Jay Peak partners pitch $500 million investment in three Northeast Kingdom towns

Bill Stenger announces a $500 million investment in Northeast Kingdom developments. Photo by Anne Galloway

Bill Stenger announces a $500 million investment in Northeast Kingdom developments. VTD Photo/Anne Galloway

NEWPORT–The Northeast Kingdom has long been plagued by unemployment and a depressed local economy. The sparsely populated region has lagged behind the rest of the Green Mountain State for decades economically. Many people still scratch a living from dairy farming or the tourist industry here.

From time to time, the state of Vermont has injected funding for projects in the region. A prison was built in Newport; Pike Industries has a large operation near the border; and a military helmet factory remains in business in Newport. But many other companies, especially wood products industries, have gone by the boards over the years: Ethan Allen Furniture closed in Island Pond; a plywood factory folded in North Troy; and the largest paper mill in the area closed.

So when Bill Stenger, the CEO of Jay Peak Resort, and his partners announced the largest economic revitalization investment of its type in the history of the Northeast Kingdom on Thursday it seemed natural that a TV news reporter would push a microphone in the face of one of the developers and ask: “What’s different this time?”

That’s a question to which Stenger gave a quantitative answer: $500 million, 10,000 jobs, 60 months.

Stenger and his partner Ariel Quiros plan to build seven new businesses as part of an “enterprise” initiative in Newport, Jay and Burke. The partners have purchased five of the properties and have attracted 10 percent of the financing to begin construction.

All seven projects will be built simultaneously Stenger says. Ninety-five percent of the money will come from the EB-5 Visa program, which enables foreign nationals to invest $500,000 in “targeted employments areas” in exchange for a two-year green card. Each investment must result in 10 jobs.

The EB-5 program had been set to expire this year until Congress extended it earlier this month. Sen. Patrick Leahy, D-Vt., a strong backer of the program, was instrumental in extension’s passage and President Barack Obama is expected to sign the bill.

Stenger praised Leahy’s efforts in Congress. “It’s his work that has opened this window,” the ski area mogul said. “If it were not for him, this window would not exist.”

“It’s nice to see a government program that brings jobs here,” Leahy said. “The most important part is it didn’t cost the taxpayers a penny.”

The Stenger and Quiros mega-project is a complex array of industrial, commercial and travel projects, some of which have been in the works for several years. The initiative traverses most of the Northeast Kingdom.

The plan includes:

  • A 75,000-square-foot research tower in Newport for AnC Bio, a South Korean biotechnology firm that will produce stem cells, vaccines and possibly artificial organs. The tower will be located on a 40-acre campus that includes the former Bogner clothing plant, a 90,000-square-foot facility that will begin manufacturing and distributing AnC Bio products in the spring of 2013. Stenger says $50 million has been raised for the project, which will cost a total of $104 million.
  • A high-end window manufacturing plant, will also be located on the 40-acre AnC Bio campus. Menck Window Systems, based in Hamburg, Germany, which designs energy efficient windows will locate an operation in Newport that will employ 140 workers. The estimated cost of the plant is $20 million.
  • A marina and grand hotel on Lake Memphremagog in Newport, located right off I-91 and a walkable distance from downtown, will feature restaurants, retail space and conference facilities. The 150-suite hotel will accommodate 1,200 people and cost $100 million to build. The land, now occupied by a retail strip mall, is owned by Burlington real estate developer and Newport native Tony Pomerleau.
  • The Renaissance Block is a a four-story residential and commercial space near the Orleans County Courthouse in downtown Newport. The new building would take the place of a row of late 19th century offices and shops on Main Street now owned by the Spates family. The cost? $70 million.
  • The Newport Airport expansion will include a 1,000-foot extension of the runway, new hanger space for regional passenger service, a private aviation light plane manufacturing and repair facility, an expanded terminal and a bonded warehouse for free trade zone goods. The expansion will pave the way for small jet (20-seat) service in Newport. The cost of the new construction is $20 million.
  • The Burke Mountain Resort will get a makeover. Stenger and Quiros bought the resort in May. They plan to construct four “rustic” lodges that will house as many as 1,250 people on the mountain. This fall the company will invest $1 million in snowmaking upgrades at the ski area. Total investment: $108 million.
  • Jay Peak Resort will get another dumping of $170 million in cash for the West Bowl ski area which will have 15 trails and three lifts and the Stateside project, which includes an 84-unit hotel, 100 dwellings and a medical center.

The Northeast Kingdom Economic Development Initiative comes on the heels of an initial $250 million Jay Peak Resort expansion that is 75 percent complete and encompasses a new hotel, an indoor water park, condos and extensive upgrades to the ski area. Stenger and Quiros have kept 500 construction workers busy for five years.

All told, the Jay property investment alone will total $420 million. The combined projects will total $750 million.

Has the capital infusion begun to pay off? Stenger says last year was Jay Peak’s “best year ever, and the snow was horrible.” He chalks up their success to the year-round attractions at the resort, which employs 1,000 people.

The projects were planned in anticipation of the extension of the EB-5 program. Stenger said he has hired four architects and six construction companies to handle the simultaneous build out of the projects.

The EB-5 Visa investments are coming from all over the world, Stenger said, but largely from the Asian and South American markets. He is raising about $3 million a month, he said. Though has has about 10 percent raised so far, Stenger says he anticipates attracting all of the money he needs within 12 to 14 months. None of the projects are dependent on taxpayer funding, he said.

“This momentum is so good it is going to catapult us forward,” Stenger said.

State Sen. Vince Illuzzi, R/D-Essex-Orleans, said he found the prospect of the developments “almost overwhelming and a bit scary to have all of this happening essentially at the same time, but it’s a window of opportunity, not only because of EB-5 but because the world economy has all but collapsed.” More investors, he said, are seeking a safe haven in North America.

Anne Galloway

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34 Comments on "Jay Peak partners pitch $500 million investment in three Northeast Kingdom towns"

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Bill Gardyne
3 years 7 months ago

We’ve been waiting for some real economic development in the NEK for many decades and there has been very little. Finally we’re going to have some and in a big way and hurry too. Bill Stenger has put a new meaning to the old VT farmer’s saying, “Make Hay while the sun shines” with his aggressive use of the EB-5 program to fund all this development. Obviously little of it would happen without it. Their plans include both tourist-based and good manufacturing jobs the likes of which the NEK has never seen very many of. It hopefully can reverse the… Read more »

Gaelan Brown
3 years 7 months ago

This looks like a really good plan, a mix of actual productive high-value enterprise and a big injection of tourist-attraction. Nice work Bill!

David Tucker
3 years 7 months ago

It’s lake Memphramagog – not lake Magog.

David Carter
3 years 6 months ago

Magog is a town in Quebec near the north end of the lake that you referenced.

3 years 7 months ago

Editors, Years ago, when GM’s Saturn project was rippling across the American landscape with great promises to change the automaker and make a different kind of car, small futuristic, light, even electronic, a Saturn salesman in Charlotte named Dexter Riffe told me, “I didn’t catch any of that fire.” The fire Dexter means was money in his pocket, a personal pay off for a guy who sold the cars. Who will catch the fire from Bill Stenger’s big boom project in the Northeast Kingdom?. Though not the single biggest investment in America, like Saturn was some thirty years ago, the… Read more »

Bruce Post
3 years 7 months ago

Joe, thank you for an insightful and absolutely wise parsing of this proposal. I wholeheartedly agree that the different parts need to be separated out and judged individually. What I found most disturbing about the cheerleading of our most prominent public officials is that they appeared to be boosting a project prior to any substantive environmental review. Personally, I think Act 250 is a rather weak force, but other than informed public opinion, it appears to be all we’ve got. Stenger and company have prepared quite a package, but you don’t eat a loaf of bread in one gulp. Vermont… Read more »

Suzanna Jones
3 years 7 months ago

When was the last time a group of people from the Northeast Kingdom stood in front of the statehouse demanding to be economically developed? We haven’t. Most of us are satisfied and content with our lives in this lovely land. On paper my family looks “poor” but our lives are rich and fulfilling. Many of us have meaningful work on the land. This is what has made Vermont what it is. But thanks to Shumlin, Leahy, et. al. we are becoming New Jersey. We don’t need the “development” or “jobs” offered by these corporations. We need meaningful livelihoods. This kind… Read more »

Carl Mahoney
3 years 7 months ago

In reply to suzanna jones, the typical Vermonter who wants NO kind of jobs, prosperity, income etc. you’re the type that has kept VT in the dark ages for decades. Meaningful livelihoods?? Yes all the unemployed in Newport or those who barely scrape by working at the ONE poor excuse for a grocery store there. Yes there existence is SO wonderful!!! Why disturb it with a medical center for those who need it? Why bring tourism and hospitality dollars in??? God forbid! Let’s just forage through the forest! That’ll pay our bills and feed our families!! IDIOT!

Randy Koch
3 years 7 months ago

Wow, Carl. Has Vermont really been in the dark ages for decades?

Would those be the decades when places like Quechee, Ludlow, etc ethnically cleansed of Vermonters by hyper-development and the real estate inflation that it brought? When Chittenden County was so heavily suburbanized? When Rutland’s wonderful strips were built? Are these the dark ages you mean?

By the way, is “foraging through the forest” what we used to call “hunting” ?

Carl Mahoney
3 years 7 months ago

Yes Randy I know MY bad. I forgot Vermonters want to live like its 1890. Ride on a horse and buggy 40 miles to get milk from a cow or water from a well. I would want any sort of modern conveniences like a STORE! Oh my god! How dare I! It’s almost 2013 and these nutjobs want to be cut off from civilization. Maybe Vermont should secede. All the quacks who don’t want jobs or business or healthcare can go live like pilgrims on some state land and the rest of us can enjoy the future! See you on… Read more »

Mike Curtis
3 years 7 months ago

Ethnic cleansing isn’t a term that should be tossed out so thoughtlessly.

Vermont has changed a lot — for better or worse — but the change isn’t comparable such an unimaginable crime.

Robert Barlow
3 years 6 months ago

I believe that Vermont is a great state as is, but could also use a little economic help. The lack of big cities and large suburban areas lend themselves well to many people, but that lack can also cause problems for others because of the economic disadvantages. Vermont needs to find a balance between development, and keeping the beauty of the state as is.

Paul Monette
3 years 7 months ago

As Mayor of Newport City I have always looked at the glass as half full and not empty. I am truly amazed at all the negativity from this announcement and believe a lot is being fueled by fear. I am in awe of the dollar amount of the investment and improvements but know it will take place. The development of this area has long been overdue and to answer Suzanna many of us have traveled to Montpelier to remind the folks down there to send economic dollars to our area vs. other areas of the state. Newport has and is… Read more »

Jim Willard
3 years 6 months ago

My family and I left Vermont over twelve years ago. We’re doing quite well now down here in Texas but certainly miss the state, where I was born and raised. What has changed since we left is the ability of Vermont’s elected officials and business leaders to actually work together, to provide a vision and a solid plan behind that vision, to bring opportunity to Vermonters. That ability seems to have drastically improved. And if so, then I do hope the Northeast Kingdom is finally able to capitalize upon the vision that business and government have forged into a working… Read more »

Moshe Braner
3 years 7 months ago

To those who get overly excited by such promises, I offer one word: Husky.

Pete Novick
3 years 7 months ago

If you’re in a bar and you meet someone who doesn’t meet your expectations, what should you do? Lower your expectations. There’s no right answer here. Invite Mr Stenger to come up to the NEK and make his pitch to ordinary working folks. I bet he accepts and I bet you’ll be favorably motivated to support some of these initiatives as a result. What you need to know about this initiative is that much of the rest of the world has become fabulously wealthy in the last 40 years and there is a vast pool of money out there looking… Read more »

3 years 7 months ago

I’m not sure but I do believe this business plan began with the Canadians, in Vancouver.

Few Americans know that the Homestead Act was based on a Russian plan to settle the steppes. At the time, Catherine the Great was reigning.

3 years 6 months ago

Ethinc cleansing is the wrong word. Woodchuck cleansing? To me the term woodchuck is a native Vermonter and a quality to be proud of. How about cultural cleansing? I interviewed David Budbill this year for a profile I am doing on him in my new book A Liftime of Vermont People. He said he gave a reading at the Warren school and was surprised how quiet the children were. She said they were no native Vermonters left; they were all from families who moved in from out of state. Well, a couple of grains of salt but you get the… Read more »

3 years 6 months ago

This post is quick to post, hopefully they killed the first. Ethnic cleansing is apt, but the wrong word. How about Woodchuck (an honorable word for a native Vermont) Cleansing or the politcally correct Cultural Cleansing? I interviewed David Budbill, the poet for my new book A Lifetime of Vermont People. He said he was giving a reading at a school in Warren and was amazed at how quiet the children were. The teacher said, in essence, all the children were from families that moved to Warren from out of state. Years ago the fish biologists in Montana made a… Read more »

Alan Smith
3 years 6 months ago

I’ve been following this story for over a year new, at least as it concerns AnC Bio. There is one important question that I have not seen addressed. When will they start accepting applications for these jobs? Will there be a job fair, postings online, etc.? How will they be announced?

I expect there will be a rush to apply for these positions, and I don’t want to miss the boat. I’m looking forward to moving back home from Boston to the NEK.

Kate Scarlott
3 years 6 months ago

I’m sorry to see so little attention given to the inevitable environmental costs of all these “wonderful” proposals. It is such a dreary refrain to hear Jobs, jobs, jobs as the automatic highest and best outcome of big projects and so little concern over the short and long term costs. And how many permanent, well paying jobs will these projects generate as opposed to temporary and/or low wage jobs, really? What about our dependence on oil and the foreign “terrorists” that we moan and groan about having to buy it from? It takes my breath away that anyone could think… Read more »

Stephen Marshall
3 years 6 months ago

Let’s do the numbers: Each green-card recipient pays 500,000 dollars. To round up 500,000,000 dollars, 1000 rich people from elsewhere in the world need to buy in. What is the effect of this on the communities of Vermont? The Northeast Kingdom becomes a second-home bastion of luxury, where the cost of home ownership shoots up, gobs of land is removed from productivity because the locally evolving farm sector can’t afford the property anymore, local people can’t afford to buy property or homes because it’s too expensive, and the jobs which are available to local people are the low wage jobs… Read more »

3 years 6 months ago

What’s the carbon footprint? Shumlin and Sanders say climate change is our top priority. This proposal will involve lots of cars, planes, and emissions. We care about climate change when it is politically convenient, and not when it isn’t?

Bill Gardyne
3 years 6 months ago

Many folks like to think of the NEK as the last REAL Vermont and feel that nothing needs to change up here as they like it just like it is. It should be a defacto State Park as far as some feel. Well it’s no fun to live in a State Park if you actually have earn money to live and support a family and hopefully prosper and retire without having to go on welfare. Jobs in general and good jobs in particular have ALWAYS been in short supply in the Kingdom; more so than any other part of the… Read more »

Doug Hoffer
3 years 6 months ago

Indeed, it would be great to know if the parties intend to make every effort to train and hire NEK residents for the new jobs.

Bill Gardyne
3 years 6 months ago

I’ve known and watched Bill Stenger for 20 years and he has always gone out of his way to hire locals. He made sure that the lions share of contractors who built Jay the last few years were Vermont-based and MANY of the subs were local guys from the NEK. As far as going forward, I’m sure he feels the same way. Obviously, no one is going to be hired into the research and science-based jobs at ANC-Bio off the street in Newport but I’ve already heard disussion about doing training at the NCU Career Center for their mfg jobs.… Read more »

Nancy McCarthy
3 years 6 months ago

How many green cards will be issued ? I am sure the foreigners who will be coming over to the US will be hired first. Low pay and then they get to stay here for two years or longer. Also the above article states that ANC Bio will also be manufacturing VACCINES. Is this safe for the enviroment? Where will the people who have business’s on the waterfront go?

Jeff Seguin
3 years 6 months ago

As a former Newporter, this is some of the best news for the area I have heard in years. The naysayers have and always will be there. They are the ones that keep the status quo in the Kingdom. That and certain factions that “have theirs and don’t want someone to tread on their private playground”. Newport’s biggest problem was the same as Jay Peak’s prior to Bill Stenger taiking over: attracting people beyond a day trip. You need to become an “end-resort”. Give people a reason to come and stay for a week or two, not just drive through.… Read more »

Larry Johnson
3 years 6 months ago

A couple of years ago when the Vermont Tiger was wild and roaming free, there was a regular contributor to the site by the name of Daniel Foty. During one of his commentaries he promised to contribute an article addressing the EB-5 Program. Daniel, if you’re out there listening, how about adding your voice to this conversation.

Larry

Don Peterson
2 years 8 months ago

EB-5 may prove to be a mixed blessing in this respect: Like the national housing bubble of the past decade, EB-5 is a sugar jolt of capital to the NEK. There is lots of money to be spent, and when that happens, some of it is wasted on bad development. A manufacturing base sounds like a good idea. We should welcome that opportunity since these companies already have a revenue stream and support themselves with existing sales (somebody checked that, right Mr. Stenger?) More hotels and ski lifts and restaurants smells like boomtime overbuilding to me, so not such a… Read more »

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