I hope these folks still get their residency. Exceptions should be made if necessary. That seems like the easy part. Raising money to finish the incomplete projects, maybe not so easy.
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New England Jay Peak/Burke: It is finally hitting the fan.
- Thread starter Erik Timmerman
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Here's another article, quoting the attorney who's acting as the receiver. He seems to be much less optimistic about their future now than he was a few days ago. Evidently neither Jay, nor Burke have any cash. This article paints a pretty dire picture. I'm not surprised, as the more this unfolds ,it looks to be just a big Ponzi scheme. To a number of my friends in the ski business, this is not a total surprise, in terms of the EB-5 funds being used to cover "all sorts of things." The extent of it is pretty shocking, though.
I'm guessing that once again, as they have in the past, we'll see the board of Burke Mountain Academy buying the assets of Burke Mountain, and dumping the "Q" brand quickly. The hotel, and conference center....who knows?
I bet it's hard to even determine the real fundamentals of the businesses, to determine what a realistic value is. I can only imagine what some of the " accounting records" look like.
Very sad. The again a whole lot of this NEVER made an sense, going way back. Among other things, the Biotech center up there.
http://www.burlingtonfreepress.com/...-could-close-q-burke-may-never-open/83501858/
I'm guessing that once again, as they have in the past, we'll see the board of Burke Mountain Academy buying the assets of Burke Mountain, and dumping the "Q" brand quickly. The hotel, and conference center....who knows?
I bet it's hard to even determine the real fundamentals of the businesses, to determine what a realistic value is. I can only imagine what some of the " accounting records" look like.
Very sad. The again a whole lot of this NEVER made an sense, going way back. Among other things, the Biotech center up there.
http://www.burlingtonfreepress.com/...-could-close-q-burke-may-never-open/83501858/
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How was the biotech center goingbto support it's biotech workers? Everyone was going to move up there because it's so "nice"? My sense is they like more urban but Gore is in Flagstaff and that was practically frontier when they went there.
I suppose if you build it they would come? I really have no idea. The whole thing is sad though. That area around Burke could use an influx of something.
What does all this mean for the Balsalms plan?
I suppose if you build it they would come? I really have no idea. The whole thing is sad though. That area around Burke could use an influx of something.
What does all this mean for the Balsalms plan?
I guess that it was the "if you build it....." thinking. Though, it sounds like the Korean biotech guy that Quiros was involved with has has some questionable results. It never made sense to me. I have two neighbors who are biotech CEO's, in the Boston area. I used to do a lot of business with three or four of the bigger companies in the Cambridge, MA, Kendall Sq. area which is an high hotbed for the industry. When I heard about Stenger's EB-5 plan, and compared the NEK to the Boston biotech, I just couldn't add it up. Among other things, they seem to have an endless supply of very smart, very qualified {and expensive} talent in this hotbeds. Maybe Newport, VT with it's 4600 residents would have worked. Guess we'll never know.
I have no clue if this has any impact on the Balsams. I don't recall anything about Les Otten seeking any EB-5 funding. Is he? One think that LBO can do is sell, and raise money. He gets real passionate about his various "visionary" projects, and he has a knack for developing followers. I think that one makes very, very little sense. I have a lot of friends in Quebec, and they tend to either head to Stowe, maybe Waitsfield/Warren or to the various townships where they and their friends have gone for years. places like St. Agathe. I don't see a big number of people flocking to the Balsams from North of the border. But I'm wrong more often than I'm right. We'll see!
The hot rumor in Maine is that when CNL finally unloads the holdings of their REIT, and Boyne exercises all of their options, etc., Otten will end up buying Sunday River back, and following through on his original plans and development. He lives in Greenwood, about 20 minutes away. Now that would be interesting!!
I have no clue if this has any impact on the Balsams. I don't recall anything about Les Otten seeking any EB-5 funding. Is he? One think that LBO can do is sell, and raise money. He gets real passionate about his various "visionary" projects, and he has a knack for developing followers. I think that one makes very, very little sense. I have a lot of friends in Quebec, and they tend to either head to Stowe, maybe Waitsfield/Warren or to the various townships where they and their friends have gone for years. places like St. Agathe. I don't see a big number of people flocking to the Balsams from North of the border. But I'm wrong more often than I'm right. We'll see!
The hot rumor in Maine is that when CNL finally unloads the holdings of their REIT, and Boyne exercises all of their options, etc., Otten will end up buying Sunday River back, and following through on his original plans and development. He lives in Greenwood, about 20 minutes away. Now that would be interesting!!
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Jay Peak has funds to remain open next season.
Boston Globe, 4/26
Boston Globe, 4/26
https://www.bostonglobe.com/busines...ceiver-said/3kezEAtRyBKuBNADmp9gAJ/story.html
No more Q Burke - the Q has been discarded by the attorney in charge Michael Goldberg
https://twitter.com/WintryMixCast/status/724965330481766400
https://twitter.com/WintryMixCast/status/724965330481766400
Thread Starter
TS
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Hooray!
When they "re-branded" it as Q Burke, I recall having a meeting with a friend who's a long time Burke Mtn Academy benefactor, and his comment was that he really had a bad feeling about things. Felt that there was something "not quite right" with things, and that there was a general feeling of distrust building. He also said that he was pretty surprised at the alliance between Stenger and Quiros Sr. His opinion was that it just seemed strange, and that he didn't think Stenger was as brilliant as he was being given credit for. This guy is pretty savvy about VT, and the NEK.
The ski business is not that complicated. It runs on thin margins. I think that this has opened a lot of eyes to the fact that when things look too good to be true.......that may in fact be the case.
How many fans of various NE ski areas have been wondering why their local resort hasn't built a water park, "just like Jay Peak's." As is it were easy, and the solution. Built the water park, and people will come in HUGE numbers. Hmmm.
I'm glad the receiver has uncovered the $1.6M in Canada. I'm sure they'll find more squirreled away elsewhere. Agree that letting Jay go idle will kill the value. See Saddleback's mess. I would hope that a good consolidator might buy Jay, under this scenario.
My hunch is that BMA's group buys back the ski area operation at Burke, at least for the near future. I hear that they have been quietly discussing all sorts of contingency plan for a year or longer. Uneasy with Q. Without BMA, I really don't know who would be attracted to that operation. Tough one.
This has the makings of a great book, movie, etc. Too bad it's so sad. I find it odd that some writers are describing Newport, VT, population 4600, as a "city", though. The NEK needs a lot of help, and I feel very badly that so many were duped by these guys.
Glad that the Q may be gone from the name. One more step in the right direction.
The ski business is not that complicated. It runs on thin margins. I think that this has opened a lot of eyes to the fact that when things look too good to be true.......that may in fact be the case.
How many fans of various NE ski areas have been wondering why their local resort hasn't built a water park, "just like Jay Peak's." As is it were easy, and the solution. Built the water park, and people will come in HUGE numbers. Hmmm.
I'm glad the receiver has uncovered the $1.6M in Canada. I'm sure they'll find more squirreled away elsewhere. Agree that letting Jay go idle will kill the value. See Saddleback's mess. I would hope that a good consolidator might buy Jay, under this scenario.
My hunch is that BMA's group buys back the ski area operation at Burke, at least for the near future. I hear that they have been quietly discussing all sorts of contingency plan for a year or longer. Uneasy with Q. Without BMA, I really don't know who would be attracted to that operation. Tough one.
This has the makings of a great book, movie, etc. Too bad it's so sad. I find it odd that some writers are describing Newport, VT, population 4600, as a "city", though. The NEK needs a lot of help, and I feel very badly that so many were duped by these guys.
Glad that the Q may be gone from the name. One more step in the right direction.
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You mean Jay's waterpark was a pool of dreams?
Do we know the increase in visits to Jay since the waterpark was built? I must say this season in all it's atrociousness was the first time I thought being at Jay with a water park might not be bad.
So here's the interesting question. These foreign investers put in money that got all these things built. Burke has a hotel and conference center, Jay has all their stuff. Now that it's all imploded, will Burke and Jay be on the hook to pay these people back? Or is it free infrastrucure stolen from investors?
Do we know the increase in visits to Jay since the waterpark was built? I must say this season in all it's atrociousness was the first time I thought being at Jay with a water park might not be bad.
So here's the interesting question. These foreign investers put in money that got all these things built. Burke has a hotel and conference center, Jay has all their stuff. Now that it's all imploded, will Burke and Jay be on the hook to pay these people back? Or is it free infrastrucure stolen from investors?
I've got zero answers, James, but I have the same questions.
Have to assume that the Water Park has increased traffic, but I've been lead to believe that NOT in numbers to support the investment cost. The thing is obviously neat. Friend with young kids think it's a home run. Can't begin to fathom the utility costs.
As far as the fall out on these investment dollars, no clue. I think the investors will be repaid whatever might be left. And it's going to be pennies on the dollar. And yes, the buyers will be buying these assets at deep discount relative to the cost to build, but probably a bit of a discount over their utility as business assets.
If you spend four times the reasonable cost on a hotel, and realize it can't carry itself, the next buyer's due diligence probably shows that it's worth more like 25% of the original cost.
I assume that Jay will be an opportunity for a savvy buyer. I think...... Burke is a challenge, IMO. I don't get a conference center there. At all.
Have to assume that the Water Park has increased traffic, but I've been lead to believe that NOT in numbers to support the investment cost. The thing is obviously neat. Friend with young kids think it's a home run. Can't begin to fathom the utility costs.
As far as the fall out on these investment dollars, no clue. I think the investors will be repaid whatever might be left. And it's going to be pennies on the dollar. And yes, the buyers will be buying these assets at deep discount relative to the cost to build, but probably a bit of a discount over their utility as business assets.
If you spend four times the reasonable cost on a hotel, and realize it can't carry itself, the next buyer's due diligence probably shows that it's worth more like 25% of the original cost.
I assume that Jay will be an opportunity for a savvy buyer. I think...... Burke is a challenge, IMO. I don't get a conference center there. At all.
I remember when Jay was owned by MSSI. Mont St Saveur. We could use Canadian $ at par. They had 2 cash drawers at the register. I agree that Jay won't be hard to unload, but Burke...
Conference centers, water parks, expensive golf courses, etc. all make sense when they are located within an easy drive of a major metropolitan center.* VT doesn't have a major metropolitan center and Montreal isn't within an easy drive. Tech and biotech centers spring up within close proximity of employees and funding, namely near universities, on the west coast (Asian funding and employees), and near metro hospitals and research centers (e.g., a lots of businesses came out of Johns Hopkins). Who was going to work there?
So, what was the exit strategy? These fraudsters knew there was no way the scheme could work. I still don't understand how they thought they could get away with it or who or what was going to bail them out. There is always an exit strategy unless they though of it as a perpetual Ponzi scheme, which this was not.
* This is why Vail Resorts is killing it with PCMR...it is close to SLC and its airport. They now wish there were a much larger conference center at Canyons Village to handle the summer and winter bookings.
So, what was the exit strategy? These fraudsters knew there was no way the scheme could work. I still don't understand how they thought they could get away with it or who or what was going to bail them out. There is always an exit strategy unless they though of it as a perpetual Ponzi scheme, which this was not.
* This is why Vail Resorts is killing it with PCMR...it is close to SLC and its airport. They now wish there were a much larger conference center at Canyons Village to handle the summer and winter bookings.
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^^ Also why Crested Butte languishes while Steamboat does well.
I suppose the exit strategy was these places actually making money. Burke, Jay.
In terms of metro center, everythingbin VT is a drive. Perhaps part of what the thinking is is being north for snow reliability and temps and that becoming more imlortant. Jay has it's own cloud patterns. This year that didn't matter all that much. It was all bad except another 100 some miles north east of Jay.
I suppose the exit strategy was these places actually making money. Burke, Jay.
In terms of metro center, everythingbin VT is a drive. Perhaps part of what the thinking is is being north for snow reliability and temps and that becoming more imlortant. Jay has it's own cloud patterns. This year that didn't matter all that much. It was all bad except another 100 some miles north east of Jay.
Good points. I have a close friend who's very wired in the state of VT. Investment banker, spends a lot of time there, big angel investor, and a very knowledgeable ski guy. Knows everybody in the ski biz, every bank CEO, and pretty much everybody who invests in the ski biz as PE investors, etc. All he's said to me is "What the hell were these guys thinking?" He had felt that it was pretty sleazy form the start, but never dreamt of this scenario. As in, this thing was NOT going to work out right from the start, and the areas might fail. The business fundamentals are NOT there. If it were that easy, people would actually not be running from ski areas like these. Making a buck is hard in the business.
I had another friend, who's in the game, tell me that he and his partners would not "take on" Sugarloaf, my home area, if it were GIVEN to them. Like free. I know he means if they had to actually operate it, as you can sell anything for salvage! But the upside for him is just not there. Huge deferred maintenance, and all of the issues of being a remote place. And it's a much bigger business that Jay and Burke combined.
James' point of Crested Butte is spot on. It's remote, and there are no day trippers. Crested Butte is part of the CNL portfolio. I asked one of these guys if there were ANY CNL properties that he would be interested in. Crested Butte is one, but only if it's at a fire sale price. Doesn't fit the model of the bigger operators. It's no Steamboat, no PC, etc. Spot on.
The more that this unfolds, the bolder these guys appear.....and stupid. My VT friend's comment was that Stenger is a nice guy, great people skills, made people trust him, but that "he's not that bright." Bright enough to pull this caper off, but not smart enough to avoid having it crash.
Sounds like one of the big issues will be what to do about the Visa's for the EB-5 investors who were duped. Particularly for those who invested in projects that will never get off the ground. Might take an act of Congress to make the exception. It sounds like they could care less about losing the $500K. They want the green cards. Shocker.
Also reports that there is at least one buyer interested in Burke. I assume it's somebody closely tied to Burke Mtn. Academy, or the school itself. Wonder if they'd peel off the hotel, etc.?
Waiting for the book, and movie..........
I had another friend, who's in the game, tell me that he and his partners would not "take on" Sugarloaf, my home area, if it were GIVEN to them. Like free. I know he means if they had to actually operate it, as you can sell anything for salvage! But the upside for him is just not there. Huge deferred maintenance, and all of the issues of being a remote place. And it's a much bigger business that Jay and Burke combined.
James' point of Crested Butte is spot on. It's remote, and there are no day trippers. Crested Butte is part of the CNL portfolio. I asked one of these guys if there were ANY CNL properties that he would be interested in. Crested Butte is one, but only if it's at a fire sale price. Doesn't fit the model of the bigger operators. It's no Steamboat, no PC, etc. Spot on.
The more that this unfolds, the bolder these guys appear.....and stupid. My VT friend's comment was that Stenger is a nice guy, great people skills, made people trust him, but that "he's not that bright." Bright enough to pull this caper off, but not smart enough to avoid having it crash.
Sounds like one of the big issues will be what to do about the Visa's for the EB-5 investors who were duped. Particularly for those who invested in projects that will never get off the ground. Might take an act of Congress to make the exception. It sounds like they could care less about losing the $500K. They want the green cards. Shocker.
Also reports that there is at least one buyer interested in Burke. I assume it's somebody closely tied to Burke Mtn. Academy, or the school itself. Wonder if they'd peel off the hotel, etc.?
Waiting for the book, and movie..........
Out here a good 1/3 of all tech startups are Asian-backed or Asian owned to some degree, which is logical given the coast's proximity to Asia. The EB5 program helped to create some jobs, but is it still needed with all the capital (financial and human) available from China, India, Korea, etc.? We are going to hire people from there anyway since there aren't enough skilled domestic workers coming out of our universities. Is the program needed to secure Middle Eastern investment (and paid-for citizenship) now? Our banks are lending and there is enough venture capital to go around. Therefore, the program may have outlived its purpose: http://www.sfchronicle.com/bayarea/...n-to-foreign-investors-under-fire-6603202.php
Back to the thread topic: I guess from reading the comments above that these guys were just stupid. Again, those who perpetrate fraud have an end game even if it means fleeing the country. I find it unbelievable that they thought these projects would be revenue producing to the point of profits, but stupid people do tend to make stupid decisions.
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Well the problem becomes this was supposed to be state overseen. So saying it doesn't matter devalues the state and the country. Not good for business. The program is a law, not some sleazy back room deal.
Imagine Mexico where 43 college students are kidnapped, murdered, disposed of and the government just covers it up.
Imagine Mexico where 43 college students are kidnapped, murdered, disposed of and the government just covers it up.
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