DOVER—Despite Vermont’s big problems with EB-5, the foreign investment program, has led to major expansions at Mount Snow.
And that trend may continue, even in the wake of recent news that the federal government intends to shut down the state-run EB-5 regional center.
Executives at the Dover resort wouldn’t comment on the state’s latest EB-5 travails.
But Mount Snow administrators in recent weeks have touted their progress on an initial round of EB-5 projects, while also confirming that they’ve requested federal permission to establish a new, independent EB-5 regional center that could handle future projects without state involvement.
“While currently we’re heavily focused on the progress of our new Carinthia Base Lodge and $30 million dollar snowmaking upgrade that’s going to give us the most powerful snowmaking system in the East, these projects set the stage for phase two of our master plan,” said Laurie Newton, development director at Mount Snow.
“This next phase will provide our guests with high-end, ski-in, ski-out lodging and amenities, for which there is currently an unmet demand,” Newton said. “We’re excited to begin the planning process for this next phase.”
Newton issued that optimistic statement prior to an Aug. 21 announcement that U.S. Citizenship and Immigration Services intends to terminate Vermont’s regional center, which manages EB-5 projects in the state.
Notice of termination
EB-5 allows foreigners to obtain visas and permanent U.S. residency by investing in job-creating projects. But federal officials say they’ve lost confidence in Vermont’s regional center due to allegations of massive, years-long EB-5 fraud by the owners of Jay Peak.
The state’s regional center “no longer serves the purpose of promoting economic growth,” federal officials wrote in a notice of termination.
State officials also believe the regional center needs to close, but they want to do it more slowly. Their pitch is to “wind down the [center] over time, continue to oversee existing and pending projects but not take on new projects.”
One of those existing projects is at Mount Snow, where administrators raised $52 million through the EB-5 program for two key improvements — a snowmaking expansion called West Lake, and the 37,000-square-foot Carinthia Lodge.
After an extended delay that caused financial headaches for Mount Snow and its parent company, Missouri-based Peak Resorts, federal officials in December granted the necessary approvals for Mount Snow to access its $52 million.
Since then, work has progressed steadily on the West Lake project, which is expected to be ready for the upcoming ski season. Peak Resorts executives repeatedly have cited West Lake as a financial bright spot for the company’s future operations in Vermont.
“This will have an immediate impact on our snowmaking capacity and our ability to significantly accelerate the opening of our terrain in the early season,” Timothy Boyd, Peak Resorts president and CEO, said during a July earnings report.
In June, Mount Snow broke ground for Carinthia Lodge, which is scheduled for completion next year. The building will include a cafeteria, a restaurant and bar, ski rentals, a retail store, and other services.
Construction schedules for the West Lake and Carinthia projects shouldn’t be affected by the federal crackdown on the state’s EB-5 center. Michael Pieciak, Vermont’s commissioner of financial regulation and an overseer of the state’s EB-5 regional center, confirmed that Mount Snow has access to all of the $52 million raised in its first foreign-investment offering.
Pieciak noted, however, that roughly 100 of the I-526 visa applications submitted by Mount Snow investors haven’t yet been approved.
Unprocessed visas are a primary reason that Vermont officials want to close down the state’s EB-5 center gradually, rather than immediately as proposed by federal officials.
If Citizenship and Immigration Services “followed through with termination as proposed, dozens of investors in Jay Peak and non-Jay Peak projects may be adversely impacted as those investors would no longer be eligible to receive an unconditional visa,” state officials say.
As state and federal officials wrangle over such issues, a key question for Mount Snow is whether the resort will have any future dealings with the EB-5 program.
The second phase of the resort’s master plan calls for 102 new luxury condominium units in five buildings, with Carinthia Lodge as a “focal point” for those residences. The project also includes an “amenities center with a year-round outdoor pool, exercise equipment, sauna and massage rooms,” according to a description prepared by the resort.
The residences, ranging from 1,130 to 2,155 square feet, will feature “ski in, ski out” access allowing Mount Snow patrons to “ski directly to and from their doors,” resort administrators say.
New regional center?
Earlier this year, Dick Deutsch, an executive with both Mount Snow and Peak, announced plans for the company to establish its own EB-5 regional center to pursue large-scale housing development.
Deutsch told investors that such a center would allow Mount Snow to “do our own thing and not have those added expenses and those added time delays” associated with the state’s center. Resort administrators have said they believe the Jay Peak investigation, while unrelated to Mount Snow, hindered their initial EB-5 permitting.
Newton confirmed that the company has submitted an application for a new regional center but could offer no other new information. Citizenship and Immigration Services officials have said they can’t comment on such applications.
Even while acknowledging Mount Snow’s bid for independence and the state’s dwindling role in EB-5 management, Vermont officials might be leaving a door open to working with the resort on one last EB-5 project.
The state’s Aug. 18 EB-5 report makes mention of a company with a “multiphase master plan” that “has applied for designation as a regional center independent of the [state], but is also in discussions with the [state] about affiliating for its next phase, which involves more than 100 ski-in, ski-out condominiums.”
But that section of the document doesn’t mention Mount Snow by name, and Pieciak maintained that the state isn’t interested in processing future EB-5 offerings from the resort.
Given the uncertainties surrounding EB-5 — the program has come under increased national scrutiny and is authorized at the federal level only through Sept. 30 — Mount Snow also might look to other funding sources for its next expansion.
But resort administrators said they couldn’t yet comment on whether the housing project could move forward in the absence of EB-5 money.