Balsams Ends Loan Request

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“The Balsams Resort redevelopment team, through its lead lender Service Credit Union (SCU), has withdrawn its application for a loan guarantee through the New Hampshire Business Finance Authority (NH BFA).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.”


  • 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.
  • 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.

  • Otten ask Coos Legislators to help Balsams Project

    LANCASTER — Balsams Resort developer Les Otten last week asked Coos County legislators to support legislation that would allow the creation of a tax assessment district without the need for a $28 million loan guarantee from the N.H. Business Finance Authority.
    Addressing a joint meeting held Sept. 12 of the Coos County delegation and commission, Otten said he remains committed to redeveloping the Balsams Resort.
    He said the Balsams’ application to the N.H. Business Finance Authority for a $28 million loan guarantee was withdrawn last month by lead lender, Service Credit Union. He said the two sides could not agree on conditions that would be required as part of the guarantee.
    “We’ve run into headwinds with the BFA that were unexpected,” he said, saying only that the conditions put on the loan guarantee did not reflect his team’s understanding of Senate Bill 30 as well as discussions with state economic development leaders back in 2014 and 2015. Otten said there is still another meeting planned with the BFA that will provide one last opportunity to arrive at an agreement.
    If the Balsams and BFA cannot work out their differences, Otten said his team would seek legislation to uncouple the BFA and tax assessment district and allow the Balsams to go forward with creating a tax assessment district. Under the proposal, the county would issue the bond, without a loan guarantee. Otten explained that would allow for a tax assessment loan to be made by a lender. He stressed there would be no financial risk or obligation to the county.
    "This bond issuance is just the mechanism for us to receive a loan relating to the assessment district," he explained.
    Otten explained that the tax assessment district was what really enticed him to go ahead with the project. Establishing a district would allow property taxes on the new development to be used to pay the $28 million bond. He said the ability to create such a district is the foundation to their financing plan.
    Otten noted he has been working on the project for over three years now and the Balsams has now been closed six or seven years. Going to the Legislature to remove the BFA participation would push the project into 2019.
    “Time is killing this project,” he lamented.
    He said the total cost is $178 million and they have identified $130 million in financing including about $25 million in deposits on real estate. There is also about $20 million in developer equity.
    Last year, developers reported that more than 120 families and individuals had made a 5-percent refundable deposit toward a future purchase of a residence in the historic Hampshire and Dix Houses, the first structures to be renovated under the Balsams’ $170 million restoration and expansion plan.
    These pre-sale contracts represent $26.1 million worth of future sales at The Balsams Resort. Deposits were received from future purchasers in 18 states, some as far away as California, Colorado and Texas; and also, Ontario, Canada.
    Delegation Chair Rep. Robert Theberge (R-Berlin) suggested going through the Senate would be easiest since the bill originated in that body.
    State Sen. Jeff Woodburn (D-Whitefield) said he would be happy to start the process in the Senate and proposed both bodies work together.
    "It’s a vital project," he said. "It seems like a simple fix," he said.
    Woodburn noted that Legislature was required for the tax assessment district because Dixville is an unincorporated place. He said if the Balsams Resort was located in a town or city, legislation would not have been required.
    Coos Commissioner Paul Grenier said the commission acts as the board of selectmen for unincorporated places and would oversee the bond. He said it would not increase the workload on the county administration.
    Otten pointed out that once the bond is paid off, property tax revenues go to the county. He said the redevelopment of the Balsams would be an economic engine for the entire region, creating thousands of new jobs and millions of dollars of new investment.
    The Balsams commissioned a workforce study last year that confirmed the resort has the potential to bring thousands of new jobs to the North Country. The study says the Balsams Resort will create 600 construction jobs during Phase 1. Once operational, the Balsams will employ roughly 400 people, with the potential of creating more than 1,500 jobs once the build out is complete.
    As planned, the Balsams’ first phase will include renovating the historic Hampshire and Hale Houses, reconstructing the historic 1866 Dix House and building a new Lake Gloriette House hotel and conference center, Nordic Baths and Spa, and an expanded ski area. Construction in the Balsams village may proceed independently from work on the ski area.
  • Hopefully Jeff Woodburn can kick start this project. You never know...he may even slap it and bite it as well...
  • Dead. It's really too bad, Balsams was a beautiful property once upon a time.
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