-5 center
and, if so, how soon. Boyd said the company is awaiting "final
approval" but also said administrators have tried to nudge the federal
government into action.



"We actually recently have made a request to have that expedited, so we
can get that approved so that we can use that for our next offering coming
up," Boyd said.



Citizenship and Immigration Services officials said they were unable to provide
information about any application from Mount Snow or Peak Resorts.



A USCIS spokeswoman said the agency currently is considering regional center
applications submitted on or before December 25, 2015 — a full year,
apparently, before Mount Snow's application was submitted.



Boyd sounded optimistic that a favorable decision is forthcoming. "We
expect to be able to get out our next (EB-5) offering sometime before the end
of the year," he said. EB-5 issues aside, Peak leaders also said they were
optimistic about the upcoming ski season at their 14 resorts. The company has
said sales of its "Peak Pass," which offers access to seven resorts
including Mount Snow, are up about 9 percent over last year.



Boyd said he's not worried about the recent expansions of Vail Resorts, which
earlier this year acquired Stowe Mountain Resort, and KSL Capital Partners,
which now controls Stratton Mountain Resort.



"Their presence in our markets is still very limited," Boyd said.
"We don't anticipate at this point in time that they're going to have much
impact."



Mike Faher writes for VTDigger, the Brattleboro Reformer and The Commons. He
can be contacted at mfaher@vtdigger.org.

Comments

  • obienickobienick expert
    Posts: 853
    One thing I've never quite understood. EB-5 is about job creation. How can it be possible to use EB-5 funds on things like new base lodges and snowmaking improvements?
  • slathamslatham advanced
    Posts: 121
    obienick said:

    One thing I've never quite understood. EB-5 is about job creation. How can it be possible to use EB-5 funds on things like new base lodges and snowmaking improvements?



    First, I believe there is also EB-5 funding available for job retention.

    As for base lodge, its part of the broader base redevelopment that will include housing and full time employees around that, not to mention the added customer visitors to Mt Snow. Also, if the lodge itself is bigger, say with a larger cafeteria, you need more staff, etc...

    Same for snowmaking. You might need more snowmakers, and groomers to groom it out. More trails open means more lifts, so more lifties. And of course more snowmaking means more customers which means more staff in general.

    It adds up, and the EB-5 requirements are not huge regarding the number of jobs required, though I can't recall what they are. 


  • NELSBEERNELSBEER advanced
    Posts: 222
    Snowmakers, groomers on the hill. If weather cooperates an earlier & busier season is feasible... adding Thanksgiving to peak Xmas, MLK & winter vacations could employ a lot of people for a much longer time. Holding out a carrot like 25-30 trails open at the Boston Ski show, with live cams and video to back it up would get a lot of kids on their parents cases & all us diehard skiers out for an early and longer season. A lot of restaurants/lodging take a tween season hiatus as well. A direct move/overlap from leaf viewing and mountain biking might allow them to stay open. This preserves staff as well, a good thing as the labor market tightens up.

    As Mount Snow expands its owned base of condos (all the new ones built will be company owned for at least 10 years) there will be increased pressure to provide entertainment/services to keep them rented. Who knows what direction this will move in: Water Parks, Spring/Summer skiing, horseback riding, white water rafting, guided bike tours (mountain or road), Ice/Tiki/umbrella Bars. All involve wore staff...
  • DrJeffDrJeff advanced
    Posts: 273
    One has to remember that it's not just jobs created at Mount Snow proper, but jobs created (or retained) within the general area. So if a new restaurant opens as a result of more people coming to the region, those jobs from that restaurant count.  If more people decide to buy properties in the area and want to renovate post purchase and contractors need to hire more workers, those jobs count into the job creation equation that EB-5 uses.  

    Do I believe that all the jobs the EB-5 money is supposed to create or retain will actually happen?  Nope.  Am I, as a Mount Snow regular and property owner in the area THRILLED that this is all happening to my home hill and the surrounding region? 100% yes! 
    :D
  • mtsnow123mtsnow123 advanced
    Posts: 295
    DrJeff said:

    One has to remember that it's not just jobs created at Mount Snow proper, but jobs created (or retained) within the general area. So if a new restaurant opens as a result of more people coming to the region, those jobs from that restaurant count.  If more people decide to buy properties in the area and want to renovate post purchase and contractors need to hire more workers, those jobs count into the job creation equation that EB-5 uses.  


    Do I believe that all the jobs the EB-5 money is supposed to create or retain will actually happen?  Nope.  Am I, as a Mount Snow regular and property owner in the area THRILLED that this is all happening to my home hill and the surrounding region? 100% yes! 
    :D
    Great point! I'm assuming there will be quite the leakage from the advancements done at Haystack (Hermitage). That's if the numbers are measured in the Deerfield Valley in general.
  • DrJeffDrJeff advanced
    Posts: 273
    mtsnow123 said:

    DrJeff said:

    One has to remember that it's not just jobs created at Mount Snow proper, but jobs created (or retained) within the general area. So if a new restaurant opens as a result of more people coming to the region, those jobs from that restaurant count.  If more people decide to buy properties in the area and want to renovate post purchase and contractors need to hire more workers, those jobs count into the job creation equation that EB-5 uses.  


    Do I believe that all the jobs the EB-5 money is supposed to create or retain will actually happen?  Nope.  Am I, as a Mount Snow regular and property owner in the area THRILLED that this is all happening to my home hill and the surrounding region? 100% yes! 
    :D
    Great point! I'm assuming there will be quite the leakage from the advancements done at Haystack (Hermitage). That's if the numbers are measured in the Deerfield Valley in general.
    The other thing as well, if I recall from the original EB-5 explanation that the Mount Snow folks gave a few years ago, is that the area over which this job growth and/or retention will be looked at is the majority of both Windham and Bennington counties, since they are deemed in the eyes of the federal gov't as "economically depressed" and as such are looked favorably upon by the gov't apparently for projects that will hopefully lead to job growth.  This situation become even more dire in the eyes of the administrators of the EB-5 program with the closing of the VT Yankee Nuclear Plant which took away a number of good paying jobs from the Windham County tax rolls....
  • mtsnow123mtsnow123 advanced
    Posts: 295
    DrJeff said:

    mtsnow123 said:

    DrJeff said:

    One has to remember that it's not just jobs created at Mount Snow proper, but jobs created (or retained) within the general area. So if a new restaurant opens as a result of more people coming to the region, those jobs from that restaurant count.  If more people decide to buy properties in the area and want to renovate post purchase and contractors need to hire more workers, those jobs count into the job creation equation that EB-5 uses.  


    Do I believe that all the jobs the EB-5 money is supposed to create or retain will actually happen?  Nope.  Am I, as a Mount Snow regular and property owner in the area THRILLED that this is all happening to my home hill and the surrounding region? 100% yes! 
    :D
    Great point! I'm assuming there will be quite the leakage from the advancements done at Haystack (Hermitage). That's if the numbers are measured in the Deerfield Valley in general.
    The other thing as well, if I recall from the original EB-5 explanation that the Mount Snow folks gave a few years ago, is that the area over which this job growth and/or retention will be looked at is the majority of both Windham and Bennington counties, since they are deemed in the eyes of the federal gov't as "economically depressed" and as such are looked favorably upon by the gov't apparently for projects that will hopefully lead to job growth.  This situation become even more dire in the eyes of the administrators of the EB-5 program with the closing of the VT Yankee Nuclear Plant which took away a number of good paying jobs from the Windham County tax rolls....
    Hmmm, build a biomass power plant in the Deerfield Valley to create jobs and local energy. I can only imagine the impact of the taxes that Entergy spilled into the county. 
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