Mount Snow, in West Dover, Vermont, announced last week that its $52 million EB-5-funded business plan to upgrade snowmaking and build a new lodge got a federal green light.
The funds will be used to complete the resort’s West Lake snowmaking project, which is expected to increase water storage capacity sixfold, and to build the new Carinthia Ski Lodge, a three-story, 36,000-square-foot building.
“We are pleased that we received the EB-5 project approval and look forward to the funds being released from escrow soon so that we can resume our Mount Snow development projects,” Timothy Boyd, president and chief executive officer of Peak Resorts, Mount Snow’s parent company, said in a statement released Wednesday.
A concrete sign that foreign investor business is carrying on as usual, the announcement came on the heels of news that the federal government filed fraud charges in mid April against the owners of Vermont’s Jay Peak Resort for allegedly misappropriating in a “Ponzi-like fashion” more than $200 million of foreign investments raised through the United States’ EB-5 Immigrant Investor Program.
It was devastating news for those in the Northeast Kingdom who’d trusted Bill Stenger and Ariel Quiros’ optimistic, ambitious vision for economic growth just south of the Canadian border. Across the world, new investors balked. Fundraising “got harder” and “slowed down” after the scandal hit like “multiple bomb shells,” Andy Becker, the developer of Okemo Mountain Resort’s SouthFace Village, told the Burlington Free Press. He still hopes to raise $34 million via EB-5 for Okemo’s vacation home-building project.
EB-5, which Congress created in 1990 and is administered by the United States Citizenship and Immigration Services, helps foreign investors gain U.S. residency in exchange for a minimum $500,000 investment in projects that create or preserve at least 10 permanent full-time jobs in federally designated “targeted employment areas,” which either have high unemployment or are rural.
Since 2007, Vermont businesspeople have raised $563 million through EB-5, creating some 3,000 jobs. And skiers have benefited in particular—Eugene Fullam, director of Vermont’s EB-5 Regional Center, noted that the state has seen a “preponderance” of EB-5s tied to ski resort development. It’s been a vital tool for small ski areas hoping to grow despite unpredictable winters.
“Jay Peak has been a blow to the [EB-5] industry,” Fullam told POWDER. “But not unlike with mortgages and the credit market, you’re going to go through growing pains. Increased regulation is the norm. Jay Peak is a hiccup in the process.”
This EB-5 project has “no connection to Jay Peak,” Mount Snow’s President Dick Deutsch has been careful to emphasize.
“I’m very concerned. I’d be foolish not to be concerned,” he told The Commons last month, wary of poor EB-5 publicity. “But it’s important to know that we are in good standing with the state of Vermont. I think the future of Mount Snow is great.”
For more information on the Jay Peak case, VTDigger has reported extensively on the subject.