Balsams Ends Loan Request

BALSAMS APPLICATION WITHDRAWN FROM NEW HAMPSHIRE BUSINESS FINANCE AUTHORITY
DIXVILLE, N.H. (August 27th, 2018)
“The Balsams Resort redevelopment team, through its lead lender Service Credit Union (SCU), has withdrawn its application for a loan guarantee through the New Hampshire Business Finance Authority (NH BFA). Despite collectively working with all parties for several months to find a collaborative solution to advance a $28 million Tax Assessment Bond with a State of New Hampshire Loan Guarantee, the conditions ultimately required by the Authority do not allow SCU and the Balsams to proceed.
SCU, the state’s largest credit union, began working with The Balsams in the spring of 2017, filling the role of lead lender relating to the $28 million loan. An application was submitted by SCU to the NH BFA in December 2017. After spending many months working through the Authority’s process, the withdrawal results from positions taken by the NH BFA on loan guarantee conditions that were unfortunately not contemplated by The Balsams and are inconsistent with its historical understanding of the proposed transaction.
‘Service Credit Union has been a tremendous organization to work with,’ said Balsams lead developer Leslie Otten. ‘They have worked extremely hard towards facilitating The Balsams rebirth and helping to lift up New Hampshire’s North Country economy.’
The Balsams development team is deeply disappointed by this outcome and believes that the redevelopment plan in place remains a tremendous economic development opportunity for the region and the entire state.
‘I have worked on the Balsams redevelopment for close to five years, as I truly believe in the vision and opportunity to revitalize the North Country with thousands of new jobs and hundreds of millions of dollars of new investment,’ said Otten. ‘The market has responded to our proposed development very favorably, as we have collected deposits on more than $25 million worth of real estate. Unfortunately, the Authority is not willing to follow through on the project’s financing structure contemplated three years ago with the passage of Senate Bill 30. While I am appreciative of the collective efforts of all parties involved in the process, this is not a route we can continue to pursue. I remain supportive of economic development in the North Country but will need to take some time to reassess our approach to financing the re-development of this wonderful property.’
The $28 million loan from SCU is an integral component of the Balsams proposed $170 million renovation and expansion of the iconic Dixville Notch resort. The consideration of a state loan guarantee was enabled by the passage of Senate Bill 30 in 2015, which allows for the creation of a tax assessment district in Dixville, whereby property taxes paid on all future Balsams real estate assets will service the $28 million loan.
About the Balsams redevelopment:
The Balsams’ redevelopment proposal includes reconstructing the historic Dix House, and renovating the historic Hampshire and Hale Houses, as well as restoring the acclaimed Panorama golf course and clubhouse designed by pioneering golf course architect Donald J. Ross. The Balsams’ Lake Village, which will encompass the Dix and Hampshire Houses, will feature a new Lake Gloriette House hotel, a 600-seat conference center, Nordic baths and spa, a performing arts center and an open-air marketplace. The resort’s fine cuisine and chef training programs, known worldwide, will return through multiple culinary options around the resort. All will embrace the farm-to-table concept by sourcing locally-grown meats, produce and dairy. The plan also includes expanding The Balsams Wilderness Ski Area into one of the largest, most technically advanced ski resorts on the East Coast.”
https://thebalsamsresort.com/balsams-withdraws-bfa-application/

Comments

  • Something tells me the balsams wouldn't have been successful being so remote, but who am I to say. Montreal is not too far off.
    ~Rich~
  • It looks like NH learned one of the lessons of the 38 Studios fiasco: Never make a large loan of this sort for a project with seriously questionable economic prospects without the personal guarantees of the principals.

    While the article does not state this, it seems pretty clear to me that the breaking point was that Les Otten would not personally guaranty the loan. If that's correct, it says all that needs to be said.

    It's really difficult to see how this project would have economically succeeded even if they got the funding. It's just too far from population centers (i.e. Boston) and there are too many other good options that are much closer. It's difficult to see that there were skiers in enough numbers willing to make the difficult and SLOW drive to get there.
  • ADKskier said:

    Something tells me the balsams wouldn't have been successful being so remote, but who am I to say. Montreal is not too far off.

    Montreal already has a huge choice of US and Canadian ski areas to choose from that are closer or the same distance as the Balsams. Certainly, there would be the curiosity factor, but I doubt it would be a big draw. You also have to consider the Canadian $ is worth .77USD. That is not helpful for Canadian real estate sales.

  • ADKskier said:

    Something tells me the balsams wouldn't have been successful being so remote, but who am I to say. Montreal is not too far off.

    Montreal already has a huge choice of US and Canadian ski areas to choose from that are closer or the same distance as the Balsams. Certainly, there would be the curiosity factor, but I doubt it would be a big draw. You also have to consider the Canadian $ is worth .77USD. That is not helpful for Canadian real estate sales.

    Good point on the exchange rate.
    ~Rich~
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