Uh oh...Jay Peak owner pulls a fast one on EB-5 investors

brownman · Post by **brownman** » Apr 5th, '16, 10:02

Most interesting news there is the fact that Donegan has announced she is resigning her regulatory post in June.
That would leave the State without an accomplished and effective person to sort thru these thorny investment issues.
Doesn't bode well for economic progress in the NEK.

SnoBrdr · Post by **SnoBrdr** » Apr 5th, '16, 10:31

freeski wrote:I don't claim to understand what is going on up there, but when the managers took ownership of the hotel (I think) and gave the investors IOUs that stunk to high heaven. It seems there are not a lot of rules with the program and people running the program are taking advantage of this. Even though the State of VT doesn't appear to have the expertise to regulate the program I give them credit for freezing assets until they can straighten things out.

Usally the people investing didn't care as they got a green card (basically) in return.

I guess these two groups of investors only care about their investments,

Can hardly blame them.

Clearly a lack of both State and Federal oversight in this program.

madhatter · Post by **madhatter** » Apr 5th, '16, 12:49

brownman wrote:Most interesting news there is the fact that Donegan has announced she is resigning her regulatory post in June.
That would leave the State without an accomplished and effective person to sort thru these thorny investment issues.
Doesn't bode well for economic progress in the NEK.

for most flatlanders the NEK is further for less, wait til the XC bike scene takes off downstate from there...

chewbacca · Post by **chewbacca** » Apr 5th, '16, 16:39

Show me the money...Bill. C'mon Bill pony up.

What a dog and pony show 'an wher da fook iz mah muney? This show won't end well. FF to the lawyers, guns, and money the shlit has hit the fan.

Post by **Bubba** » Apr 8th, '16, 16:45

This is getting curiouser and curiouser...

http://vtdigger.org/2016/04/08/state-re ... -286323177" onclick="window.open(this.href);return false;

E O Eleven · Post by **E O Eleven** » Apr 8th, '16, 17:08

Mister Moose · Post by **Mister Moose** » Apr 8th, '16, 17:50

There is a thread over on Alpine Zone that is passing 7,300 posts on The Q-Burke debacle with more info if you can stand to read it all.

From what I've seen, the 15% management fee is a new disclosure.

282MM Jay Peak to date
110MM ANC Bio
120MM Burke
512MM

15% of these projects is 76.8 million dollars. Add to that property speculation on the ANC Bio site, management fees for operating the hotels and facilities, and you can see how powerful the incentive is to keep the EB-5 machine going. The owners at Jay Peak have very likely made more than the owners at Killington in the last 5 years.

VT Digger has done a whole series of articles on this. The SEC is investigating, the State of Vermont, which initially exercised very little oversight, has instituted escrow oversight on the Burke Hotel. The Hotel originally slated to open for this season never opened and still has a date uncertain. Liens are getting filed and hotel employees laid off. A controversial equity swap was done on the first Jay Hotel, and the ANC Bio site sits barren on a demolished site in Newport. Financial records requested by VT are still outstanding. Construction contracts were reported to be awarded with no competitive bidding.

All of this is consistent with large amounts of easy money for projects that have little oversight or competition. In the rush to expand as fast as possible, ANC Bio, Q-Burke Hotel, and Q-Burke itself are faltering.

I hope this all works out for Burke. I hope they haven't pulled an Ascutney there and overbuilt for what the market will support at an area that is destined to remain a minor or niche player.

freeski · Post by **freeski** » Apr 8th, '16, 19:13

Q-Rome is burning.

GSKI · Post by **GSKI** » Apr 8th, '16, 19:38

What fools the EB-5 investors are! Obama would have let them in for free is they only came across the Mexican boarder and promised to vote Democrat for free stuff. They should not have been paying us we should have paying them so they could be reliable Democrat voters. Idiots!

Dr. NO · Post by **Dr. NO** » Apr 8th, '16, 19:39

Looks like Q and Jay are following in the footsteps of ASC and our "friend" Less is more Otten.

freeski · Post by **freeski** » Apr 8th, '16, 20:18

So, S & Q pulled a fast one and took ownership of the hotel and issued IOUs to the investors for the original investment. Butt, now if the hotel fails they have screwed themselves because they have to pay off the IOUs and take all of the risk? Or, if the hotel fails they can tell the investors, sorry? Was their plan to only have to pay back the original investment instead of investment plus profits? Edit: Next week on American Greed...

Guy in Shorts · Post by **Guy in Shorts** » Apr 9th, '16, 06:02

New Hotel Jay is very nice. Close to some great beer sources. Hung in the water park with Ozzy last night. Said hello to Bill S as he walked by keeping a eye on his kingdom.

skiadikt · Post by **skiadikt** » Apr 9th, '16, 07:27

Guy in Shorts wrote:New Hotel Jay is very nice. Close to some great beer sources. Hung in the water park with Ozzy last night. Said hello to Bill S as he walked by keeping a eye on his kingdom.

up for the unveiling? so they named a trail in your honor as well. congrats!

brownman · Post by **brownman** » Apr 9th, '16, 08:51

IMHO .. These latest investments were total Ponzi.
As Don Henley points out, ... 'you cross a lawyer with the Godfather ... he'll make you an offer you can't understand..'

Both Jay and Burke are anchored by skiing. Jay would have continued to survive regardless of EB5. The Academy and private funding are mainly what drive Burke. OK, in terms of sport diversity, Kingdom Trails did move the meter somewhat. Burke mountain however, needed to see upgrades. That part of the investment deals was likely feasible... especially coming on the heels of a wildly successful Renaissance of a Jay Peak Resort base area which had been a total mess for years

Tram Haus, Hotel and a water park do not directly translate into success in building and staffing a biotechnology company in an area with workers inclined to plow fields and harvest timber. Technology businesses in the North Country find it quite difficult to recruit the skilled labor force required to run a sustainable operation. IBM in Essex, which has held-on as best they could for decades, always has had that challenge. And that's in the Metro of massive Burlington. Newport is like Appalachia.

Even if the buildout is ever completed, I believe a Big White Elephant is going to take residence up there.

Guy in Shorts · Post by **Guy in Shorts** » Apr 11th, '16, 07:04

Snowing on Jay Peak with the last few days total adding up to enough to open many of the tree runs. It is so nice to be able to make turns without hearing the sound of metal on ice. Staying at Hotel Jay for the weekend with the Mountain Dew Race Crew. Great fireworks, waterpark and powder skiing. Jumped on the first tram Sunday to grab as many powder tree shots that we could find before returning back to Killington. Made it back home in time to close out the Peak Lodge and ride the Canyon Quad for last time this season. Surviving the death ice sheets in the canyon was a far different feel then the way day started.

Grade (Jay) A-

Quote of the Day - With a short commute a Jay/Killington day can be done.