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Jay Peak Ski and Golf Resort Vermont PDF Print E-mail
Written by ARC   
Wednesday, 24 March 2010 16:47
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The owner of the Jay Peak Resort is using a little-known federal visa program to finance an ambitious expansion project that's expected to generate hundreds of jobs in the Northeast Kingdom.

Bill Stenger, who purchased the resort last year, persuaded 35 citizens of other countries to put up a total of $17.5 million toward the cost of a 57-suite hotel scheduled to open early next year. The incentive for the investors is the prospect of gaining the right to live and work in the United States indefinitely. Known as the EB-5 program, this initiative also covers the immediate families of those who invest at least $500,000 in a job-creating venture in designated parts of the US with chronically high unemployment.

Britain accounted for 60 percent of those who invested in the initial phase of Jay Peak's expansion. Stenger says the resort has attracted investments from residents of a wide range of countries – including Brazil, China, India, Korea, Mexico and Scandinavia, as well as Canada and Britain – for the next step in Jay's development into a year-round, “weather-proof” resort.

An indoor water park now under construction is due to be completed during the coming ski season, while work has recently begun on an ice arena. Plans also call for the addition of a second hotel with 120 rooms, along with several restaurants, a day spa, and a new clubhouse for golfers and Nordic skiers at a total projected cost of about $110 million.

Stenger says the resort will employ 800 Vermonters year-round when the buildout is completed in 2011. Jay Peak currently has about 600 employees in winter and 125 in summer. A couple of hundred construction workers, all of them from Orleans and Franklin counties, are building the first hotel, the clubhouse and the water park this summer.

Stenger cites estimates that for every job added at the resort, at least one other is created off the mountain. That's very good news for the Northeast Kingdom. It was whacked by the loss of 250 jobs earlier this year when Ethan Allen moved most of its operations from its plant in Beecher Falls to its other location in Orleans.

As an offshoot of his prospecting for EB-5 investors in the resort, Stenger is seeking to lure a South Korean health technology firm to Orleans County. He expresses confidence that the deal will get done soon, adding as many as 200 more jobs to an area that has attracted little recent commercial development.

Jay Peak is already crucial to the economy of surrounding towns.

“The skiers are hugely important to us,” says Joyce Crawford, manager of the nearby Jay Country Store. “Most of our business comes in the winter months.”

Stenger, 60, says he strives to cultivate good relations with the locals. The resort is helping pay for a $13 million joint sewer expansion for the towns of Jay and Troy. And Stenger, unlike some Vermont developers, voices no complaints about Act 250 requirements, saying that the local commission overseeing application of the growth-management law is both “fair and knowledgeable.”

It is able to balance the needs of local residents with preservation of their rural environment, he finds.

The resort's expansion “is only a positive for us,” country store manager Crawford says.

“There's nothing negative that can come out of this. When you turn a ski area into a year-round resort, it's going to make a big difference for a lot of local businesses.”

Stenger adds that local residents “don't want development in their towns, but they do want to see us grow.”

Because there are only inns and no hotels within a 20-mile radius of the resort, Jay Peak currently has “the smallest bed base of any major ski area in Vermont,” Stenger says. It does presently offer about 1,500 on-site beds in an existing hotel soon to be torn down and in condominiums that owners allow the resort to rent out when they're not on the mountain.

Stenger believes the resort will attract many additional visitors to its year-round attractions.

“This summer is a perfect example,” he said during a mid-August tour of the 4,000-acre property. “With all the rain we've been having, there'd be a lot of families wanting to use an indoor water park.”

That facility as well as the ice arena – which will be Orleans County's only indoor skating rink – will also serve as a hedge against climate change. Even though Jay Peak receives the most snow of any Vermont ski area – more than 300 inches a year, on average – weather conditions aren't entirely dependable and may grow more erratic as the Earth warms. It's a consideration that most Vermont ski areas have begun to grapple with.

Jay Peak is within an 8-hour drive of 100 million North Americans, Stenger notes. Canadians currently account for half the visitors to the resort. Stenger points out that it takes about two hours by car to reach Jay from downtown Montreal – roughly the same amount of time as a drive to Mount Tremblant in the Laurentians north of the city.

“The Montreal community thinks of Jay Peak as their ski area,” Stenger observes. And it's been that way for most of the resort's 50-year history. It had been owned from 1978 until last year by a Quebec-based company that operates several ski resorts in Canada. Stenger had served as president and chief operating officer of Jay Peak until he bought the resort, along with three private investors, in a deal that closed a little more than a year ago.

It was skiers from Canada who alerted Stenger a few years ago to the existence of the EB-5 program, which dates back to the first Bush presidency. A similar visa offering for foreign investors had been adopted in Canada years earlier, Stenger says, adding that Britain, Australia and New Zealand have the same sorts of programs as well. Those countries regularly organize exhibits for visa-seekers. Stenger has attended some of the shows with the aim of luring investors to Jay Peak.

He says the EB-5 program appeals primarily to two sets of potential investors: those, especially Canadians, who want to retire in the United States, and younger business people who want to be able to enroll their children in an American university.

Sugarbush has also taken advantage of the visa program. The Warren resort is financing a 40,000-square-foot guest services center as well as three other new buildings with foreign investment made possible by EB-5. Condo-style hotels will also be constructed at Sugarbush with funding from those eligible for visas.

While prospecting for EB-5 investors in South Korea three years ago, Stenger recounts, he met the owner of Bioheart Korea (BHK), a company that manufactures innovative medical devices such as a dialysis machine that's no larger than a briefcase. Bioheart's boss, Alex Choi, wasn't interested in investing in Jay Peak but was much intrigued with the possibility of opening a manufacturing plant in the US, Stenger says. Talks have progressed to the point where Stenger thinks it likely that BHK will build a facility somewhere in Orleans County.

Governor James Douglas is making South Korea the first stop on an investment-inducement tour of Asia that he is scheduled to make in October, Stenger notes. Douglas plans to visit the BHK plant and to make a personal pitch to Choi on behalf of the state.

Last Updated on Thursday, 20 May 2010 17:33
 

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