powderstud
I'm surprised there has been no discussion of this, but there was an article in The Boston Globe the other day about how Les Otten has reportedly found financing that will get the Balsams project underway. I'm copying in the article below. In the next posting, I'll re-print another article from the Concord Monitor.
Good for Les Otten for having gotten this far when this thing seemed to be dead, but in my opinion, the Balsams is not going to be a successful project at the end of the day. Hopefully I'm wrong on that.
BOSTON GLOBE ARTICLE:
Les Otten lines up new financing for his Balsams resort reboot
Provident Resources Group, a Louisiana nonprofit, will seek to raise up to $125 million for the New Hampshire project through the sale of tax-exempt bonds.
By Larry Edelman Globe Columnist,
Updated December 14, 2021, 2:00 p.m.
Les Otten has spent nearly $19 million and the better part of seven years working to reopen the tumble-down Balsams resort in Dixville Notch, N.H. It’s been a difficult, if not quixotic, quest, even for a man who built a skiing empire earlier in his career.
When my Globe colleague Janelle Nanos checked in with Otten in 2016, he was expecting the Balsams to be back in business the following year. But the obstacles were many, including financing setbacks, a painstaking environmental review, and, more recently, the pandemic.
Now, just as it looked like another lonely winter in North Country, Otten has struck a funding deal that might allow him to start construction on a new hotel and conference center as soon as March. Under that scenario, the resort could welcome skiers for the 2023-2024 season and summer guests in 2024.
The Balsams’ new investor is Provident Resources Group, a Louisiana nonprofit with the mission of arranging low-cost financing for community-based projects.
Provident raises money by setting up special-purpose entities that are qualified to sell bonds exempt from federal and state taxes. These bonds carry lower borrowing costs than bank loans or taxable bonds while still providing attractive yields for investors.
Since 1999, the organization has put together bond sales for more than 20 college dormitory and student housing complexes — including at the University of Massachusetts campuses in Boston and Dartmouth — and for convention centers in the Texas cities of Irving and Harlingen.
On Monday, the Coos County Commission said it supported a deal under which Provident would sell up to $125 million in tax-exempt debt to support the Balsams construction. The nonprofit would be the majority owner of a new 280-room Lake Gloriette House hotel and adjacent 600-seat conference center.
Otten’s Balsams Resort would be a minority owner of the complex and manage it for a fee, while building out the rest of the property on its own. The plan is to turn the property’s original Dix and Hampshire Houses into 99 condo units; renovate the Donald Ross-designed golf course and clubhouse; expand the Balsams Wilderness Ski Area; and build a Nordic baths spa center and a 235-seat performing arts venue.
Provident would be responsible for paying back bond holders with revenue from the Gloriette complex. Coos County, sparsely populated and poor, would have no financial obligation to investors but stands to benefit from an infusion of jobs and tourist dollars.
“There are a lot of advantages to this setup,” said Coos County commissioner Paul Grenier.
The commission would need to approve a final bond agreement, Grenier said, along with the Coos County Delegation, a group of state legislators who represent the area.
(The Provident bond sale would be separate from a planned $30 million offering backed by revenue from a special tax assessment financing district.)
The Balsams project has always been a labor of love and redemption for Otten, who started out in the early 1970s as a management trainee for the company that owned Sunday River. He later bought the Maine property, and through acquisitions created American Skiing Co., which at its peak was the country’s largest ski mountain operator. Burdened by debt, Otten eventually lost control of the company.
With Provident on board, and Goldman Sachs lined up as the proposed underwriter of the bonds, Otten, 72, is more confident than ever the Balsams will make it to the finish line.
“No deal is done until it’s done,” he said in an interview. “But with Goldman Sachs and Provident working on the transaction, that’s proof we’ve got some energy behind us.”
Otten said his friend and former American Skiing colleague Michael Krongel, who later became an investment banker, offered last winter to introduce him to Provident’s chief executive, Steve Hicks.
“He did, and we got on a plane down to Baton Rouge,” Otten said. “In April, they visited the Balsams. In July, the talks got serious.”
Otten said he's more confident than ever the Balsams project will make it to the finish line.
Hicks, who before founding Provident was a lawyer specializing in public finance, said the Balsams project is a good fit for the organization’s efforts to help local governments with economic development initiatives.
“It’s exactly what our mission was designed for,” he said.
If there is a silver lining to all the delays that have plagued the Balsams project, it’s the pandemic-sparked boom in second-home buying and outdoor recreation.
Initially, “COVID knocked the stuffing out of us,” Otten said. “No investor wanted to get near resort communities and hotels.”
Now a getaway in the middle of nowhere doesn’t seem so crazy.
powderstud
Here is the article from the Concord Monitor:
Otten outlines new plan to rebuild Balsams resort
By BARBARA TERTREAULT
The Berlin Sun
Published: 12/10/2021 1:12:54 PM
Modified: 12/10/2021 1:12:28 PM
Balsams developer Les Otten Wednesday unveiled plans to have a national nonprofit organization build the planned new hotel and conference center at the resort. After seven years of effort, Otten said the collaboration will allow the redevelopment of the former grand resort to proceed.
In a presentation to the Coos County Commission, Otten said the plan calls for Provident Resources Group to be the majority owner of the new Lake Gloriette House hotel. When the hotel and center is constructed, the Balsams will oversee its operations as part of its overall redevelopment plan for the resort.
Construction of the new hotel would be financed through tax-exempt bonds which would be sold to institutional investors. Otten said Goldman Sachs has agreed to act as the proposed underwriter for the placement of the tax-exempt bonds. While details of the project are still being worked out, the draft resolution indicated Provident could be seeking up to $115 million in revenue bonds in total on the project.
Under legislation approved in 2019, the Coos County commissioner are authorized to issue the revenue bonds for unincorporated places like Dixville. A tax assessment financing district would be established and the bonds will be repaid through assessments generated by the district. Otten said he would like the commission to approve a resolution supporting the arrangement between his company and Provident as soon as possible.
Officials stressed that the county will not be responsible for any repayment of the bonds.
“To be clear, there is no financial commitment or liability of the county whatsoever. The bonds are not an obligation of the county in any way. They are solely the obligation of the Provident entity involved in the ownership of Lake Gloriette,” stressed Otten.
In fact, once the bonds are paid off, the net-free cash flow will be used for qualified charitable projects in Coos County, boosting economic efforts here.
Provident CEO Steve Hicks explained that Provident’s charter allows it to undertake projects in education, healthcare, and for the benefit of state and local municipalities. As an example, he said his firm helped the city of Irving, Texas finance the Irving Convention Center hotel. Provident will form a limited liability company in New Hampshire and the county can appoint one local person to sit on its board.
Otten said he and his team were introduced to Provident earlier this year and have been quietly working on the collaborative structure for most of the year. He said the parties will be going through a due diligence process over the next several months, with the aim of concluding a transaction sometime in March. He said reappraisals are being done of both the property and real estate. He said the report on the viability of skiing will also be redone, noting the first report called the Balsams ski area one of greatest places left in the Northeast.
Otten said his team is also going to be working for the next 90 days on pre-sales for timeshares in the existing Dix and Hampshire Houses.
Coos Delegation Chair Robert Theberge (R-Berlin) asked the commission if the matter should go before the delegation. Commissioner Paul Grenier said since the delegation is meeting Monday, he felt the commission should present it to the body before voting on the resolution. He said he felt it important to get the delegation up-to-date on the proposal. The commission scheduled a special meeting to vote on the resolution right after Monday’s presentation to the delegation. But the commissioner left no doubt about his support for the resolution.
“I’m 110 percent in support. I can’t wait to get this off the ground,” Grenier said.
Rep. Edith Tucker (D-Randolph) said she was “wildly enthusiastic” to see the latest proposal. Tucker noted that she was the prime sponsor of the bill that allows the county to authorize use of the revenue bonds in unincorporated places like Dixville.
Tucker said she felt the involvement of the nonprofit Provident and the eventual use of money from the revenue bonds for county projects would have pleased the former owners of the Balsams Resort, Neil and Louise Tillotson. A fund set up by the couple makes grants to many educational, economic, recreational, and artistic endeavors in northern New Hampshire.
Otten has been working for seven years to redevelop the Balsams and last year brought out his remaining partner and now owns 100 percent of the project. Otten and his team have put together a $180 million expansion plan that also includes opening and expanding the former Wilderness Ski Area.
Headquartered in Baton Rouge, LA., Hicks said Provident has been in operation for 21 years and has undertaken projects in 21 states. He said they currently have just under $4 billion in assets under management. He said he was “blown away” by the beauty of the Balsams property on a visit there earlier this year.
